Greetings, ImpactAlpha readers!
Putting impact investments on the map. Jean Case issued a “clarion call” to impact investors and entrepreneurs to #ShareYourData about financing, returns and impact. “It is your early activity and data — made transparent — that will propel the drive to the mainstream,” she writes in the Stanford Social Innovation Review. The CEO of the Case Foundation calls for a behavioral shift across the nascent industry, “one that disrupts current behavior around a lack of disclosure, limited transparency, and underdeveloped standardization.”
The vehicle for this data-sharing is the Impact Investing Network Map, the Case Foundation’s visualization of publicly available transactions between investors and companies. Who are the industry investors and companies? How are they defining their impact? What sectors, regions or markets have been most robust? What is the stage of investments? Full disclosure: ImpactAlpha’s ImpactSpace database is the Case Foundation’s primary data partner for populating the map.
#Dealflow: Follow the Money
Bloomberg launches “American Cities Initiative” to galvanize local leadership. The $200 million philanthropic initiative launched at the annual U.S. Conference of Mayors follows city and state backlash against the Trump Administration’s decision to withdraw from the Paris climate agreement. The move is a response to “impotence” and “dysfunction” in Washington, D.C., said former New York mayor Michael Bloomberg. “Cities have begun to play a vital role in determining our nation’s reputation as a global superpower.” New Orleans’ Mayor Mitch Landrieu called on cities to lead national policy “by the accumulation of our individual efforts.” More than 300 cities have pledged to uphold Paris agreement commitments. The new initiative will cultivate city leadership; advance policies on education, climate change, and the opioid addiction crisis; and citizen empowerment. Half the grants from Bloomberg Philanthropies will go toward leadership development in city halls.
European startups share $7.2 million for product development. Europe’s “Horizon 2020” program has allocated the funds to 128 projects in transport, information technology, climate change, and clean energy. Not all are social-impact focused, but those that are include: mobile healthcare for the critically ill; vegan leather; a European web browser for the E.U.’s strict privacy and security policies; and several senior-care/independent living projects, as well as bike projects for smart cities. Each project receives a €50,000 ($56,000) feasibility grant, along with business strategy support. Viable — and marketable — ideas can apply for follow-on funding. Horizon 2020 is an €80 billion initiative launched by the European Commission in 2014 to make Europe competitive with science, research, and tech innovation. It has invested €20 billion in 11,000 projects, including €7.4 billion in 3,000 projects tackling social challenges.
Elemental Software raises £300,000 to link healthcare and community resources. The U.K. company takes a “more than medicine” approach to health. It launched last year with a solution to refer high-risk chronic disease patients to community health providers and social care professionals. Most chronic diseases, like obesity, diabetes and heart disease, are closely linked to lifestyles. Combatting them is putting a growing strain on government and local resources and healthcare systems globally; for example, the U.K.’s National Health Service spends 7 of every 10 pounds on the treatment of chronic diseases. Elemental Software is being used in a 28,000-person wellness trial in Northern Ireland, a maternal care pilot, and for diabetes risk management in Dubai. Impact investing bank ClearlySo helped Elemental raised the funds from undisclosed investors.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
Strategic investments can unlock digital financial services in India and Africa. Safaricom’s M-Pesa has allowed 30 million people in East Africa to make digital payments; India’s fintech behemoth Paytm serves 177 million. Both companies are exceptions, according to a new report from Village Capital, which runs accelerator programs in both regions. Most digital finance services companies in East Africa and India fail to raise funding and struggle to reach even 1,000 people. That leaves 60 million potential customers in East Africa and more than 200 million in India without access to formal financial services. Why? Investors in these markets rely on networks to avoid high-cost due diligence, the report found. That means they fall back on a few familiar consumer technology companies. That’s “bad for investors, who miss out on high-potential companies that need more time, cash, and support to grow,” says Village Capital’s Ross Baird. To boost access to capital and mitigate risks, Village Capital says foundations, in particular, can back deal syndicates with first-loss guarantees, subsidize capital for strategic human capital hires, and develop a first-loss guarantee fund to catalyze local debt.
Distributed renewables lower the cost of rural electrification in Hawaii. Hawaii’s goals are to run on 100% renewable energy by 2045 — and provide affordable energy for everyone. The costs of electrifying rural areas, where significant infrastructure is needed to reach relatively few people, has traditionally been subsidized by the federal government. To increase access and lower costs, Hawaii, is turning to wind and solar power. “Rural areas are rich with renewable resources,” said Kyle Datta, a general partner at the Ulupono Initiative, an impact investing firm, at last week’s VERGE Hawaii conference co-hosted by State of Hawaii and GreenBiz Group.
In rural areas with dispersed populations, like sub-Saharan Africa and parts of the U.S., renewables already are more economic than “legacy” energy sources. Ulupono has put $30 million into renewable energy tech startups, backing projects in seawater for cooling, biofuels and waste-to-energy. On the Big Island, Hawaii Electric Light Company gets 50% of its electricity from renewables and is on its way to 100% as early as 2030. In Hawaii, Kaua’i Island Utility Cooperative, a member-owned utility, is constructing wind and solar farms and investing in members’ renewable projects. Because the Kaua’i Island Utility Cooperative is owned by paying members, “We can afford to have a longer time decision framework,” says CEO David Bissel, “We strongly believe that the large-scale, lowest cost renewables can be brought on in a community-based system.”
Onward! Please send any news and comments to TheBrief@impactalpha.com.