Greetings, Agents of Impact!
Last chance. You can still join hundreds of other Agents of Impact for today’s Call No. 7, ‘Optimizing impact with data-driven management.’ We’ll push the discussion beyond measurement toward that promised land where research and data are used to drive operational impact. Register now and hop on The Call at 9 am PT / noon ET / 5 pm GMT TODAY.
Gathering Agents of Impact in Mérida, Mexico. Are you going to the Latin America Impact Investing Forum? ImpactAlpha is gathering Agents of Impact alongside the FLII on the evening of Wednesday Feb. 20. Seeking an invitation? Let us know and we’ll follow up with details.
Featured: ImpactAlpha Original
Media Development Investment Fund raises $13 million for journalism in markets hostile to the press. “Democracy dies in darkness,” the Washington Post’s Super Bowl ad warned. Independent media shines a light, especially in emerging markets where a free press is under pressure. High-quality journalism in such markets, where rising middle classes are demanding reliable news, can also be an attractive investment. That’s the thesis of a new private equity fund from Media Development Investment Fund, a long-time manager of independent media funds.
- Trust is an undervalued asset. “In all of these markets, the competitive advantage of the companies we’re working with is trust,” MDIF’s Harlan Mandel told ImpactAlpha. Reliable news businesses in politically risky and economically distorted environments, he says, are undervalued by investors. MDIF has raised a nearly $13 million Emerging Media Opportunity Fund I to back digital news and information outfits in Latin America, Asia and sub-Saharan Africa where the free press faces continuing threats and restrictive business conditions. It has invested $5 million in five media ventures in Indonesia, India, Brazil and Peru.
- Funding mix. Dutch foundation DOEN anchored the fund with $5 million. The Soros Economic Development Fund added $5 million, including $1 million in first-loss capital. Denmark’s Investment Fund for Developing Countries and Danish media company JP Politiken Hus also are limited partners. MDIF also contributed capital.
- Impact carry. MDIF has structured the new fund to tie the impact performance of investees to its compensation as the fund’s manager. The investment firm’s share of the profits, known as carried interest, or carry, is contingent on meeting a range of impact metrics. “It’s a good way to separate the ones that mean it from the ones that don’t,” Transform Finance’s Andrea Armeni told ImpactAlpha.
Read, “Media Development Investment Fund raises $13 million for journalism in markets hostile to the press,” by Dennis Price on ImpactAlpha.
Dealflow: Follow the Money
Orange’s venture fund backs financial inclusion startup Aire. U.K.-based Aire is among a crop of fintech startups trying to expand access to banking and credit through new methods of risk assessment. The venture investing arm of mobile network Orange invested in Aire’s $11 million Series B round. Mobile network operators are backing startups as they expand mobile-enabled services and diversify their own business lines. Kenya’s telecom operator Safaricom started the trend nearly 12 years ago with the M-Pesa mobile money service now used by 32 million people. The venture funds of Safaricom and Orange are expanding into mobile finance and other services like energy access. Dive in.
- Recall: “SoftBank, Salesforce and Orange signal corporate venture capital’s tilt towards impact investing”
Rise Fund and Elevar co-invest in positive news platform The Better India. The social-impact content platform launched in 2008 to report on positive news and social impact initiatives across India. The content, posted in three languages, features coverage of local people fighting corruption, female athletes and electrification of off-grid villages. TPG’s Rise Fund and Elevar Equity backed the company’s Series A funding to support its push into e-commerce to broaden its revenue streams. The Rise Fund and Elevar jointly invested through their co-investment partnership. Read on.
Microsoft Philanthropies kicks TechSoup’s public public offering campaign into gear. The tech giant’s philanthropic arm invested $1 million in non-profit tech marketplace TechSoup through the SVX.US impact investing platform. Toronto-based SVX launched in the U.S. in November with TechSoup’s direct public offering for $11.5 million in debt. Microsoft Philanthropies’ commitment brings TechSoup’s take so far to $1.1 million. SVX.US aims to democratize impact investing by allowing investments as small as $50. Find out more.
Signals: Ahead of the Curve
Pushing for community engagement and impact reporting in Opportunity Zone investing. Investors don’t need to wait for federal rules to commit to community engagement and honest appraisal of the social and environmental impact of their investments in low-income Opportunity Zones. A new reporting framework from the U.S. Impact Investing Alliance and the Beeck Center at Georgetown University stresses key principles, including engagement with low-income and underinvested communities, equitable community benefits, and transparency and measurement around impact objectives and outcomes. Executive director Fran Seegull said that as the Alliance presses for federal standards on reporting, “this voluntary framework will help model a higher standard of practice.”
- Catalyzing impact. The framework was launched at Sorenson Impact Center’s Winter Innovation Summit now underway in Salt Lake City. The Center’s new “Opportunity Zones Catalyst Challenge” will use the framework to highlight cities and states, as well as fund managers and investors, that are using the tax-advantaged investments to drive social and environmental impact. “There are skeptics that feel this is a tax break for the rich, that it’s real estate developers just coming in to do investments that are subsidized by the tax break,” Jim Sorenson told ImpactAlpha. “We really want to counter that.”
- Share this post.
Agents of Impact: Follow the Talent
The Beeck Center at Georgetown University is looking for a finance and administrative manager in Washington, D.C…. The World Benchmarking Alliance is recruiting a research lead to develop a gender equality and empowerment benchmark… The Open Society Foundations is requesting proposals from fund managers investing in women in Africa’s informal economy… Access Ventures’ “Reconstruct Challenge,” a $3 million prize competition to address the U.S. affordable housing shortage, is open for applications… Aspen Network of Development Entrepreneurs is hosting “Metrics from the Ground Up,” Feb. 18-19, in Merida, Mexico.
— February 7, 2019.