The Brief | October 5, 2021

The Brief: Activating retail investors, equitable car insurance, reforestation drones, U.S. vs. Europe, private equity in Africa

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Greetings, Agents of Impact! 

Building health and wealth. It’s not just about more solar and wind installations. The low-carbon transition requires building retrofits, mobility electrification, energy-use optimization and infrastructure investments in every urban and rural community. ImpactAlpha and The Plug are co-hosting “Black tech, green solutions” to explore opportunities to build health and wealth in climate-impacted communities. Join Donnel Baird of BlocPower, Kameale Terry of ChargerHelp, SaLisa Berrien of COI Energy and Taj Eldridge of Include Ventures, Tuesday, Oct. 12 at 10am PT / 1pm ET / 6pm London. RSVP today.

Featured: Capitalism Reimagined

Retail investors get new tools to flex their collective power as engaged shareholders. Just as large asset managers increasingly engage in “active stewardship” of the companies in their index funds, so too can small, individual investors. Brooklyn-based Troop, and startups like Tulipshare and Tumelo, both in the U.K., are building tools to help retail investors vote on board candidates and shareholder resolutions and press major asset managers on issues like climate change, private prisons, recycling and working conditions. Shareholder resolutions and issue-driven proxy fights, once largely symbolic, dramatically gained relevance this year when the hedge fund Engine No. 1 led an improbably successful campaign to elect insurgent directors to the board of climate laggard ExxonMobil. Such efforts are typically focused on pension funds, asset managers and other institutional investors. Small investors hold similar convictions – and stocks – but have largely been left out of the shareholder-engagement party.

Retail investors account for between 10% and 15% of daily trading volume of the Russell 3000, the broadest U.S. stock index. Troop’s vision: to harness the energy and impact on display with GameStop and other “meme stocks” to help small, individual investors influence corporate behavior through shareholder resolutions and other activist campaigns. The startup’s app will educate retail investors and enable them to join investor campaigns by pledging shares or buying a minimum number to be able to vote. One likely campaign: a push to get private prison builder CoreCivic to include a formerly incarcerated person on its board. TulipShare members recently purchased $34,000 in shares of Apple with the intent of persuading the company to allow third-party technicians to repair the company’s products. Tumelo aims to enable small investors inform pension fund managers like Legal & General and Aviva Investors about how they would like to see them vote. The GameStop movement fizzled because the investors had no understanding of their collective ownership position nor any long term, constructive goal, Troop’s Felix Tabary told ImpactAlpha. “We were really interested in figuring out what it would take to systematically repeat that kind of investing.” 

Keep reading, “Retail investors get new tools to flex their collective power as engaged shareholders,” by Amy Cortese on ImpactAlpha.

Dealflow: Returns on Inclusion

LOOP secures $21 million to make car insurance more equitable. The average cost of car insurance for a good driver with good credit in the U.S. is $1,592 per year, compared to $2,812 per year for a good driver with bad credit. At least 26 million Americans have no credit history. Austin-based LOOP insures drivers based on weather conditions, traffic data and how they drive rather than demographics, credit scores, income and education. LOOP launched in Texas this month with a waiting list of more than 30,000 drivers. 

  • Impact tech. LOOP’s Series A round was co-led by Foundry Group and the venture fund 01 Advisors. “LOOP is going after a huge opportunity to better serve a massive, yet overlooked and undervalued population,” said Foundry’s Jaclyn Hester. LOOP closed a $3.3 million seed round in January.
  • Tap in.

Reforestation startup DroneSeed raises $36 million for rapid wildfire recovery. The Seattle-based company works on reforestation projects with government agencies, timber companies and nonprofits such as The Nature Conservancy. It uses a fleet of drones to plant seeds and seedlings as soon as 30 days after a fire. DroneSeed then sells carbon credits to companies looking to reduce their carbon footprint. The Series A financing round was led by Social Capital and Seven Seven Six, with participation from DBL Partners, TIME Ventures, Spero Ventures and Tesla co-founder Marc Tarpenning. More than half of the investors have a climate and impact focus, according to DroneSeed.

  • Seedling shortage. DroneSeed in August acquired Silvaseed, a forestry seed collection and supply business. Demand for seedlings is growing with the active 2021 fire season. The acquisition “enables us to scale up the infrastructure needed for reforestation to meet this skyrocketing demand and customer need,” said DroneSeed’s Grant Canary.
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Development Partners International closes billion-dollar Africa-focused fund. The $2.8 billion investment firm invests in growth-stage companies serving Africa’s growing consumer and middle classes. DPI’s impact themes focus on job creation, gender and climate change. Its third African Development Partners fund raised $800 million from external investors; DPI is committing $250 million in co-investment capital. DPI says the fund is “one of the largest funds dedicated to investing global capital in Africa.” Early portfolio companies include fintechs Channel VAS and MNT-Halan; Tunisian tomato producer SICAM; and Kelix Bio, which is enabling access to generic pharmaceuticals.

Dealflow overflow. Other investment news crossing our desks:

  • Indonesia’s e-commerce startup Ula raises $87 million to expand its tools and services for small retailers.
  • Rivian, the Amazon-backed electric truck maker, filed for an IPO after raising $2.5 billion in July.
  • A Mirova impact private equity fund is looking to raise €300 million ($348.6 million) from institutional and private investors.
  • Golding Capital Partners is looking to raise €300 million for a private equity impact fund that will invest in global agrifood tech, fintech and climate tech companies.

Impact Voices: Impact VC

How impact venture capital differs in the U.S. and Europe. Impact investing is a global movement, with regional variations. Approaches in the U.S. and Europe, which have the two largest concentrations of impact venture capital investors, have developed “with some subtle and not-so-subtle differences,” Paul Miller of London-based Bethnal Green Ventures writes in a guest post. U.S. impact VCs, for example, are using the “impact alpha” thesis to gain an edge on their commercial counterparts – but jettisoning the word “impact.” European impact VCs are leveraging strong public sector support to back ventures that augment social services. While most impact VCs are located in the U.S., notes Miller, European funds manage a disproportionate amount of impact capital. Read Miller’s full post.

  • Go deeper. Bethnal Green Ventures is hosting “Impact VC: US vs Europe,” with guests from Better Ventures, Uprising and Ananda Impact Ventures, Thursday, Oct. 7. RSVP today.

Agents of Impact: Follow the Talent

UT Austin professor Michael Hole joins Notley Ventures as a partner… Fiona Reynolds, the outgoing CEO of the Principles for Responsible Investment, joins the advisory board of Quinbrook Infrastructure Partners… Ed Farrington, ex- of Natixis Investment Managers, joins Impax Asset Management as head of distribution for North America… Citi Impact Fund is hiring a vice president… National Community Investment Coalition seeks a communications director / managing editor, among other roles… KKR is looking for an ESG data manager… Applications are open for Impact Capital Managers’ summer Mosaic Fellowships for first-year graduate students from traditionally underrepresented backgrounds. 

Dalberg is hosting “Investing in the Missing Middles: A route out of Latin America’s economic crisis,” with Alive Ventures’ Santiago Alvarez, Pomona Impact’s Richard Ambrose, Andes Impact Partners’ Jamie Ramirez, Latimpacto’s Carolina Suarez, and Dalberg’s Laura Amaya, Tuesday, Oct. 19… Social Value International is hosting “Social Value Matters,” Oct. 21-22 in Bangkok and online… TIIP and CFA Societies are hosting a series of October events on systems investing and the future of ESG.

Thank you for your impact.

– Oct 5, 2021