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#ImpactAlpha Focus: 2030 Finance
Introducing 2030 Finance, where ImpactAlpha tracks the global shift of capital. Looking back from 2030, it may be clear that a titanic shift already was underway by 2017. One by one, in clusters, and finally en masse, pension and sovereign-wealth funds, insurance companies and big banks, wealthy families and even retail investors tilted their $300 trillion in private assets toward a better future. The rotation of global capital, slowly at first and then in a rush, toward a shared agenda for sustainable, inclusive, prosperity will seem, if not inevitable, a historic response to powerful trends.
As ImpactAlpha has tracked #Dealflow and #Signals, we’ve watched impact investors, entrepreneurs and intermediaries of all sorts position themselves around the Sustainable Development Goals and the Paris climate accord. Both agreements, ratified by nearly every nation, set major milestones around the year 2030. If that deadline is met, billions, then trillions and finally tens of trillions of dollars will have re-made energy systems, health care, education, financial services and more, for billions of people. The scale of the shift will have transformed not only global development, but the capital markets themselves.
To provide a roadmap for that future, we’re introducing 2030 Finance. This focused theme of ImpactAlpha also has its own standalone site (at 2030Finance.com). There, you’ll meet the leaders and the do-ers who are turning funding gaps into investment opportunities. You will get an early look at innovative financial structures and new products as they make the leap from promising pilot to scaled success. You’ll find pointers to blended finance blueprints, country roadmaps and funding pipelines. You’ll meet the new crop of billion-dollar fund managers that are driving deals of growing ticket sizes and growing impact. And you’ll meet each other, as partners and practitioners come together at gatherings, briefings, online forums and special events.
Our tag line for 2030 Finance is “Investors meet the global goals.” That’s meant to be descriptive, as more investors find the Sustainable Development Goals and the global climate agreement to be powerful drivers of opportunities and solutions. It’s also predictive, and a preview of the headline we hope to write in a large font about a dozen years from now: Investors Meet the Global Goals.
To keep up with 2030 Finance, be sure to bookmark 2030Finance.com and subscribe to The Brief, ImpactAlpha’s daily newsletter. You can also get the 2030 Finance RSS feed for your favorite reader. Check out 2030 Finance now.
#Dealflow: Follow the Money
Aspiration raises $47 million for “conscious banking.” Most banks profit from overdraft, ATM and other fees, or from financial products ill-suited to their customers. Los Angeles-based Aspiration lets customers themselves choose how much to pay in fees. It also provides them with a “sustainability” score on their spending choices. “If we can start driving people to [put] ethics at the core of their daily spending decisions, you can totally transform [companies’] incentives,” says founder Andrei Cherny. Investors in Aspiration’s Series B round include Allen & Company, Omidyar Network, Capricorn Investments, actor Orlando Bloom, L.A. Clippers coach “Doc” Rivers and former Citigroup COO Deborah Hopkins.
New German impact fund backs Lok Capital. Munich-based Sonanz Management invests in impact funds that aim to meet the needs of people living on less than $10 per day. “This large unmet demand is best served by local entrepreneurs who understand their markets and the specific needs of their customers,” the company says. A new fund of funds that has raised $10 million so far will invest in four to six impact funds. In its first investment, Sonanz is contributing an undisclosed amount to impact-investment firm Lok’s third fund, which has a target of $100 million. Lok has invested in healthcare, agriculture, and financial services, including affordable-housing finance company Ummeed Housing; the firm has raised $90 million and committed at least a third of the capital. Sonanz is backed by Swedish pension fund SEB Stiftelsen, H&M Foundation and German and Swedish private investors.
South Korea’s SK Group introduces social enterprise fund. South Korea lags behind global and regional peers in raising and allocating impact capital. But several initiatives are bubbling. The large conglomerate SK Group’s new 13 billion won ($12 million) private equity fund aims to back homegrown social enterprises. Chairman Chey Tae-won envisions 100,000 social enterprises across the country accounting for about 3% of GDP, up from about 1,700 registered social enterprises in South Korea that now account for 0.25% of GDP. SK has raised 5 billion won from the group’s philanthropic arm and KEB Hana Bank. Other Korean impact funds include a $63 million fund created by Lee Hun Jai, a former deputy prime minister and finance minister; Wonyoung Kim’s Crevisse; and the Root Impact project from Kyungsun Chung, a member of the Hyundai Group family (listen to the Returns on Investment podcastinterview).
#Signals: Ahead of the Curve
Five cleantech sectors that Bill Gates (and other Breakthrough investors) have their eye on. Breakthrough Energy Ventures, the $1 billion cleantech fund backed by Bill Gates, Jeff Bezos, Vinod Khosla, Jack Ma and other big name investors, has identified five promising and underfunded priority areasfor investment. Blogging from Paris at the One Planet Summit, Gates writes the fund has brought on investors, company builders, scientists, and technologists. Breakthrough will invest in grid-scale storage to make renewables more practical and affordable (see, “Energy storage takes shape with financing for Southern California battery installations”). Mini-grids will be a priority, to deliver electricity in remote areas without needing to connect to a centralized grid (see, “Mini-grid developers get ready for debt capital to scale up access to clean energy”). Gates says BEV will invest in carbon-neutral alternative building materials to green home and office construction (see, “Cities race to build plyscrapers to save forests and carbon”). BEV will also look to tap geothermal power, the energy stored up as heat under the Earth’s sources, to drive turbines and back companies developing liquid fuels from sunlight to power airplanes, trucks and other big energy users.
Read all of ImpactAlpha’s coverage from the One Planet summit at 2030 Finance.
Onward! Please send news and comments to TheBrief@impactalpha.com