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The Brief: Agents of Justice, Ethiopian delivery tech, women’s entrepreneurship, COVID bond for Latin America, virtual due diligence



Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Agents of Justice: The social mobilization is on. Agents of justice are agents of impact. For months, ImpactAlpha has been watching, and waiting, for a broad social mobilization for change, in the understanding that real change means shifting power, that power is surrendered only reluctantly, and that overcoming that reluctance requires an historic mobilization of popular will. Then came the deaths of Ahmaud Arbery in Georgia, Breonna Taylor in Louisville, Ky., and last week, George Floyd in Minneapolis. The protests in 75 cities and the rage felt by millions of families and households this weekend provide an invaluable service, exposing systemic risks and forcing a disruption in order to deal with them. Leaders are pointing ways forward and, even amid the violence and confrontation, stories of solidarity are emerging. Black protesters protected vulnerable officers. White protesters shielded Black protesters. Police chiefs in CamdenFlintAtlantaSanta CruzNorfolkHouston and other cities joined marches, and officers across the country took a knee in solidarity. Long Twitter threads document moments of dancing, singing and peaceful protest that cable television largely missed.

In Atlanta, activist and rapper Killer Mike laid out plans to “plot, plan, strategize, organize and mobilize.” “If you want change in America, go and register to vote,” urged Atlanta Mayor Keisha Lance Bottoms. “Do it in November. That is the change we need in this country.” Journalist Sherrell Dorsey is lifting up statements of solidarity from tech companies in order to hold them accountable. Lambda School’s DeWayne Roy is calling on investors to overcome bias. Opportunity Hub’s Rodney Sampson called on top venture capital firms to fund inclusive tech ecosystems in cities with majority Black populations. In this moral moment, “We must choose to be agents of justice,” said Sen. Cory Booker. “Don’t just activate yourself online,” former President Barack Obama told graduates of historically Black colleges and universities last month. “Change requires strategy, action, organizing, marching, and voting in the real world like never before.” The recovery from the COVID crisis presents an historic opportunity; the trillions flowing in relief have upended the excuse that resources are not available. In the days ahead, we’ll explore many such strategies. We’ll especially be on the lookout for leadership to “plot, plan, strategize, organize and mobilize” the broad social mobilization that is so urgently needed to fight racism, restructure systems, and shift power.

Keep reading, “Agents of Justice: The social mobilization is on,” by David Bank and Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

RENEW re-ups investment in Ethiopian delivery tech startup. Addis Ababa-based Roadrunner’s tech platform helped delivery startup Deliver Addis expand from restaurant delivery to groceries and other essential goods during COVID. RENEW, which invests in small and growing businesses in Ethiopia and Uganda, has invested a third slug of capital in Roadrunner. Terms of the deal were not disclosed. The capital invested comes from the Impact Angel Network, a network of angel investors, and Global Affairs Canada.

  • Investor aid. COVID created a surge in new demand and opportunity for both Roadrunner and Deliver Addis, which provides delivery services for 100 retail and restaurant businesses in the city. Others in RENEW’s portfolio, like tourism business Travel Ethiopia, have struggled. RENEW connected Deliver Addis to Travel Ethiopia, which is now supplying its vehicles and staff to support Deliver’s expansion. Looking for synergies across portfolios “is one way GPs can help their portfolio companies right now,” RENEW’s husband and wife team, Matt and Laura Davis, told ImpactAlpha.
  • Gender lens. RENEW also invests in African women-owned businesses through a “mini-investment” fund (see, RENEW rightsizes checks with new East Africa fund for female founders.”)
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ANDE’s Advancing Women’s Empowerment Fund awards $1.2 million. The fund, backed by USAID and the Visa Foundation, sought innovative ways to bridge the estimated $320 billion annual gap in access to finance for women-led businesses in developing countries. The eight winning programs, out of more than 180 applicants, include: MIT’s D-Lab and Village Capital for initiatives in India; Santa Clara University’s Miller Center for a Pakistan-focused initiative; Cambodia-focused SHE InvestmentsVillgro Philippines; Vietnam-focused Women’s Initiative for Startups and Entrepreneurship; Myanmar-focused partners BoP Innovation Center and One to Watch; and Southeast Asia-focused Value for WomenMore.

Latin American development bank issues €700 million COVID bond. The five-year bond is Corporación Andina de Fomento’s first social impact bond. Proceeds will provide COVID economic relief to support small businesses and women, indigenous, minority, migrant and underserved populations in member countries (see, Countries and companies tap fixed-income market with ‘social bonds’ for COVID relief). BNP Paribas was a lead manager of the bond, which is in addition to CAF’s $2.5 billion pandemic emergency credit fund and a $300 million health response fund. Check it out.

Curu raises $3 million to help individuals overcome bad credit. Poor credit disproportionately affects students, young adults, immigrants and low-income individuals. Denver-based Curu flags credit issues for consumers and helps them meet eligibility requirements. Vestigo Ventures, Harlem Capital, Matchstick, Techstars and Chingona Ventures and others backed the round.

Community development financial institutions get $10 billion Paycheck Protection Program carveout. The move recognizes the role CDFIs play in getting loans to underserved businesses (see, Innovative CDFIs scale up to help underserved communities move from relief to recovery). The funding amounts to $6.8 billion after accounting for the $3.2 billion in loans CDFIs have already approved during the second round of PPP funding.

Accion’s Center for Financial Inclusion and MIX, a financial inclusion data organization, will merge to expand data and research on financial services providers.

Capricorn Investment Group acquires minority share of ESG investment manager Osmosis Investment Management.

Impact Voices: Pass the Mic

Redesigning due diligence for a deal pipeline in lockdown. Constraints breed creativity. Investors with the determination (or mandate) to keep capital flowing through the COVID crisis are turning physical constraints into opportunities to address long-standing inefficiencies and biases in due diligence processes. Catalyst at Large’s Suzanne Biegel shares lessons from investors on the forefront of virtual due diligence in a guest post on ImpactAlpha.

  • Last mile. Zoom meetings are proving insufficient for those investing in remote areas where broadband connectivity is limited. Some investor communities are leveraging local consultants as well as the due diligence of large institutions. Says Finnfund’s Hanna Kauppinen, “They might have already been to the site, met the people, seen the operations, so then we can also trust their work.”
  • Mitigating bias. Remote due diligence presents an opportunity for first-time and emerging markets fund managers who can demonstrate local knowledge to prospective investors. FyreFem’s Cathy Goddard warns that relying on existing networks could replicate existing cliques and biases. Goddard is leveraging Crowdsmart.io, an investment prediction platform powered by artificial intelligence, and an intellectually diverse evaluation committee. “Imagine how far we can move from where we are by using collaborative systems, by using electronic systems, by using referral networks and trust networks.”
  • Keep reading, “Redesigning due diligence for a deal pipeline in lockdown,” by Suzanne Biegel.

Agents of Impact: Follow the Talent

The Nature Conservancy is looking for a director of product development for debt conversions Arlington, Va., Nairobi or London… Open Philanthropy is hiring a finance associate.

Online this week:

  • Wednesday, June 3. ImpactAssets, with new CEO Margret Trilli, is hosting “Three Months Into COVID – Insights From The Impact Trenches”… Faith & Finance: “Can Capitalism Be Healed?” with Eve Poole, author of Capitalism’s Toxic Assumptions.
  • Thursday, June 4. Transform Finance is hosting “Aligning Incentives and Managing Impact in Smallholder Farmer Financing: GAWA Capital’s Huruma Fund”… SVX Mexico is convening “MasterClass on Alternative Finance Instruments for Impact Investing.”

Later this month:

  • Tuesday, June 9. Moving the Market Initiative and The Investment Integration Project are hosting “Launching Understanding Systemic Social Risk: A Roadmap for Financial Industry Action.”
  • Thursday, June 11. i(x) investments is launching Family Impact, a series for family offices. Its first discussion is “Can We Build Back Better? The Role of Private Capital in the Economic Recovery”… Impact Entrepreneurs is hosting “Understanding the Impact of the Creative Economy” with Upstart Co-Lab’s Laura Callanan, Fundación Compromiso’s Carolina Biquard, HEVA Fund’s George Gachara and Conscious Endeavors’ Jack Meyercord.
  • Friday, June 12. Faith & Finance: “A Blueprint for Local Investing,” with Ross Baird, David Robinson Sr. and David Robinson Jr.

Thank you for reading.

–June 1, 2020

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