The Brief | May 3, 2021

The Brief: Black generational wealth, more-sustainable lithium, African small business fund, supplying artisans, solidarity economy

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Greetings, Agents of Impact! 

Featured: The Reconstruction

The Reconstruction: Accelerating Black entrepreneurship to build wealth across generations (podcast). Inheritance is not only about the wealth we pass down from grandparents to parents to children. It is also an expression of how systems and structures perpetuate inequities by blocking access to wealth accumulation. “Approaching generational wealth strictly in monetary term isn’t the panacea that we probably think it is, if future generations keep inheriting inequitable conditions, and systematic racism as well,” says Camelback Ventures’ Kelli Saulny, in the latest conversation on The Reconstruction, ImpactAlpha’s podcast series about moving capital toward justice. Camelback, a New Orleans-based nonprofit, provides coaching, investment opportunities, and community connections to BIPOC entrepreneurs.

Saulny has launched the Generational Inheritance Initiative, a social media campaign to spark a dialogue around intergenerational wealth, systemic change and what author Ta-Nehisi Coates calls racist kleptocracy. The 1944 GI Bill excluded Black veterans from access to tuition assistance, home and business loans. The Social Security Act of 1935 excluded whole categories of work, disproportionately made up of people of color, from retirement benefits and unemployment insurance. Redlining deliberately denied home loans in neighborhoods where people of color lived. Today’s racist tactics, from predatory lending to credit steering, are more insidious in extracting a “Black tax.” How we choose to recover from COVID is the biggest inheritance that we are going to leave to the next generation, Saulny tells The Reconstruction’s host Monique Aiken. “All of this has to be with an extraordinary, extraordinary amount of intentionality around sustainability,” she says. “I want to get to a point where… every generation isn’t starting over because of reinvented racism.”

Keep reading and listen to, “Accelerating Black entrepreneurship to build wealth across generations,” by Monique Aiken and Anjali Deshmukh, the latest episode in ImpactAlpha’s podcast series, The Reconstruction. 

  • Podcast series. The Reconstruction features engaging conversations with leaders of this reconstruction. Meet Rey Ramsey, Melissa Bradley, Rodney Foxworth, Carmen Rojas, Daryn Dodson and others who are moving capital toward justice. Catch up on Spotify, Apple or Anchor.
  • The beat. The Reconstruction’s landing page on ImpactAlpha has summaries of all of the podcast episodes, as well as original coverage, dealflow, features and Agents of Impact.

Dealflow: Follow the Money

EnergyX raises $20 million for sustainable lithium production. Demand for lithium, the lightweight metal at the core of electric vehicle batteries, could outstrip supply by mid-decade. Puerto Rico-based Energy Exploration Technologies, or EnergyX, has developed a membrane to draw the precious element from brine water. The process “produces orders of magnitude more lithium at a fraction of the cost,” EnergyX’s Teague Egan told ImpactAlpha. It also uses 90% less water than typical lithium mining operations, which rely on vast salt ponds. “There is a massive supply-demand imbalance,” said Egan. “We want to help close that delta.” 

  • Technology as a service. Customers for the company’s approach include Australia’s Orocobre Limited, which recently announced a $4 billion merger with Galaxy Resources to create the fifth-largest lithium mining company. EnergyX raised $18 million from investors including Obsidian Acquisition Partners, Helios Capital and the University of Texas, and an additional $1.5 million in a crowdfunding offering on Netcapital (see, “Crowdfunding’s awesome month”).
  • Dig in.

Goodwell targets a €50 million fund for small businesses and agriculture in Africa. The Dutch impact investment firm aims to invest one-third of the capital in ventures driving financial inclusion and one-quarter in agribusinesses. It also plans follow-on investments in existing portfolio companies like Kenyan rural e-commerce venture Copia, South African fintech MFS Africa and supply-chain financing company Nomanini, and Nigerian agriprocessor Tomato Jos. “Businesses led by local entrepreneurs are the key drivers of inclusive growth in Africa,” said Goodwell’s Nico Blaauw.

Two Sigma Impact and Avance acquire Wholesale Supplies Plus to supply artisans with quality products. Hedge fund Two Sigma launched its nine-figure impact investing business from its own balance sheet to prove the correlation between good jobs and business value. The firm and New York-based private equity firm Avance Investment Management are acquiring Wholesale Supplies Plus, an e-commerce platform that sells ingredients, packaging and other supplies to commercial artisans. It is Two Sigma’s second investment, following an investment in higher education provider Penn Foster in January (see, “Two Sigma Impact and BayPine invest in workforce educator Penn Foster”). Share this post.

Dealflow overflow. Other investment news crossing our desks:

  • Community Investment Management extends $100 million in debt to business banking venture Rho Technologies, following CIM’s $75 million investment in fintech Brigit.
  • CVS Health launches a $100 million corporate venture fund for early-stage companies making healthcare more accessible and affordable.
  • Melinda Gates’ Pivotal Ventures invests $250,000 to fight food insecurity through Helping Hands Community’s last-mile distribution.

Impact Voices: Pass the Mic

Letting go: How investors are giving up control to democratize finance. Economic principles and democratic decision-making practices that date from 19th century Great Britain could be key to the 21st century economy. “A generation of activists, investors and young philanthropists have borrowed principles from the solidarity economy to build new systems inside capitalism,” write Ben Wrobel of Village Capital and Meg Massey of Sanspeur in an excerpt from their book, Letting Go: How Philanthropists and Impact Investors Can Do More Good By Giving Up Control. Wrobel and Massy tell the story of foundations and impact investors who are experimenting with community-led funding models and ceding decision-making power to local activists and entrepreneurs.

  • Solidarity economy. The Southern Reparations Loan Fund, created in 2015 by activists of color as an answer to the deep racial wealth gap in the U.S. South, lends to worker-owned businesses that support Black and immigrant communities and poor white communities. Other participatory loan funds created around this time include the Boston Ujima Fund, the Baltimore Roundtable on Economic Democracy, and the L.A. Co-op Lab. Several of them came together to form a national network called Seed Commons.
  • Participatory investing. The book is “about how to structuralize humility by shifting decision-making power in philanthropy and impact investing closer to the ground,” philanthropy critic Edgar Villanueva writes in the book’s forward. The big idea: Changing the way funders make decisions, he says, can “repair long-worn bonds of trust and start to take responsibility for the damage caused by well-intentioned altruism in the past.”
  • Keep reading, “Letting go: How investors are giving up control to democratize finance,” by Ben Wrobel and Meg Massey on ImpactAlpha.

Agents of Impact: Follow the Talent

Philippe Dro, ex- of GlycoVaxyn, joins Adjuvant Capital as partner (see, “Investors put $300 million into Adjuvant Capital as global health innovation shines”)Victoria Fram steps down as managing director of VilCap Investments to lead impact investing at Sobrato Capital. Mike Davis of MPOWER Financing (a VilCap portfolio company) will become Vilcap Investments’s managing director… Separately, Village Capital is recruiting a managing director of impact investing in Washington, D.C… Caprock seeks a director of private investments in San Jose, Calif… BSR is hiring a director of ESG investing in New York or San Francisco… Global Development Incubator is looking for a global coordinator and project developer of agricultural finance in Washington, D.C.

The French Development Agency launches the AFD Digital Challenge to support innovative African projects in climate and biodiversity… Los Angeles fintech Camino Financial becomes certified as a national community development financial institution… Michael Etzel of Bridgespan Group is hosting “Investing that puts impact first,” with Matt Bannick, formerly of Omidyar Network, Lisa Hall of Apollo Global Management, and John Sobrato of The Sobrato Organization, Tuesday, May 11 (see, “How these wealthy families are driving outperformance on impact”).

Christina Leijonhufvud of BlueMark is hosting “How to be an impact leader: Making the Mark 2021,” with Tomi Amosun of Summit Africa, Elizabeth Boggs-Davidsen of U.S. International Development Finance Corporation, Cecilia Chao of Bain Capital Double Impact, Maria Kozloski of The Rockefeller Foundation, and Jeremy Rogers of Big Society Capital, Thursday, May 13 (see, “Why independent verification should be part of every investor’s impact management journey”)… Craigmore’s Che Charteris and Nick Tapp are hosting “Forestry, carbon and climate change: Investing for the future,” Thursday, May 20.

Thank you for your impact.

– May 3, 2021