Greetings, Agents of Impact!
Signals: Ahead of the Curve
How 10x tech can drive 10x impact in 10 years. The start of a global recession in the middle of a pandemic that has laid bare structural inequality and racism may not be the most auspicious time to revive the tech-utopian vision. Or maybe it is. “We are on the cusp of the fastest, deepest, most consequential transformation of human civilization in history,” begins “Rethinking Humanity,” the new report from the think tank RethinkX, which has tracked the disruption of transportation, food and other sectors. The synthesis: a shift from a centralized, extraction-based system of fossil fuels, livestock and concrete to a distributed, creation-based system built on photons, electrons, molecules and qubits. Think lab-grown food, solar energy and autonomous electric vehicles. Driving the change: 10x technological advancements that are pushing the cost of basic needs as low as $250/month by 2030, using one-tenth the natural resources with a 10x, or even 100x, reduction in waste. That could make access to food, energy, transportation, information and shelter a fundamental human right, say coauthors James Arbib and Tony Seba. Out: scarcity, inequity and predatory competition. In: plenitude, shared prosperity and collaboration.
If the technological building blocks are already here, the new social, economic and cultural “Organizing System” to manage the transition is not, the authors write, offering a 2020-2030 Action Plan. The first steps, they say, is to recognize the non-linear nature of the changes and the existential choice at hand: cling to out-moded systems and face societal collapse, or create new systems of organization that usher in a new age of freedom. “Dark ages do not occur for lack of sunshine,” the authors write, “but for lack of leadership.”
- Closer than you think. Mainstream models underestimate the speed and scale of change. Seba’s predictions for the rapidly declining costs of solar power and lithium ion batteries, for example, seemed aggressive a decade ago, but have largely come to pass. Pension funds are ripe to be tapped for infrastructure-style financing for solar, battery and food production systems (see, “Green infrastructure is back on the agenda”). New mechanisms, such as clean-energy REITS, could enable individuals to invest in projects in their own communities.
- Bumpy transition. COVID is just a warm up. Shocks throughout the 2020s will lead to destabilization and unrest, sparking extremist and populist reactions. Cascading disruptions will see the collapse of whole segments of the oil sector, hitting credit markets, the U.S. dollar’s global primacy and interest rates, along with jobs and livelihoods (see, “Write-downs of stranded fossil fuel assets are here – and getting bigger”).
- Distributed ownership. The ownership structure of the networks and means of production will determine whether the future is “benevolent or dystopian.” Out: corporations and monopolies. In: transparent, collaborative, open-source systems (see, “Democratizing business financing and ownership to build community wealth”).
- Dive in.
LeBron James signals opportunity for ‘empowerment’ media with $100 million raise. The NBA megastar and his long-time friend and business partner Maverick Carter raised $100 million for SpringHill Co., “a maker and distributor of all kinds of content that will give a voice to creators and consumers who’ve been pandered to, ignored, or underserved,” according to Bloomberg. SpringHill, named after James’ childhood apartment complex, combines the marketing agency Robot Co., SpringHill Entertainment and Uninterrupted LLC, the production company behind James’ HBO talk show. Carter calls SpringHill “part Disney storytelling power, part Nike coolness, and part Patagonia social impact.” The company, he said, “is about point of view, the community you serve, and empowerment.” Investors include Guggenheim Partners, UC Investments, Elisabeth Murdoch’s content company Sister, and SC Holdings.
- Trending. SpringHill is riding the rise of streaming platforms and the growing appetite for diverse, authentic and impactful stories that connect with audiences – and help those audiences connect with each other (see, “Investing in the impact of powerful new voices in film and video games”). Demand for content about racial justice has spiked since the George Floyd protests got underway. SpringHill’s 105 employees are 64% people of color and 40% female.
- Creative capital. Also demonstrating the investability of media offering new voices and narratives is Charles King’s $150 million raise for Macro’s slate of films that lift up voices and perspectives of people of color. Los Angeles-based media company Blavity raised nearly $10 million for its mix of political, business and social justice news and events for a young Black audience. Upstart Co-Lab, which last week launched an investor coalition for the creative economy, identified more than two-dozen funds, with a total of $25 billion, that are backing social impact media.
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Dealflow: Follow the Money
Gates Foundation backs Enko Chem’s eco-pesticides for Africa. Massachusetts-based Enko Chem uses technology for pharmaceutical drug discovery to develop new crop treatments. The company, which was incubated within agtech venture capital firm Anterra Capital, is combatting the pest resistance and environmental harm of chemical pesticides. The Gates Foundation led the company’s $45 million Series B round; the foundation’s investment aims to ensure that new crop products make it to low-income, smallholder farmers worldwide.
- Mode of action. Enko looks for under-developed methods of killing pests or boosting crop resilience and rapid-tests their commercial viability. The Series B funding enables the company to exit stealth mode and launch field testing and regulatory trials.
- Parallel tracks. “Typically tech access in emerging markets and for smallholder farmers is sequential, separated by about 10 years from commercial markets,” Enko’s Jacqueline Heard told ImpactAlpha. “But emerging market economies are so reliant on agriculture. There’s a win-win if we simultaneously develop products for the commercial market and for the smallholder farmer.”
- Check it out.
UBS raises $400 million equity fund to capture ‘impact delta.’ The Rockefeller Global ESG Equity fund, run by Rockefeller Asset Management, invests in companies that are demonstrating improvement on environmental, social and governance, or ESG, issues (see, “UBS Wealth aims to capture “impact delta” in sustainable portfolio”). Capturing the up-side from companies’ investment in positive ESG is the same approach activist investor Jeff Ubben is taking with his new firm, Inclusive Capital Partners.
- Further reading. “The Impact Delta: Change is good for investors focused on environmental and social performance.”
Material Impact Fund closes $200 million for second ‘deep tech’ fund. The Boston-based venture capital fund backs high-impact materials, robotics and other deep tech companies. The firm, which doesn’t call itself an impact investor, aims to invest in “companies that generate high shareholder returns while also making a big difference,” Material Impact’s Carmichael Roberts wrote. Its most recent deal: water tech startup, Zero Mass Water.
Mexican alt-dairy venture Heartbest scores $2 million. Swiss foodtech VC Blue Horizon Ventures backed the three-year-old company, which makes plant-based cheese and milk. Last year, Chile’s NotCo secured $30 million for artificial intelligence-powered plant-based food development.
Lightship Capital closes $22 million for under-represented Midwestern founders. The Cincinnati-based venture capital firm, run by Candice Matthews Brackeen and her husband Brian Brackeen, is looking to raise $50 million for its first fund. SecondMuse Capital invested $20 million.
LISC and Kaiser Permanente partner on $60 million COVID recovery fund. The investment focus will be low-cost, flexible financing for women and minority-led businesses in low-income communities.
Agents of Impact: Follow the Talent
60 Decibels is hiring researchers… The Kellogg Foundation seeks a program officer in Albuquerque… Equal Innovation is looking for a scout for mission-driven startups and COVID research in Boston… Ceres releases its “Investor Guide to Deforestation and Climate Change”… India’s Impact Investors Council is hosting “Indian Impact Investing Showcase: Looking back and looking forward,” on Tuesday, June 30… The US SIF is offering a virtual training on fundamentals of sustainable and impact investment on Wednesday, July 22.
Thank you for reading.
–June 29, 2020