Dealflow: Follow the Money
Enterprise’s first opportunity fund targets Main Street entrepreneurship in U.S. Southeast. ImpactAlpha yesterday outlined the small-business opportunity in opportunity zones, the low-income census tracts that qualify for hefty capital-gains tax breaks under last year’s tax bill. Now comes word that Enterprise Community Partners is joining forces with Rivermont Capital and Beekman Advisors to launch an “opportunity fund” focused on local business development and entrepreneurship (ImpactAlpha reported on Beekman’s exploration in July). The Rivermont Enterprise Emergent Communities Fund (or simply, the Emergent Fund), targeted at $250 million, will invest in “Main Streets” in small towns and rural areas in the Southeast, starting in North Carolina and Virginia. Here’s what we know.
- Extra! Extra! The U.S. Impact Investing Alliance is urging the Treasury Department to collect basic data and metrics about opportunity funds and zones. ImpactAlpha got an early look at the Alliance’s letter to Treasury Secretary Steven Mnuchin.
- Data flows. In a guest post on ImpactAlpha, the Alliance’s Fran Seegull argues the Treasury Department should collect impact-oriented data on jobs created, people lifted out of poverty and new business starts. “Data shows us where capital is flowing and how that capital is being used; it tells us a story about where there are structural barriers and where there are opportunities,” Seegull writes. Read, “Why impact data and transparency are keys to the success of opportunity zones,” by Fran Seegull on ImpactAlpha.
Vinted raises €50 million by catering to waste-conscious fashion consumers. The Lithuania-based online retailer started in 2008 for people to sell their used clothes. Now, Vinted has raised one of the largest funding rounds ever for a Lithuanian startup to leverage “super trends of people wanting not to waste and being careful of how they pressure the environment.” Sprints Capital, Burda Media, FJ Labs, and Insight Venture Partners led the round. Check it out.
Tizeti secures $3 million to bring solar-powered Wifi to Ghana. The Nigerian Y Combinator graduate and Facebook partner builds solar-powered WiFi towers. Tizeti provides high-speed internet access to 150,000 users via 7,000 WiFi hotspots in Nigeria. The company’s $3 million Series A round will finance the company’s expansion plans to Ghana. The round was led by venture capital firm 4DX Ventures. Here’s more.
Featured Event: GSG Impact Summit Oct. 8-9
Driving to the Tipping Point 2020. We are on the cusp of an impact revolution. How do we leverage the opportunities it is creating for our markets, our economies, and our shared future? Sir Ronald Cohen and former U.S. Vice President Al Gore will headline the fourth annual convening of the Global Steering Group for Impact Investment. ImpactAlpha is proud to be a media partner for the event in New Delhi, Oct. 8-9. More than 900 impact leaders from 50 countries are gathering under the banner, “Driving to the Tipping Point 2020.” Register here. (Social entrepreneurs and NGO staff get a discount; write to GSGconcierge@gsgii.org.)
Signals: Ahead of the Curve
A growing market for definitions of the impact investor. The World Bank announced that it will announce “13 principles of impact investing” at next month’s IMF-World Bank meeting in Indonesia. The International Finance Corp., the bank’s development finance arm, has “created a definition of impact investing to try to stop organizations wrongly using the strategy’s popularity for gain,” reports The Financial Times. The five categories: strategy, structure, portfolio management, exiting investments and verifying achievements.
- The Global Impact Investing Network has also announced (in the What’s Next serieson ImpactAlpha) that it is developing a set of principles to “clarify, simplify, and normalize behaviors in the impact investing industry,” according to the GIIN’s Amit Bouri. The GIIN plans to release the principles at its October forum in Paris.
- Combating impact-washing. The multiplying efforts signal growing concerns about “impact washing” as big banks and legacy investment firms roll out green-finance commitments, impact fund announcements and strategies wrapped in acronyms like ESG (for environmental, social and governance) and SDG (for the Sustainable Development Goals). Many impact investors still skew towards larger, safer and higher-yield investments.
- Elite charade? Anand Giridharada’s new book, “Winners Take All,” skewers elite “changemakers,” including impact investors. But is too many people claiming to want to change the world the real problem? Read, “Big winners want to be changemakers? Hold them to it,” by ImpactAlpha’s David Bank.
Any “principles” need to be broad enough to encourage wide participation, says Australian superannuation fund Christian Super’s Tim McGready, yet “targeted enough to ensure that impact investors are actually demonstrating real, tangible, positive impact that justifies the use of the term.” Share this post.
Agents of Impact: Follow the Talent
Shailesh Rao, who ran international operations at Twitter, is the new head of TPG Growth and The Rise Fund for India and Southeast Asia… Roy Steiner, previously with Omidyar Network and the Gates Foundation, is the new managing director for food at Rockefeller Foundation… You can still register for today’s webinar about the New York City Inclusive Creative Economy Fund, from LISC and Upstart Co-Lab.
— September 6, 2018.