The Brief | January 24, 2019

Rise Fund’s impact-measurement spinoff, development impact bond for refugees, Andela’s African talent play, energy efficiency tech

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Featured: ImpactAlpha Original

Y Analytics: The Rise Fund’s new impact measurement business gets a mixed welcome. How to measure the social impact of investments has long been a hot topic among impact investing pioneers. A big, brash newcomer just raised the stakes. TPG Growth, which is raising $3.5 billion for its second Rise Fund following its $2 billion first fund, is spinning out its impact measurement arm as “Y Analytics,” a separate business that will serve other investors as well. “To persuade the biggest institutional investors to commit their funds to tackling some of the world’s most urgent challenges we need to be as confident about the impact returns as we are about the financial returns,” U2 frontman Bono, a Rise Fund co-founder, said in helping launch the new company at the World Economic Forum’s annual meeting in Davos, Switzerland.

Most of the industry publicly welcomed the heightened attention to impact measurement at a time when the entrance of mainstream private equity players has fueled concerns about marketing hype and “impact-washing.” But some among impact investing’s old guard are grumbling that the Rise Fund has staked out an approach independent of emerging industry norms. They suggest the Rise Fund’s “impact multiple of money” calculation is ripe for manipulation and grouse that the method may cherry-pick positive outcomes without accounting for negative consequences. The most salient critique may be that, at least for now, TPG Growth is measuring the social impact only of the impact investments it makes through the Rise Fund, not of its entire $13.2 billion in assets, nor parent TPG’s more than $70 billion. And the debate rolls on.

Read, “The Rise Fund’s new impact measurement business gets a mixed welcome,” by David Bank and Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

IKEA Foundation backs development impact bond for refugees. The philanthropic arm of the Swedish furniture company is committing €6.8 million ($7.7 million) to provide vocational skills training to Syrian refugees in Lebanon and Jordan. More than 1.6 million refugees live in the two countries, making up 7% and 16% of their populations respectively. The three-year “development impact bond” aims to help up to 12,000 refugees, primarily women, start home-based businesses. Impact advisory firm Kois is seeking total commitments of at least $20 million. Dive in.

Andela rakes in $100 million to staff out Africa’s technical talent. Andela started in 2014 to train and hire African coders to fill global companies’ technical skills gaps. Founder Jeremy Johnson used to speak of the African technical staffing company’s mission to reverse “age-old misconceptions about talent and potential.” His message now is about the distributed future of work because of the “severe shortage of engineering talent.” From campuses in Africa, Andela’s team of 1,100 developers and software engineers work for global companies like Viacom. The company has raised more than $180 million, including $100 million in a Series D funding round led by Al Gore’s Generation Investment Management. Here’s more.

Phase Change Energy secures funding for energy efficiency tech. North Carolina-based Phase Change makes materials to help buildings store and release heat more efficiently, reducing energy consumption. Pegasus Capital Advisors and Third Prime Capital committed an undisclosed amount of capital to the company’s mission to “advance clean and sustainable thermal technologies throughout the business ecosystem.” Read on.

Agents of Impact: Follow the Talent

Banker Ken Marks joins the Coalition for Green Capital’s board of directors… Anastasia Tarpeh-Ellis is the new managing director of Backstage Los Angeles… Computer History Museum’s Dan’l Lewin is the new board chairman Silicon Valley Community Foundation. Joining the foundation’s board: George Brown, formerly a partner with Gibson Dunn & Crutcher, Hewlett Foundation’s Larry Kramer and Opportunity Fund’s Luz Urrutia… Nature Conservancy seeks a director of product development for debt conversions in Africa and the Indian Ocean.

January 24, 2019.