The Brief: Accelerating Native entrepreneurship, managing zero-carbon grids, mezzanine debt for Africa, building renter credit, catalyzing climate capital

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ImpactAlpha

Greetings, Agents of Impact! 

Featured: Inclusive Economy

Native-led organizations join forces to accelerate entrepreneurship in Indian Country. U.S. tribal lands are among the hardest places in the world to do business, with entrepreneurs struggling to access capital, land, infrastructure and reliable Internet connectivity. Four Native-led organizations are launching a joint organization to help businesses in tribal communities secure funding and resources. “None of our organizations can effectively tackle the systemic challenges alone,” says Dave Castillo of Native Community Capital, itself the product of a 2019 merger of community development financial institutions in Arizona and New Mexico. With New Mexico Community Capital, Change Labs and Native Women Lead, Native Community Capital is launching a new organization to handle administrative, operational, data and fundraising functions to enable the Native entrepreneurship support organizations to focus on their communities in the Southwest. “As a collective network we can make real progress towards economic sovereignty, not just for Indigenous people but all people denied access to capital and wealth creation,” says Native Women Lead’s Jaime Gloshay.

  • Self-determination. The initiative is backed by a $3 million grant from the W.K. Kellogg Foundation. The four organizations will determine their own metrics for success. “When we talk about business success in tribal communities, it almost never has anything to do with financials or growth. It’s about giving back to the community,” Change Labs’ Heather Fleming tells ImpactAlpha. “The Silicon Valley metrics that are so often used as a reference for business success are by no means what Native entrepreneurs aspire to, so it doesn’t make sense for our organizations to be evaluated by those standards.”
  • Accelerating the accelerators. A report from Change Labs last year found that the business environment on the Navajo Nation is on par with Zimbabwe and the Central African Republic (see, “Overcoming obstacles to Navajo entrepreneurship“). The federal Bureau of Indian Affairs is preparing new rules to give Native communities greater say over the design of local business ecosystems through a new Indian Business Incubators Program. “The hope is to see federal funding helping Native communities build their own entrepreneurial support infrastructure,” says Fleming, “rather than paying for non-Native business incubators and business support organizations to establish programs or cohorts in Native communities.”
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Dealflow: Low-carbon Transition

Camus Energy secures $16 million to help utilities manage low-carbon electric grids. The San Francisco startup, launched by ex-Google engineers, uses artificial intelligence and machine learning to help local utilities and energy providers improve grid efficiency. By connecting substations and transformers to rooftop solar systems and smart water heaters, grid operators can improve reliability and compensate local resource owners. “We see a fundamental shift happening within the electric utility segment, and it’s one that releases the old image of consumers as ratepayers and instead sees them as community members,” said Camus’ Astrid Atkinson. The Series A financing round was led by Park West Asset Management, with participation from Congruent Ventures, Wave Capital and other investors.

  • Electric co-ops. In Colorado, member-owned Holy Cross Energy is aiming to supply customers with 100% carbon-free power by 2030. The utility said Camus’ platform will help it integrate community and consumer-owned solar arrays and energy storage, manage peak energy demand, and increase electrification of buildings and transportation.
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Vantage Capital raises $207 million in mezzanine debt for African businesses. The Johannesburg-based firm will provide non-dilutive financing for mid-sized African businesses “that would otherwise struggle to access capital through conventional banking channels,” said Vantage’s Luc Albinski. The fund will make investments of $10 million to $40 million. Investors in the fourth fund include the International Finance Corp., the U.K.’s CDC Group and the Swiss Investment Fund for Emerging Markets. In its first three funds, Vantage raised $677 million, mainly from European and U.S. insurance companies, pension funds, endowments and development finance institutions. It has invested in 31 businesses in 11 countries. Share this post.

Dealflow overflow. Other investment news crossing our desks:

Signals: Climate Finance

Breakthrough Energy will blend finance to scale next-gen climate tech. The billionaire-backed fund manager plans to stack capital to catalyze billions of dollars to scale early-stage climate solutions and drive down costs. The stack: philanthropic funding, market-rate equity, debt financing, government loan guarantees and off-take agreements on the back-end. Breakthrough Energy Catalyst expects to start funding projects early next year. Its first partnership, with the European Commission, aims to mobilize $1 billion over five years for large-scale demonstration projects. “People talk about the solar cost journey as a 10-year incredible decline. They forget about the 40 years before that,” Breakthrough’s Jonah Goldman told ImpactAlpha. Humanity does not have decades to wait for similar cost declines in clean jet fuel, long-duration storage, green hydrogen and direct air capture technologies, he said. Goldman hopes to use concessionary capital to marshal “multiple billions” of dollars over the lifespan of the project. 

  • Catalytic capital. Breakthrough Energy Catalyst will tap philanthropists, companies, and governments in what Goldman calls a “nontraditional traditional blended finance mechanism.” To incentivize corporations and other potential off-takers to bear the risks and costs of early-stage solutions, Catalyst is working with CDP to calculate the future decarbonization impact of early investments. Catalyst envisions these “catalyzed emissions” as a new metric that companies can tout. “Investing in clean energy projects can become a competitive advantage,” wrote Breakthrough investor Bill Gates. Cambridge-based PRIME Coalition developed a method for assessing early-stage ventures’ potential to reduce future carbon emissions (see, “A tool for assessing the potential climate impact of startup ventures”).
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Agents of Impact: Follow the Talent

SLC Management appoints Anna Murray as managing director and global head of ESG…  Techstars Sustainability Accelerator is hiring a senior operations associate in Boulder, Colo… Principles for Responsible Investment is looking for a senior policy analyst in Toronto or Montreal… The American Heart Association seeks a managing director for its social impact fund in Jacksonville, Fla.

ClimateXchange is hosting “Rooting Environmental Justice Efforts in Community,” with Veronica Padilla-Campos of Pacoima Beautiful and Kate McIntosh of Louisiana Bucket Brigade, today at 3pm ET…  Transform Finance will host, “Democratizing Decision-Making for CDFIs and Other Financial Intermediaries,” with Low Income Investment Fund’s Sondra Ford, Community Vision’s Nate Schaffran, and Olamina Fund’s Leslie Lindo, July 28.

Thank you for your impact.

– July 21, 2021