The Brief: Bitwise’s digital new deal, green steel, ImpactAssets 50, mail-truck misfire, impact investor clubs

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ImpactAlpha

Greetings, Agents of Impact! 

Featured: ImpactAlpha Original

Bitwise Industries raises $50 million to go national with its model for inclusive tech ecosystems. Before the growth of Bitwise Industries, few would have mistaken Fresno, Calif. for a tech hub, even though the gritty San Joaquin Valley farm city is only 150 miles from pricey Silicon Valley. Bitwise has challenged those assumptions, training more than 5,000 locals for technology careers since 2013 and rehabilitating more than 450,000 square feet in faded downtown buildings in Fresno and the nearby Bakersfield and Merced. The Hive, a former records warehouse, has become a colorful 50,000-square-foot building that houses two dozen startups and anchors downtown Fresno. With a new round of $50 million in financing, Bitwise is taking its integrated model to Toledo, Ohio and other cities that have been largely left out of tech-related investment and job creation. “The Bitwise model empowers communities of concentrated poverty to access quality jobs in the fastest growing industry in the global economy,” says Jake Soberal, co-founder and co-CEO with Irma Olguin Jr. (see, “Agent of Impact”).

Bitwise’s revenues come from workforce training, technology consulting and real estate. The company renovates blighted buildings and leases space to mission-aligned companies. Some of the tenants may hire tech talent trained in Bitwise’s apprenticeship program. Bitwise’s own technology consulting arm creates software solutions for private, nonprofit and governmental organizations. Kapor Capital led its Series B round. “Jake and Irma cracked the code on how you do economic development in underdog cities – cities that are not part of the tech ecosystem and have highly disparate levels of income and wealth,” Kapor Capital’s Mitch Kapor tells ImpactAlpha. Bitwise is also expanding its “Digital New Deal” framework to leverage tech procurement by state and local governments to expand the apprenticeship model. “We can attach it to enormous scale if the government would think differently about how it buys its technology,” says Soberal. “Instead of buying from a tech consulting firm, you can buy from Bitwise. You’d get the technology, and in the process, we’ll raise up a next-generation, representative tech workforce of folks who are coming from low-earning roles.”

Keep reading, “Bitwise Industries raises $50 million to go national with its model for inclusive tech ecosystems,” by Roodgally Senatus on ImpactAlpha.

Dealflow: Follow the Money

Ikea-backed foundation invests in fossil fuel-free equities and green steel. The IMAS Foundation, launched by the furniture company’s founder, is committing €250 million to a fossil fuel-free public equities fund developed by U.K.-based investment boutique Osmosis. The Netherlands-based foundation, with assets of €11 billion ($13.4 billion), invests on behalf of Ikea’s corporate philanthropy. It is the first backer of Osmosis’s Resource Efficient fund. IMAS also is investing directly in a fossil fuel-free steel manufacturing plant in Sweden. The €2.5 billion plant, being developed by Swedish company H2 Green Steel, will be powered by green hydrogen.

  • Green steel. “A rapid change of the steel industry is extremely important,” says H2’s Henrik Henriksson (see, “Boston Metal raises $50 million to produce emission-free steel”). H2’s planned facility would produce five million tons of clean steel annually by 2030. Other investors in H2’s €50 million Series A equity round include SMS Group, Bilstein Group, EIT InnoEnergy and Spotify founder Daniel Ek.
  • Renewables investments. Ikea has invested €2.5 billion in 1.7-gigawatts of renewable energy since 2009, via Ingka Group, which manages Ikea stores worldwide. The group aims to use 100% renewable energy in its operations by 2025. 
  • Read on

Dealflow overflow. Other investment news crossing our desks:

  • Habitat for Humanity secures $30 million to develop homes across Canada. Community development bank Vancity is providing the nonprofit with a line of credit for Habitat for Humanity’s local chapters across Canada. The financing will enable the construction of more than 400 new affordable homes.
  • ChargeLab raises $4.3 million for EV infrastructure software. Construct Capital and Root Ventures backed the Toronto-based company to deliver software to run networks of charging stations. 
  • South Africa-based loan fund launches to back impact ventures. African Alliance Asset Management and Tshikululu Social Investments are looking to finance African companies driving financial inclusion, new infrastructure and clean energy. 

Signals: Ahead of the Curve

ImpactAssets 50 showcases an increasingly diverse impact ecosystem. Worker ownership. Small business relief. Impact real estate. Climate solutions. This year’s ImpactAssets 50 showcases a diversity of impact investment options, from billion-dollar funds to first-time managers. The public database of 50 funds with at least $25 million in assets and three years of track record spans asset classes, sizes and geographies. 

Postal Service misses an opportunity to ‘modernize’ fleet with electric vehicles. A contract to upgrade the U.S. postal agency’s 165,000 delivery trucks runs counter to the Biden administration’s effort to leverage government purchasing for the low-carbon transition. The 10-year deal went to Wisconsin-based Oshkosh Defense. The loser: Cincinnati-based electric vehicle maker Workhorse Group. The contract was awarded by U.S. postmaster Louis DeJoy, a holdover from the Trump administration. USPS trucks used about 195 million gallons of gas in 2019, costing $500 million and generating 1.9 million tons of carbon emissions.

  • Lock-in. DeJoy “is trying to lock our postal vehicle fleet into decades of carbon-intensive transportation,” said the Zero Emission Transportation Association’s Joe Britton. “This was a gas-powered bid.”
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Agents of Impact: Follow the Talent

Athena Ronquillo-Ballesteros, ex- of Growald Family Fund, joins the Climate Leadership Alliance as managing director of global climate strategies… OneTen’s Maurice Jones joins Ignite Social Impact as an advisor… Kristen Eshak Weldon, ex- of Louis Dreyfus Company, joins Partners Capital as global head of ESG and impact investing… Elemental Excelerator is seeking applications for its energy and cleantech accelerator…

In Washington D.C., Accion Venture Lab is recruiting a managing director, Opportunity Finance Network is hiring a senior investment officer, and Village Capital is looking for a senior manager of innovations… Croatan Institute seeks a part-time or full-time analyst or associate… 17 Asset Management is hiring a data-science sustainable investing fellow… Envestnet is looking for an impact investing intern in Denver… Impact Finance Center is hiring six fellows, including an impact investing institute fellow. 

Patamer Capital is hosting “Financial inclusion for Southeast Asia’s underserved,” with Aldi Haryopratomo, ex- of GoPay and Mapan, Thao Tracy Phan of Kim An, Noshin Nova of the Global Impact Investing Network, and Patamer’s Beau Seil, Friday, Feb. 26… Impact Finance Center is hosting “Impact Real Estate Investor Club,” Tuesday, Mar. 16, “New York State CDFI Investor Club,” Friday, Apr. 2 and “Sustainable Forestry Investor Club,” Wednesday, Apr. 21.

Thank you for your impact.

– Feb. 24, 2021