The Brief | August 24, 2021

The Brief: Artists as startups, financial access in Ghana, long-duration batteries, Bridges’ impact exits, farm carbon, innovate Alabama

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Greetings, Agents of Impact! 

Featured: Creative Economy

Artists are startups and creators CEOs as technology decentralizes the creative economy. Musicians, actors, artists and other “creators” are getting creative about reaping the economic gains of their influence and turning their talents into sustainable livelihoods and wealth. New tech stacks and business models are helping creators of all backgrounds sidestep legacy gatekeepers to build, monetize and own their creative production. From non-fungible tokens and blockchain-based payments to customer-relationship management and subscription services, creatives are using new tools to become… CEOs. “Artists really are startups,” says Janice Taylor of Los Angeles-based Ear Butter, which is building blockchain-based tools that allow artists to set their own valuation and tap an “intellectual property ATM,” as well as debt and equity to grow their businesses. “There isn’t a soul alive who hasn’t been impacted by music,” Taylor says. “And we’ve never thought of them as a business or a startup? Or as CEO of their own company? Think about it.”

  • Creative tools. Atlanta-based Fanbase, founded by Isaac Hayes III, son of the late R&B legend, lets creators and community-builders own and monetize their content through monthly subscriptions. Arternal in L.A. is expanding its platform for art galleries to help Black artists own and communicate with their collector base, so that they’re not beholden to the galleries. “There’s a lot of energy around Black artists. There’s not a lot of energy around supporting Black businesses,” says Arternal’s Sean Green, who has attracted financing from venture capitalist Ben Horowitz, Precursor Ventures and the Ford Foundation.
  • Impact capital. Hayes tapped equity crowdfunding to raise nearly $3.5 million for Fanbase and last month brought a dozen creators of color to Atlanta to discuss equality, monetization and ownership. “This is how creators of color should be treated and acknowledged,” he tweeted. Impact-aligned capital can help ensure artists and creators are winners in the growing creative economy, says Laura Callanan of Upstart Co-Lab. “It would be terribly ironic if the creative economy cannot benefit the creatives.”
  • Keep reading, “Artists are startups and creators CEOs as technology decentralizes the creative economy,” by Dennis Price on ImpactAlpha. Catch up on all of ImpactAlpha’s coverage of the creative economy.

Dealflow: Financial Inclusion

​​LeapFrog takes a stake in Ghana’s Fidelity Bank to expand access to financial services. More than 40% of adults in Ghana don’t have a bank account. Fidelity Bank Ghana, one of the country’s largest private banks, has been trying to bring traditional banking services to un- and underbanked adults through its Inclusive Banking division. An investment from LeapFrog will enable the bank, which serves two million customers, to expand mobile money, micro- and small-business loans and other products for underserved customers.

  • Impact acquisition. LeapFrog acquired 17% of Fidelity Bank by buying stakes from investment fund manager Amethis and Edmond de Rothschild Equity Strategies, both of which have been Fidelity investors since 2014.
  • Read on

Form Energy scores backing from TPG’s $5.4 billion climate fund. Somerville, Mass.-based Form recently declared a breakthrough for its iron and air-based battery that will enable renewable energy projects to cheaply store power for days. At less than $20 per kilowatt-hour of storage, Form’s long-duration battery could speed the replacement of fossil-fuel plants that provide baseload to electricity grids. Form’s first project will provide 150 megawatts of storage to Great River Energy utility in Minnesota. TPG Rise invested in Form through its new climate fund (for background see, “TPG Rise ($5.4 billion) and Brookfield ($7 billion) raise the stakes for climate funds”). 

  • Game changer. Co-founded by alums of Tesla and the lithium-ion battery company A123, Form was an early investment of Breakthrough Energy Ventures and The Engine, the MIT-based VC fund that backs “deep technology” startups. Other investors include steelmaker ArcelorMittal, Italian oil company Eni, Singapore’s Temasek, Energy Impact Partners and Capricorn’s Technology Impact Fund.
  • Check it out.

Bridges Fund Management’s sustainable growth fund completes three exits in three months. The three companies created about £170 million ($233.7 million) in market value under Bridges’ ownership, according to the U.K.-based impact investor. Bridges last month sold a majority stake in Wholebake to Elysian Capital. It initially invested in the Welsh gluten-free snacks manufacturer in 2014. Bridges also sold a majority stake in second-hand book retailer World of Books to private equity firm Livingbridge in June.

  • Pet health care. Bridges’ most recent exit: The Vet, which it launched with founder Jane Baldwin in 2013. It sold the company to U.K.-based animal care giant CVS Group. The Vet provides access to low-cost veterinary services for low-income pet owners, and during COVID, created a telehealth service for customers.
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Regrow secures $17 million to help farmers monetize carbon reductions. “Implementing and scaling responsible, sustainable agricultural practices is the most actionable strategy we can take to reverse climate change,” said Regrow’s Anastasia Volkova. The Durham, N.H.-based company’s carbon monitoring software is designed “to customize, optimize and monetize” climate-smart practices across the global sustainable agri-food supply chain. Investors in the round include Microsoft, Cargill and Tenacious Ventures (for background, see, “Iowa’s soy farmers to be paid for sustainable soil and water outcomes”). Regrow monitors more than 150 million acres of agricultural land in 45 countries. Check it out.

Dealflow overflow. Other investment news crossing our desks:

  • Remittance-payments platform Zepz (formerly WorldRemit) scores $292 million, at a valuation of $5 billion, from Farallon Capital and existing investors LeapFrog, Accel and others.
  • OGCI Climate Investments, John Crane and Energy Innovation Capital back Kairos Aerospace’s $26 million round to identify methane leaks and emissions from oilfields.
  • Boston Impact Initiative-backed WeSpire raises $13 million to help corporations boost employee engagement with ESG initiatives.
  • South Africa’s VitruvianMD secures early funding for low-cost, AI-powered diagnostic devices for low-resource health facilities.

Impact Voices: Place-Based Investing

Building an ecosystem for workforce development and opportunity for all in Alabama. “If you are an impact investor seeking ways to make a difference, come to Alabama,” writes Tequila Smith, president of Alabama Power Foundation, the philanthropic and impact investing arm of the state’s largest utility. The state last year adopted “benefit corporation” legislation that allows for-profit companies to enshrine their social missions in their corporate charters (for background, see “A stock market test for stakeholder capitalism as public benefit corporations go public”). Alabama Power Foundation is anchoring the state’s association of benefit corporations to identify opportunities for investment and workforce development. “That can help close the wealth gap, as minority-owned firms are more likely to become benefit corporations,” Smith writes.

  • Working capital. The foundation used a program-related investment to extend a line of credit to the nonprofit Build UP, which relocates dilapidated houses and employs student apprentices to refurbish them. The line of credit enables Build UP to better deploy federal funds, reduce costs and restore more homes. “There are many more impact investments like this across Alabama,” Smith writes.
  • Keep reading, “Building an ecosystem for workforce development and opportunity for all in Alabama,” by Tequila Smith.

Agents of Impact: Follow the Talent

Johnson & Johnson is recruiting an impact ventures investments director… Veris Wealth Partners is hiring an impact investing wealth manager… Social Finance is looking for a data analytics associate in Boston… The National Community Reinvestment Coalition has multiple positions open in the Washington, D.C. area… King Philanthropies seeks a portfolio manager. 

Microsoft is hiring a strategic partnerships manager of philanthropies in Amsterdam… Aspen Institute is looking for an associate director in New York… Kiva is recruiting a U.S.-based director… Impact Investors Council is hosting “India Climate Investment Conclave: Unlocking Capital for Early-stage Climate-tech Startups,” Sept. 9-10. ImpactAlpha subscribers get 25% off with code IIC-CLIMATEIMA25.

Thank you for your impact.

– Aug. 24, 2021