Greetings, Agents of Impact!
Featured: Returns on Investment podcast
Institutional Shift: Climate risk hits the market and other impact investing trends to watch in 2019 (podcast). This is the year impact investing gets real. Really. That’s the thread connecting a half-dozen or so forecasts from Equilibrium Capital’s Dave Chen, who returned to ImpactAlpha’s Returns on Investment podcast for a New Year’s check-in on the progress of the “institutional shift” in impact investing. At the top of the list: Climate concerns are showing up in insurance risk premiums and even in terms for loans. “We’re seeing the operationalization of climate risk,” inside corporations as well as investment portfolios, even if the tallies of investment capital don’t yet capture all of the effects, Chen says. Among his other forecasts: Expect a raft of billion-dollar ‘sustainable infrastructure’ funds from major players like Ares, Blackstone and Harrison Street. Green bonds are in, coal plants are out. Workforce housing is becoming a core institutional asset. And finally, “This is the year we’ll get beyond, ‘If there were only metrics, we would deploy capital,'” Chen says. In other words: No more excuses.
Read on and listen in to, “Climate risk hits the market and other impact investing trends to watch in 2019 (podcast),” on ImpactAlpha.
- Catch up on the “Institutional Shift” series and all of ImpactAlpha’s Returns on Investment podcasts. Subscribe on iTunes, SoundCloud, Stitcher or wherever you get your podcasts.
Dealflow: Follow the Money
Pay-as-you-earn coding school Lambda raises $30 million for international expansion. Lambda School is among a growing number of institutions testing “income share agreements” to close education opportunity and employment gaps (see yesterday’s coverage of African Leadership University’s latest equity round). The coding school has raised a fresh equity round to expand its pay-as-you-earn coding school in Europe and Canada. The California-based institution, which has enrolled more than 700 students, says 83% of graduates have landed a job within six months. The latest financing was led by Bedrock Capital; Lambda raised a $14 million equity round in October. Dig in.
- Go deeper: Income-share funds expand college finance options for low-income students.
FloWater raises $15 million to reduce single-use bottled water. The world produces a million single-use plastic bottles per minute. That contributes to a waste crisis that is choking ocean ecosystems. Burlingame, Calif.-based FloWater offers an environmentally-friendly alternative to single-use plastic water bottles with water-bottle filling stations for schools, gyms, hotels and offices. Swedish water purification company Bluewater led the three-year-old company’s $15 million funding round. It joins a host of companies that have scored investor support to fight plastic waste. Learn more.
YES Bank accelerates 14 agtech and cleantech startups in India. The ventures were selected for the bank’s first startup accelerator program outside of financial services. YES Bank, one of the largest private banks in India, launched its YES SCALE program last June to support startups in sectors crucial to India’s economic future, including smart cities, clean tech, agtech, life sciences and ed tech (the bank’s fintech accelerator program launched in 2017). Finalists for the clean tech and agtech tracks include a maker of low-cost cattle feed from recycled food waste and the developer of a robotic solar panel cleaner. Here’s more.
Impact Voices: Pass the Mic
These investors are fixing finance to better serve Black entrepreneurs. Financial organizations around the country are democratizing investment decision-making, rethinking credit underwriting and directing capital to fill long-standing gaps as they drop legacy investing practices that have excluded people of color. In a guest post on ImpactAlpha, Chordata Capital’s Tiffany Brown and RSF Social Finance’s Lynne Hoey explore racial equity investment strategies that are reducing investment risk and surfacing overlooked opportunities…and creating a new financial system that benefits all communities.
- The Boston Ujima Project is asking neighborhood residents to help select local businesses to receive investments. RSF Social Finance set aside credit scores in favor of meetings with company’s stakeholders, including customers, suppliers, employees and shareholders. Chordata Capital is helping wealthy families design and implement portfolios with an explicit commitment to racial and economic justice, with investments that include reparations loan funds in the the southern U.S. The Runway Project is working to fill the “friends and family” capital gap by providing low-interest, no-collateral loans and other support to Black entrepreneurs in Oakland, Calif.
Read, “These investors are fixing finance to better serve Black entrepreneurs,” by Tiffany Brown and Lynne Hoey on ImpactAlpha.
- Join Boston Ujima Project’s Lucas Turner-Owens (along with ImpactAlpha’s David Bank and others) at the New England Impact Investing Initiative’s “Mobilizing the Boston Impact Investing Community,” this Thursday, Jan. 10, from 6-8pm.
Agents of Impact: Follow the Talent
Yusuf Shaikh joins South African impact investing fund Secha Capital as a principal… Drashta Ventures is looking for a managing partner in London… Elevar Equity is recruiting an investment professional in Mexico City or Bogotá… Virginia Community Capital is hiring a community investments analyst in Richmond… Accion is recruiting a summer associate for its global investments team in Washington D.C…. The Entrepreneurs Impact Summit, June 13-14 in Santa Monica, Calif., is asking participants for new, specific and measurable commitments to social impact… Third Sector Capital Partners, SVT Group, and Social Value U.S. are hosting an impact management skills training in Boston Jan. 30.
Editor’s note: Acumen is spinning off Lean Data. The firm expects to complete the process this quarter. Yesterday’s Brief incorrectly suggested the spinoff was complete.
— January 9, 2019.