#Featured: ImpactAlpha Original
Taking stock of the ‘Trump Effect’ on impact investing. The conventional wisdom among impact investors and observers has been that the election of President Trump sparked a wave of investor activism, as purpose-driven investors have sought ways to align their portfolios with their concerns for social justice and the environment.
But in the trenches of capital-raising for impact ventures and funds, the story is less clear, says Michael Whelchel, co-founder of Big Path Capital, which is hosting its 8th Impact Capitalism Summit in Chicago next week. Two days after the election, Whelchel says, the family office of a wealthy Mexican investor pulled a commitment just before a deal was set to close. Separately, the uncertainty over climate policy has made it harder than expected to complete a later-stage energy deal.
Read more on the “Trump effect” by David Bank on ImpactAlpha:
#Dealflow: Follow the Money
BIMA raises $38.4 million for mobile microinsurance in Africa, Asia and Latin America. The four-year-old company now serves 18 million people in 14 countries with plans to reach 750,000 more customers per month with its mobile-delivered life, personal accident and health insurance services. In the past year, BIMA, based in Stockholm, launched in Latin America and expanded services in Asia and Africa, adding nine million customers in Ghana, Tanzania, Senegal, Uganda, Cambodia, Bangladesh, Pakistan, Indonesia, Sri Lanka, the Philippines, Haiti, Papua New Guinea, Honduras and Paraguay. Existing investors — including Leapfrog Investments, Kinnevik AB, and two international telecom companies — joined the Series C round. BIMA expects to turn a profit this year.
ImpactUs signs up first issuers for new impact-investing marketplace. The Washington, D.C.-based online broker-dealer aims to connect accredited institutions, individuals and financial advisors with impact investing opportunities. The firm announced its inaugural lineup of issuers: Iroquois Valley Farms, which acquires and leases sustainable farmland in the U.S.; Shared Interest, which guarantees small-business loans in low-income South African communities; Envest Microfinance, a lender to microfinance institutions in emerging markets; and CommonBond Communities, a nonprofit, affordable-housing developer in the U.S. Midwest. ImpactUs and other recent impact-impacting matchmakers including Enable Impact, Convergence and InvestorFlow aim to reduce the costs and friction in a market that generally lacks transparency. In its launch phase, the ImpactUs Marketplace is invite-only.
Agora Partnerships facilitates variable-payment loans in Nicaragua. Agora, a Latin America social-venture accelerator, is facilitating “variable payment obligations,” or VPOs, that tie repayment to free cash flow. VPOs help small businesses without fixed assets or loan guarantors get much-needed funds. For the Nicaragua effort, Agora, backed by USAID and the Argidius Foundation, has joined forces with a local bank, Banco de America Central (BAC) Nicaragua; Santa Clara University’s Miller Center for Social Entrepreneurship, a VPO pioneer; and Enclude, an international business-advisory firm. The new program aims to provide business-development services and expand access to finance to women-led small businesses. (see, “Test in Nicaragua Shifts Lending for Women-Led Businesses”). BAC-Nicaragua approved more than $150,000 in VPO loans last quarter, including more than $100,000 to women-run enterprises.
Entrepreneurs select Mexican health ventures for VilCap investment.Three-quarters of all deaths in Mexico are tied to non-communicable diseases like heart attacks and stroke. Yet demand for health services far exceeds supply, especially in rural communities. Village Capital partnered with Autodesk Foundation, Linked Foundation and SISNova to run a health-focused business-development program for early-stage startups in Mexico. The 11 participants in the program picked two of their peers to receive a $75,000 investment from VilCap and Pomona Impact. The winners: Huli, a San Jose, Costa Rica-based company whose cloud-based software connects patients with doctors and hospitals; and Metix Medical, based in Glasgow, U.K., which provides clinicians with high-tech devices to improve care.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
Steve Ballmer’s new project aims to bring back facts to policy debates. In an interview, the billionaire former Microsoft CEO said he had been surprised by the findings from his new project: A trove of data to shed light on government spending. “How many people work for government in the United States?” Ballmer asked Sorkin. “Almost 24 million. Would you have guessed that?” Ballmer, who gives to both parties, has spent three years working with economists and professors building USAFacts to catalog revenue and spending across federal, state and local governments. “Most of the not-for-profits we work with would be 50 percent to 90 percent government-funded,” Mr. Ballmer told Sorkin, referring to his philanthropic efforts. “I didn’t realize all these not-for-profits were in a sense almost like government contractors.” USAFacts allows citizens, policymakers and others to query questions such as, How much revenue do airports take in and spend? And, What percentage of overall tax revenue is paid by corporations? Said Ballmer, “I would like citizens to be able to use this to form intelligent opinions.”
How to bridge Kenya’s housing gap. Kenya has a housing deficit of over two million units, and more than six in 10 urban Kenyans live in slums. Its Vision 2030 Strategy calls for 200,000 new units per year, quadruple the current rate. Filling Kenya’s gap for affordable housing could spur the “housing multiplier effect”: economic growth, job creation, and a deepening of Kenya’s financial sector. The World Bank’s suggestions: Community savings and credit cooperatives, or SACCOs, in which community members are both investors and loan recipients. Mortgage refinancing companies and guarantees to link long-term investors like pension funds with housing opportunities. Improved access to land, basic infrastructure, and paperwork such as mortgage registration and title transfers. Policy reforms are needed to create an environment conducive to mobilizing long-term domestic capital.
Seven of every 10 new cars could be hybrid or electric by 2030. Follow the money, right? When it comes to the future of transportation, follow the car-parts maker. A year ago, Schaeffler, a German auto-parts maker, still expected a majority of new cars would be made with internal combustion engines in 2030. Now, CEO Klaus Rosenfeld expects 70 percent of new cars to be (at least partially) electric. What changed? Recent announcements that Daimler, VW and BMW are accelerating investments in electric cars. Schaeffler plans to hire 1200 engineers to develop parts for electric cars.
The electric cars are arriving sooner that expected meme is taking hold. A report from Carbon Tracker projects electric vehicles could capture one-third of the transport market by 2035 (oil giant BP’s forecast for that year: six percent). A separate report from the Boston Consulting Group says that by 2030, a quarter of miles driven in the US could be in electric cars (that are shared and self-driving, to boot). “The technology exists and our research shows that many consumers will embrace it,” said Brian Collie, who leads BCG’s automotive practice in North America. “Such an evolution in mobility is no longer a fantasy.”
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