Navajo entrepreneurship, Ontario startups, new ImpactAssets 50, restoration investment landscape



Greetings, ImpactAlpha readers!

#Featured: New Revivalists

Heather Fleming: Bringing global social innovation home to the Navajo Nation. Economic development on tribal lands has long meant mostly casinos and coals mines. Heather Fleming, founder of Change Labs, want to change that to social entrepreneurship and the digital economy. A native of Tuba City, population 8,611 and the largest city on the Navajo Nation, Fleming studied design at Stanford before founding Catapult Design, which helps design products for underserved communities worldwide. With Change Labs, she’s bringing global social innovation back to the reservation.

Entrepreneurship, she says, can turn a wealth of need into much needed wealth-generating opportunities. Unemployment rates on the reservation can reach 60%; basic infrastructure barely exists, let alone internet and mobile penetration. But dig deeper, says Fleming, and you’ll find informal entrepreneurs trading crafts and jewelry, making and selling food and hawking firewood. “They’re all entrepreneurs, they just don’t see themselves that way,” Fleming told ImpactAlpha’s Jessica Pothering.

With Change Labs, she’s using pop-up labs, co-working spaces and access to global networks to nurture social entrepreneurship on tribal lands. “There’s no one working on recycling, clean water, electricity access,” she said. “Is there a great idea out there for how to bring electricity the 20% of the population that’s completely disconnected from the grid?”

Read, “Heather Fleming: Bringing global social innovation to the Navajo Nation,” by Jessica Pothering,” ImpactAlpha.

New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.

#Dealflow: Follow the Money

VERGE Breakthrough Fund raises $1.7 million for Ontario startups. The seven-year fund is looking to raise $2 million in total to provide loans to social enterprises and affordable housing initiatives. It aims to achieve a 3% return. “This is a demonstration fund. It’s meant to see if this concept has legs,” says VERGE founder Lina Bowden. The new fund is a partnership between Toronto-based SVX and VERGE Capital, the social-finance arm of Pillar Nonprofit Network.The $1.7 million was committed by Libro Credit Union, London Community Foundation and two religious organizations. Ontario’s Ministry for Economic Development and Growth contributed $375,000 as first-loss capital.

Apollo Hospitals launches health tech seed fund. Apollo Hospitals, a private Indian hospital chain, is investing $5 million in a seed fund for health and medical tech startups. The company will serve as an accelerator for the startups and plans to contribute $5 million more in capital, with the goal of raising $50 million to $100 million in total. Health tech is one of the fastest growing startup segments in India, with new companies raising $333 million in capital last year, according to Inc24. Low cost and affordable healthcare is a growing need in India. Existing resources are stretched by high instances of non-communicable diseases; meanwhile, access to affordable, quality healthcare is limited for rural and poor Indians. In addition to seeding the fund, Apollo is in talks with IBM to offer expertise on an artificial intelligence component of the program.

Backstage Capital backs Native American-run biotech firm Novoron.Novoron Bioscience was founded by neuroscientist Travis Stiles to developtherapies for central nervous system disorders like multiple sclerosis. The company has been working with a National Institute of Health grant to develop a spinal cord nerve regeneration therapy. Backstage Capital announced on Twitter that it had invested an undisclosed amount in the company. Backstage raised its second fund last year to invest in women and minority entrepreneurs, whose stake of total venture capital funding is in the low single digits.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to thebrief@impactalpha.com.

#Signals: Ahead of the Curve

Pin the tail on the billion-dollar impact funds. When ImpactAssets started collecting its first list of impact investment fund managers seven years ago, it wasn’t clear there were 50 impact firms that could meet its criteria. Now, the nonprofit financial services provider needs a new category for the biggest funds on its annual ImpactAssets 50 list. Of the managers in the 2017–2018 IA50, nearly half are managing assets of $250 million or more, the largest designation. A half-dozen of the impact funds have more than $1 billion under management. The seven new funds this year are Green Canopy, Capital Impact Partners, Goodwell Investments, The Nature Conservancy, NorthSky Capital, SDS Group and Kairos Investment Management. In all, the 50 funds on this year’s list manage $29.3 billion in assets, more than double the total of last year’s firms. More than 60% have been operating for over a decade and nearly half have investment teams with at least 50% women or other under-represented groups. Jed Emerson, who chaired ImpactAssets’ review committee, says the vetted list provides financial advisors and clients “a starting place to make informed investment decisions.” Tiedemann Wealth Management’s Stephanie Cohn Rupp says the resource is especially valuable for “family offices and accredited investors getting started in the impact space.” To be included, funds must demonstrate “significant commitment to social impact and track clear measures of social and/or environmental impact.” Tip o’ the hat to the first reader to name the six billion-dollar funds.

#2030 Finance: Long-Termism

The investment landscape for land restoration.More than three dozen governments around the world have committed to restoring more than 150 million hectares of land by 2020. That’s an area bigger than South Africa. By 2030, that commitment rises to 350 million hectares. The U.S. restoration economy in 2015 notched $9.5 billion in economic output and generated another $15 billion indirectly, while employing 126,000 (59% more than coal mining). Political urgency on climate action, emerging tech and new business models are converging to unlock business opportunities in restoring forests and agricultural lands.

Hundreds of businesses and investors are jumping on this opportunity, according to a new report from Nature Conservancy and World Resources Institute. More than a third of agricultural landscapes are considered degraded. Forests are losing a net 3.3 million hectares (an area the size of Taiwan) every year. Reversing these trends, according to an October reportfrom Nature Conservancy and World Resources Institute, can deliver more than one-third of the emission reductions necessary to keep global warming under two degrees Celsius, the goal of the Paris climate accord (see, “Forests grow as a climate solution.”)

Companies like Dutch firm Life Company, whose patented product enables trees to grow in dry and degraded land, are using technology to lower the costs and boost efficiency of restoration. Consumer-facing firms like Guayakí, in Sebastopol, CA, which sells drinks made with restored Atlantic rainforest-grown yerba mate, are sourcing materials from restorative activities. Project developers like Chicago-based Fresh Coast Capital, which won Morgan Stanley’s Sustainable Investing Challenge in 2014, are designing and managing restoration projects for clients. Project managers like New Forests, which manages sustainable timber plantations and other conservation investments, are managing and harvesting trees on degraded land. “At this critical time when stock and bond markets are at rich valuations and investors are looking for the next growth opportunity,” write WRI researchers, “the world’s oldest and most efficient carbon capture technology is waiting: trees.”

Thank you for reading. Onward! Please send news and comments to TheBrief@impactalpha.com

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