Greetings, Agents of Impact!
Impact Voices: Blended Finance
Climate Finance Partnership blends philanthropic, public and private capital for climate infrastructure in emerging markets. Asset manager BlackRock will leverage $100 million in first-loss capital from the Hewlett Foundation and Grantham Environmental Trust, as well as the German and French governments, to mobilize at least $400 million in institutional private-equity capital commitments for renewable energy sources, energy efficiency, energy storage, and clean and low-emission transportations systems, in Africa, Southeast Asia, and Latin America. In a guest post on ImpactAlpha, Hewlett’s Marilyn Waite details the new partnership and makes the case that the approach should be replicated by governments globally. Read Waite’s post now.
Asia-Pacific is the next frontier for blended finance. The Tropical Landscapes Financing Facility and the Japan ASEAN Women Empowerment Fund have leveraged public and philanthropic funding to together raise more than $200 million in private capital for development in the Asia-Pacific region. Sub-Saharan Africa is the only region with more blended finance activity. In a guest post on ImpactAlpha, Convergence’s Adhiti Gupta makes the case that more funding to de-risk the design and structuring of blended finance vehicles could accelerate the development of the market. Read Gupta’s piece now.
Sponsored by Tideline: Integrity through Verification
The Year of Impact Assurance. More than 80 investment firms have signed on to the International Finance Corp.’s “Operating Principles for Impact Management.” The principles respond to the question Tideline hears most often: “How, precisely, do we integrate impact into our investment decision-making processes?” The first eight principles call on investors to define impact objectives, monitor progress and consider the impact of exits. The real game-changer is the ninth principle, which requires independent verification and annual disclosure of signatories’ alignment with the principles. That solidifies the market’s response to the risks of “impact washing.” Tideline’s purpose-built methodology assesses firms’ impact management systems for compliance, quality and depth.
- Read Tideline’s white paper, Integrity through Verification.
Dealflow: Follow the Money
Memphis Meats hauls in $161 million to ramp production of cultured meat. The Berkeley, Calif.-based company is one of 30 or so startups racing to perfect “clean” protein grown in labs from cultured cells. It will use the funding to build a plant in the Bay Area to produce lab-grown chicken, duck and beef and will triple its headcount. The Series B financing was led by SoftBank Group, Norwest and Temasek, and included high-profile investors like Bill Gates, Richard Branson and Kimball Musk, and food giants Tyson Foods and Cargill. Venture funds Fifty Years and CPT Capital also joined. Lab-grown protein is coming, but Memphis Meats and its rivals face hurdles including high costs of production, customer acceptance and regulatory uncertainty.
- Alt-protein. Cultured meat using “precision fermentation” differs from plant-based meat alternatives like Beyond Meat and Impossible Foods; it’s real meat, minus the animals, and promises to be even more climate-friendly (see, “Investors rush to alternative meats and healthy eating accelerates the disruption of food systems”).
- Disrupting cows. A report by RethinkX calls lab-grown protein “the deepest, fastest, most consequential disruption in food and agricultural production since the first domestication of plants and animals.” The think tank predicts that cultured proteins will be five times cheaper than animal proteins by 2030. That means the number of cows in the U.S. will fall by half, and their greenhouse gas emissions will drop by 60%.
- Tuck in.
Twin Cities-based Civic Eagle wraps up $1.3 million funding round. The Black-led startup will use the funds to build out its Enview legislation-tracking software. Customers include Comcast, Chan Zuckerberg Initiative and Fair Fight. The seed round was led by M25 Ventures and included The Syndicate Fund, Incite Ventures, ffVC and PurposeBuilt Ventures. Civic Eagle previously raised pre-seed capital from investors such as Backstage Capital, Camelback Ventures and TechStars.
JPMorgan creates a “development finance institution” to focus on emerging markets and Sustainable Development Goals. The new unit, headed by Faheen Allibhoy, pulls together the bank’s existing development finance efforts and expects to finance more than $100 billion annually in development.
Signals: Ahead of the Curve
China ban spurs circular economy for plastics. Any remake of The Graduate would have to update the career advice famously imparted to Dustin Hoffman in the 1967 film classic to… “sustainable plastic.” Plastic, the wonder material of the last century, is this century’s environmental nightmare. Much of the world’s plastic bags, wrappers, containers and toys ends up in landfills or oceans. Almost 18 billion pounds of plastic are dumped into oceans each year; that’s the equivalent of nearly 57,000 blue whales, says Conservation International. At this rate, ocean plastic will outweigh all of the ocean’s fish by 2050. China is taking the lead in pushing nations to deal with their plastics problems. Two years after it stopped accepting the world’s plastic waste, China this week announced a ban on non-degradable plastic bags, straws and single-use plastics beginning as soon as this year.
- Starbucks’s venti-size challenge. The java giant will shift from single-use to reusable plastics, cut global packaging waste in half by 2030, and join the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment. Last month, Starbucks’s smaller rival Blue Bottle said it would aim to eliminate disposable single-use cups by the end of the year.
- Alt-plastic. New York-based Loliware, which makes seaweed-based materials to replace plastics, raised $6 million, led by Hatzimemos/Libby. Its first product is a kelp-based straw. Next up: cups and utensils. Other investors in the seed round include New York Ventures, Magic Hour, For Good VC, Geekdom Fund, HumanCo VC, CityRock and Closed Loop Partners.
- Renewable packaging. Nestle earlier this week earmarked $258 million for investments in renewable packaging companies, part of its commitment to use 100% recyclable or reusable packaging by 2025.
- Asian funding gap. Indonesia, among the 19 Asian nations responsible for more than 80% of plastic waste in oceans, plans to end plastic pollution by 2040. Circulate Capital’s Rob Kaplan says plugging a $5 billion funding gap in five Asian nations could nearly halve plastic waste flow into oceans. In December, the firm announced a first close of its $106 million Circulate Capital Ocean Fund (see, “Catalyzing capital to prevent plastic waste”).
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Agents of Impact: Follow the Talent
Robynn Steffen, ex- of Omidyar Network, joins the Climate Leadership Initiative as vice president and chief operating officer. The initiative is recruiting a director of operations in San Francisco… Khan Academy is looking for a chief academic officer in Mountain View, Calif… Global Partnerships’ Social Venture Fund is hiring an investment analyst in Nairobi… Mastercardseeks a manager of social impact in Jakarta… Village Capital is looking for an investment analyst in Mexico City… Sorenson Impact Center’s Winter Innovation Summit, Feb. 5-7 in Salt Lake City, brings together funders, nonprofits, policymakers, and social entrepreneurs. ImpactAlpha subscribers get 40% off with the code IMPACT-ALPHA.
Thank you for reading.
– Jan. 23, 2020