Blockchain/AI/IoT | October 14, 2017

SOCAP’s best-dressed, fighting blindness, entrepreneurship for all, blockchain exuberance

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Greetings, ImpactAlpha readers!

#Featured: ImpactAlpha Original

How 17 of the best-dressed people at SOCAP would invest $1 million for impact. Who are the bees and who are the flowers? It was hard to tell at the 10th annual Social Capital Markets conference in San Francisco this week. But SOCAP’s best-dressed were out to pollinate innovative approaches to urgent challenges.

With photographer Kelly Pendergrast, ImpactAlpha’s Maura Dilley sought out some who stood out. After complimenting their powers of attraction, she asked each one: “How would you invest one million dollars for impact?”

Take a look at “17 of the best-dressed people at SOCAP” and see how they’d invest $1 million for impact, by Maura Dilley with Kelly Pendergrast, on ImpactAlpha:

How 17 of the best-dressed people at SOCAP would invest $1 million for impact

#ICYMI: Brief Highlights

The GIIN’s Amit Bouri looks ahead as ‘impact investing’ turns 10. Among the big new things introduced in the year 2007 were the iPhone and Airbnb. Amit Bouri, CEO of the Global Impact Investing Network, is hoping that in time the year will also mark the beginning of a movement that will transform global finance: impact investing. (Read more)

Present at the Creation: Amit Bouri looking ahead as `impact investing’ turns 10 (podcast)

The impact investment strategies that made these funds among the ‘Best for the World.’ This year’s list of “Best for the World” funds from B Lab includes many familiar names, such as Leapfrog Investments, Village Capital, Deutsche Bank and Vox Capital. Here are five others with distinct impact strategies that helped them stand out. (Read more)

The impact investment strategies that helped make these funds among the ‘Best for the World’

Six storylines ImpactAlpha is watching for the decade ahead. 1. Women lead (you already know that) 2. Impact is the key to global growth. 3. Exclusion is a bug. Impact is fixing it. 4. Tipping points are nigh. 5. Impact is tech’s next big thing. 6. The people want impact. (Read more)

Six impact storylines ImpactAlpha is watching for the decade ahead

An ‘impact rating’ for a publicly traded mutual fund. Just as third-party ratings are essential for judging the financial risk of an investment, third-party verification of impact is essential if impact is to become a core component of investment decision-making. Aeris’ “4-sun” impact-management rating for Community Capital Management’s $2 billion CRA-Qualified Investment Fund may prove a model for rating public mutual funds, which manage $16 trillion in assets. (Read more)

First-ever ‘impact rating’ issued for a publicly traded mutual fund

#Dealflow: Follow the Money

OPIC commits $2 million to fighting blindness in Cameroon. Blindness afflicts nearly 40 million people worldwide, with more than half of the cases caused by cataracts. The condition can be corrected through surgery, but the West African country has only three ophthalmologists for 115,000 people who need treatment. The investment from OPIC, the U.S. development-finance institution, will help the Magrabi ICO Cameroon Eye Institute, which was founded by Africa Eye Foundation, finance cataract surgery for up to 18,000 low-income Cameroonians over five years. The eye-care provider will also partner with the University of Yaoundé to train and certify new eye-care specialists. Repayment of the “development impact bond” will come from the Conrad N. Hilton Foundation, Fred Hollows Foundation and Sightsavers. Contributions for the Cameroon Cataract Development Impact Loan came from the Netri Foundation.

ADAP Capital closes deals — quickly — with Neopenda and Good Nature Agro. ADAP, an early-stage impact investor, heard pitches and conducted due diligence on eight startups over the course of the SOCAP conference. Andy Lower announced ADAP closed two deals: Neopenda, which develops low-cost products to boost newborn health, and Good Nature Agro, which provides agricultural services and financing for low-income farmers in Zambia. Each will receive $75,000 in the form of a convertible note and a year of legal services from Westaway law firm. The speedy vetting was a demonstration that investors can accelerate the investment process for impact startups, “and increase the flow of capital to nascent social enterprises,” says Dan Luscher, ADAP’s managing director. To derisk the investments, ADAP’s advisory arm will work with the businesses over the next 18 months.

Qualified and Upswing win Village Capital education challenge. The startup competition focused on addressing skills and hiring gaps in the U.S. Qualified, based in San Francisco, has an online tool companies can use to evaluate job candidates’ technical proficiency. Upswing, based in Austin, Texas, helps higher-education institutions retain students and improve support services, particularly for “non-traditional” students. Twelve startups participated in Village Capital’s education challenge this year, and the peer-selected winners each receive a $75,000 investment.

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#Signals: Ahead of the Curve

Entrepreneurship isn’t just for big cities. Entrepreneurship for All in Boston runs programs in English and Spanish in four small cities in Massachusetts. Nearly three-quarters of the businesses it has supported are women-run, 52% are immigrant-run, and 57% minority-run. So far, 83% still operate and have created 430 jobs. Now, the accelerator, launched in 2010, is seeking to expand to 50 small and mid-sized cities that have fallen into decline and suffer related high rates of poverty and unemployment. Entrepreneurship for All has secured $6 million in commitments from Constant Contact’s former CEO Gail Goodman and Commonwealth Capital’s founder Michael Fitzgerald. The Kauffman Foundation, Draper Richards Kaplan Foundation and Deshpande Foundation also contributed. Entrepreneurship for All’s EforAll Summit is set for Nov. 3 in Waltham, Mass.

#2030: Long-Termism

Will blockchain change the way we invest for impact? Distributed-ledger technology is generating exuberance. The question is whether it’s irrational. By some forecasts, 10 percent of the entire global GDP could be stored via blockchain by 2027. The market capitalization of all cryptocurrencies, such as bitcoin, has risen from $7 billion in January of 2016 to over $130 billion as of September 2017. ICOs (initial coin offerings) now provide more startup fundingthan venture capital for blockchain-based companies. Nearly $2.3 billion has been raised to date in ICOs, with the large majority of that taking place in the first half of 2017. Beware the dangers of “over-exuberance,” said Shane Ninai of Day One Investments at this week’s SOCAP conference in San Francisco, citing general confusion around the technology, as well as the potential for fraud.

Despite these caveats, the excitement was palpable. “We need more cars, not faster horses,” said Ninai. “We believe that blockchain technology will best be used in completely new business models that will surface in maybe three or four years from now. For example, you can make money from the unbanked now.” There are use-cases for each of the U.N. Sustainable Development Goals, according to Kavita Gupta, the head of the new $50 million venture fund from blockchain startup Consensys.

At SOCAP, some of the blockchain examples were so far-flung, they could’ve been lifted off a bottle of Dr. Bronner’s Soap. Secure voting. Land use rights. Tracing the provenance of organic goods. Identity verification. ICOs could level the playing field for startups around the world. “Access to finance is a big problem in emerging markets, and ICOs democratize access,” said Ninai. “With blockchain, all you need is a good business plan and access to the internet to raise funding.”

That’s a wrap. Have a great weekend! Please send news and comments to [email protected].