The Brief | March 24, 2022

The Brief: Bridge loans in unstable environments, gender equity in healthcare, institutional impact in the Netherlands, risk appetites in development finance

The team at


Greetings, Agents of Impact!

Featured: Political Risk 

How Open Road helps providers of essential services carry on in conflict zones. In Syria, where hundreds of thousands of people have been killed in a decade-long civil war, an advance warning system has sometimes meant the difference between life and death. Hala Systems, a U.S.-based social enterprise, combines a network of civilian spotters with AI-based software and a mobile app to warn of potential airstrikes, giving residents a crucial seven to 10 minutes to take cover. The system reduced casualties in Syria by 25%, according to one analysis. Hala is now deploying its civilian intelligence system in Ukraine. “We are working literally 24/7 across our team and with folks on the ground in Ukraine,” Hala Systems’ Dave Levin tells ImpactAlpha. “We are doing nothing else.” Hala might not be in a position to provide its urgently needed services had it not been for support from Open Road Alliance, which specializes in short-term bridge loans to help social enterprises get through tough patches. 

In its 10 years of existence, Open Road has loaned $50 million to 110 social enterprises (see, “Short-term loans are a safety net as social enterprises face an ‘unexpected OMG moment’”). War, however, is too risky even for Open Road. “A bridge still has to be a bridge to somewhere,” says Open Road’s Maya Winkelstein. Open Road made two bridge loans to Hala, the first to help keep the company afloat while it awaited capital from investors, and a second to provide immediate funds while Hala awaited reimbursement from the E.U. A bridge loan to Access Afya helped the Kenyan healthcare clinic operator get through an initial drop in revenue when the COVID pandemic hit. Open Road made loans to Nuru in the Democratic Republic of the Congo, home to one of the world’s longest armed conflicts, while the solar provider awaited funding from a development finance institution. “At the end of the day, it’s the long-term government investors that can take on the political risk,” says Open Road’s Caroline Bressan, “and the private investors that can help them get to those big injections of capital.” 

  • Keep reading, “How Open Road helps providers of essential services carry on in conflict zones,”  by Amy Cortese on ImpactAlpha.
  • Next week’s Call: Political risk and impact investing. Join Open Road Alliance’s Caroline Bressan, Daniel Kozlov of Moscow and San Francisco-based Global Venture Alliance, Media Development Investment Fund’s Harlan Mandel, and other Agents of Impact for a timely discussion on impact investing in challenging environments, Tuesday, Mar. 29 at 10am PT / 1pm ET / 6pm London. RSVP today.

Dealflow: Investing in Health

SteelSky Ventures raises $47 million to back women’s health ventures. Female founders in the U.S. receive less than 2% of venture capital. Women-led health ventures saw even less, says Maria Velissaris, who founded Atlanta-based SteelSky in 2017 to support female healthcare company founders tackling women’s health inequalities. “SteelSky invests in companies that are improving the way women access and engage with our healthcare system,” Velissaris told ImpactAlpha. “Our goal is to increase the amount of innovation in the women’s health sector, and as a result, build better healthcare solutions for women around the world.” Velissaris says SteelSky is the largest venture capital fund focused on women’s healthcare, with $72 million in assets under management.

  • Women’s health. SteelSky will write checks as big as $3 million for up to 25 companies delivering medical devices, digital healthcare and pharmacy services, and retail therapeutics. Investors in the fund include Bank of America, JPMorgan Chase, Motley Fool Ventures and Blue Shield of California, as well as Eli Lilly and the American Hospital Association, which at the start of this year backed Jumpstart Nova to invest in Black healthcare founders.
  • Portfolio companies. SteelSky has backed ConcertoCare, which is helping seniors age in place; Zipline, a drone-delivery company transporting medicine and medical products to rural communities; and Cabaya Care’s home-based maternal health services. The venture firm says its portfolio companies have provided access to health services for 40 million people in underrepresented communities.
  • Dig in

Tikehau Capital’s impact debt fund secures $110 million from Dutch pension fund. The allocation is part of Pensioenfonds Detailhandel’s commitment to invest 1% of its assets via three impact fund managers. Tikehau’s impact lending fund will invest the capital primarily in small and medium-sized enterprises in Europe to help advance a more inclusive and sustainable economy. Paris-based Tikehau said the fund had raised more than $300 million by the end of last year.

  • Impact management. The pension fund selected Tikehau for its “impact investing credentials, in addition to their in-depth understanding of the European market,” said Pensioenfonds Detailhandel’s Henk Groot. “Investing our capital with a socially-responsible approach, while generating long-term value, is central to our investment principles and decision-making.” The $40.7 billion pension fund’s first first investment was in Polestar Capital’s circular economy debt fund. Pensioenfonds Detailhandel expects to announce its third impact allocation next month.
  • Climate finance. Tikehau, which managed $37.8 billion as of the end of 2021, last year raised $300 million for a private equity fund focused on North American businesses supporting the transition to a low-carbon economy. Tikehau recently opened an office in Tel Aviv, led by Asaf Gherman and Rudy Neuhof.
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Dealflow overflow. Other investment news crossing our desks:

  • Impact Engine secures $34.2 million for its second private equity fund, which is looking to raise $150 million. The women-led impact investor raised $31 million for its first private-equity fund in 2020.
  • India-based Aquaconnect raises $8 million in debt funding to help fish and shrimp farmers manage their farms, reach customers and access credit and insurance.
  • LISC says it has deployed $122 million of its $250 million Black Economic Development Fund in investments for Black-owned banks and businesses in the U.S.
  • Reach Capital, which last year raised $165 million for an impact edtech fund, backs Stellic to help college students navigate degree requirements.

Signals: Catalytic Capital

Risk-averse development finance institutions are more often catalyzed than catalytic. Work the room at any global development or impact investing conference and you’ll hear grumblings about how development financial institutions shun risks in emerging markets. DFIs, as the quasi-governmental investors are known, insist on standard commercial terms in three-quarters of the blended-finance deals in which they participate, according to a new report from Convergence. In just 25% of deals do DFIs accept concessions in order to “crowd in” commercial investors. That is, rather than being catalytic, DFIs have mostly been catalyzed by risk capital from aid agencies or foundations. “There’s definitely scope to take on more risk,” Convergence’s Ayesha Bery told ImpactAlpha. The report, How DFIs deploy catalytic capital,” showed a DFI preference for low-risk senior debt. “Why not be subordinate, or even first-loss, and take on even more risks” in order to bring in more private capital, asked Bery.

  • Exceptions to the rule. DFIs do deploy around $1.6 billion a year in catalytic capital on concessional terms, leveraging four times that amount in private capital. Most of that catalytic capital flows to deals in lower-income countries. The MASSIF Fund, managed by Dutch development bank FMO, for example, has committed more than €545 million ($600 million) in loans, equity, mezzanine debt and guarantees to support micro and small enterprises in emerging and frontier markets. IDB Invest provides catalytic funding for climate mitigation and adaptation projects in Latin America through two IDB Canadian Climate funds totaling C$473 million (US$378 Million).
  • Beyond blending. DFIs also deploy catalytic capital outside of blended finance. The U.K.’s CDC Group, for example, through its MedAccess strategy, uses volume guarantees to make medicines more accessible in poor countries (see, “How CDC Group is innovating with catalytic capital”). The IFC’s Scaling Solar Programme promotes utility-scale solar power in Africa and South Asia with capacity building, tendering, financing, insurance and credit enhancement.
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Agents of Impact: Follow the Talent

Zeke Hausfather, ex- of The Breakthrough Institute, joins Stripe as climate research lead… EcoTrust’s Amrita Vatsal, Vibrant Future’s Robin Wang, and Georgette Wong of Correlation Consulting join the investment and audit committee at The Russell Family Foundation… Aqua-Spark’s head of dealflow, Tom Prins, takes the helm of the firm’s new Bangkok office… Shift Capital is hiring a senior vice president of asset management in Newark, N.J.

Catena Group seeks a director of finance and accounting in Marin, Calif… Women’s World Banking Asset Management selects DealCloud to support its pipeline and portfolio management, investor relations and reporting… South Pole is hosting “Carbon removals: an exciting hidden investment opportunity,” Thursday, Mar. 31… The WILD Network is hosting the 2022 Women in Global Development Leadership Forum, May 16-19.

Thank you for your impact.

– Mar. 24, 2022