Greetings, ImpactAlpha readers!
#Featured: Impact Voices
If matching investors and impact ventures online is such a good idea, why have so many efforts failed? The recent shuttering of ImpactUS is just the latest in a string of flops among online marketplaces for impact investments. ImpactUs, which offered investments in about a dozen ventures and community development finance institutions, had raised millions from the likes of the MacArthur, Ford and Kellogg foundations and Open Road Alliance, among others. Back in 2009, Mission Markets with its focus on an environmental deal pipeline, a massive arena in its own right, raised and spent approximately $4 million before closing its doors. Enable Impact was launched as a matchmaking site to connect impact entrepreneurs with investors looking for deals, before pivoting to a fee-based investment service. Unable to fund enough deals to build a sustainable business, it closed up shop last fall.
In a guest post on ImpactAlpha, Sphaera’s Astrid Scholz, along with Audrey Selian and Jeff Tuller, argues that the failure of such efforts did not come about because they were too early to market or lacked the money to put more effort into sales and marketing. Rather, they say, it was because any go-it-alone platform is likely to fail in gathering enough deals and investors. “If we can combine our deal and investor pipelines, we increase the value all of us provide to our customers. If we increase the flow of data, we can measure and aggregate impact in ways that gets us to the desired outcomes in whatever sector or geography more quickly.” (Disclosure: ImpactAlpha’s ImpactSpace database last year partnered with Sphaera and Conveners.org to build such a collaborative tool to help startup entrepreneurs more quickly find accelerator programs suited to their needs).
Read “Requiem for a dream…of an online impact investing platform,” by Astrid Scholz, Audrey Selian and Jeff Tuller, on ImpactAlpha.
#Dealflow: Follow the Money
Omnivore raises $46 million in second fund for Indian agriculture. The venture fund invests in early-stage Indian agriculture and food startups with the goal of boosting the profitability and sustainability of smallholder farmers. The fund also seeks to reduce uncertainty for India’s more than 100 million small farmers by building markets that more efficiently buy and sell to them, Omnivore’s co-founder Mark Kahn, tells ImpactAlpha. Omnivore’s $39 million first fund, raised exclusively from domestic Indian investors, backed 12 companies including horticulture machinery developer MITRA, which last month attracted a strategic investment from India’s largest tractor manufacturer. The new fund is backed by KfW, the German development bank, the Dutch Good Growth Fund, the Rockefeller and Sorenson Impact foundations, Ceniarth, a US family office, Indian commercial bank RBL Bank and SIDBI, an Indian state-backed fund of funds that was an investor in Omnivore’s first fund. Omnivore expects to announce the first two investments from the new fund in March and complete fundraising by August.
Omidyar Network backs Indian self-publishing platform Pratilipi. Ninety percent of India’s 1.2 billion people read, write and speak only their native language, but the overwhelming majority of online content available to them is in English. Pratilipi allows users to self-publish books, essays and stories in eight Indian languages. More than 150,000 items have been published on the site by 22,000 users. “We started Pratilipi with the vision that language should not be a barrier for people to share their stories with each other,” founder Ranjeet Pratap Singh says. Omidyar led Pratilipi’s $4.3 million Series A round, in which Nexus Venture Partners, Contrarian Capital, Times Internet, Shunwei Capital and WEH Ventures also participated. The investment fits in with a spate of civic tech and new media investments Omidyar has recently made, including programs like the Latin American Alliance for Civic Technology, theSouth African Media Innovation Program and individual grants and investments to The Bristol Cable and International Consortium of Investigative Journalists.
New Zealand’s first domestic impact fund reaches first close. The Impact Enterprise Fund, a partnership between Ākina Foundation, New Ground Capital and Impact Ventures, has raised NZ$8 million ($5.8 million) to invest in local startups tackling issues in sustainable food production, agriculture, healthcare, clean energy, housing and education. The Impact Enterprise Fundclaims to be the first domestically-focused impact fund in New Zealand. It is looking to raise an additional NZ$2 million to NZ$7 million in capital and invest in eight to 15 enterprises across a range of sectors.
#Series: The New Revivalists:
Ben Hecht and Ellen Ward: Closing the racial wealth gap with early capital and innovative finance. Living Cities, better known for its work on affordable housing, is doubling down on entrepreneurs of color. Why? New small businesses create most new jobs in America, but most of those jobs have been created by white-owned businesses. As the U.S. population mix changes, more investment is needed to ensure that the entrepreneurial mix keeps pace. “If we’re going to get more jobs, it has to come from people of color,” CEO Ben Hecht and Ellen Ward, Living Cities’ chief of staff told ImpactAlpha’s Jessica Pothering. To help entrepreneurs of color access capital, grow revenues and create good jobs, Living Cities is pioneering initiatives like the BuildNOLA Mobilization Fund for entrepreneurs of color in New Orleans. Read, “Ben Hecht and Ellen Ward: Closing the racial wealth gap with early capital and innovative finance,” by Jessica Pothering on ImpactAlpha.
New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.
#Signals: Ahead of the Curve
Investor Readiness: How asset owners can prepare for effective impact investing. It’s not just enterprises that have to get ready for impact investments. Investors need to prepare as well. In a guest post on ImpactAlpha, Tideline’s Christina Leijonhufvud and Fran Seegull of the U.S. Impact Investing Alliance lay out steps that investors can take to get the help they need. Starting with “clarity and transparency on what they don’t know,” and proceeding to “sharing learnings, tools and frameworks,” the pair argue that investors in the end must “embrace the messiness of the market and work creatively with advisors to jointly tackle gaps and explore new solutions.” The article is the second in a series of posts on the development of an effective ecosystem of “intermediaries” in impact investing. The first, “Road work ahead,” was published on ImpactAlpha last June.
Read “Investor Readiness: How asset owners can prepare for effective impact investing,” by Christina Leijonhufvud and Fran Seegull on ImpactAlpha.
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