The Brief: Building family wealth and community ownership in Portland

Greetings Agents of Impact!

In today’s Brief:

• Building family wealth and community ownership
• Whole-family mental health service
• Banking small business in Ghana
• Rooting out forced labor to mitigate investment risk

Featured: Ownership Economy

This strip mall in Portland is helping neighborhood families build wealth and community ownership. Nearly 350 lower-middle-class residents in southeast Portland have a small slice of the upside appreciation of Plaza 122. The well-kept strip mall in the city’s Centennial neighborhood houses a Latina-owned hair salon, a Somali community organization, an African holistic health nonprofit, an Ethiopian and Eritrean cultural center, a food cart, and a taxi company. Neighborhood families have drawn money from their incomes and savings to invest $767,000, and now own roughly 36% of the 29,000-square-foot, single-story property. Residents can buy into the East Portland Community Investment Trust for as little as $10 a month and receive dividends. More than 120 families have cashed out stakes totaling $310,000. Mohammad Khalid, a 27-year-old immigrant from Iraq, liquidated his stake two years ago to open a traditional Iraqi bakery with his cousins. He had been investing $50 a month since 2020. “I was like, ‘Okay, I have a good amount of money in the CIT, so why not cash out for now to be able to start my business?” Khalid tells ImpactAlpha. 

• Anti-displacement. Community trusts are one way to cut long-term residents into appreciating property values in their neighborhoods, making them beneficiaries, not victims, of rising real estate prices. The community ownership model has been touted as an effective anti-gentrification and anti-displacement strategy by giving locals power and ownership of commercial assets. “We really want to connect with neighborhoods to see the power of generating wealth locally in a way that’s not extractive,” says Mercy Corps’ John Haines. “People are making a great return on their investment, and it’s risk free. It’s kind of wild, but it’s working.”
  
• Loss protection. Mercy Corps Northwest, a nonprofit community development financial institution and local affiliate of the Portland-based humanitarian aid group, bought the acre-and-a-half strip mall in 2017 for $1.2 million. Today it is valued at nearly $2.2 million. Mercy Corps Northwest and two impact investors put up the down payment, and Beneficial State Bank provided a $900,000 loan to cover the mortgage. Community investors, who invest an average of $80 per month, have loss protection and the ability to exit their investments at any time. The share price goes up as the plaza’s value increases; should the value decline, community investors are protected under a “direct pay letter of credit” from Northwest Bank. “All the investors are assured that it’ll draw on the direct payload of credit if we don’t have liquidity ourselves,” Haines says. “It always protects investors from loss anytime, and people can cash out anytime they want for whatever reason.”
  
• Replicable models. Haines is taking the community investment trust model to other US cities this year, starting with Omaha, Neb.; Albany, NY; Tulsa, Okla.; and Dallas. Other models include San Francisco-based Community Vision, which this year is looking to deploy more than $40 million in community land trusts and other community ownership initiatives in California’s low-income neighborhoods and communities of color. In Boston, Trust Neighborhoods formed a partnership to acquire a $47 million portfolio of 36 multifamily properties as affordable housing for local residents. In Chicago and Baltimore, Lyneir Richardson’s TREND Real Estate Fund is co-investing with local residents in neighborhood shopping centers. And on the east side of Kansas City, Mo., Local Code is buying back a block of affordable and workforce housing, retail, and health and wellness centers, to be placed in the hands of local residents. “Real estate ownership is an anti-gentrification tool that builds power in communities – both political power and financial power,” says Community Vision’s Catherine Howard.
  
• Keep reading, “This strip mall in Portland is helping neighborhood families build wealth and community ownership,” by Roodgally Senatus on ImpactAlpha.

Dealflow: Healthy Youth

Little Otter snags $9.5 million to expand access to mental health for children and their families. The San Francisco-based startup offers a mental health package that prioritizes the mental wellbeing of each family member, from toddlers to teenagers to parents. Little Otter says its team of therapists, psychiatrists and parenting specialists last year delivered more than 56,000 virtual sessions, addressing mental health issues including prenatal and postpartum wellbeing, marital conflict, parent-child relationships, LGBTQ identity and self-harm. Customers reported mental health improvements in just six sessions. “By focusing on families as a whole, they are delivering the kind of mental health care that is long overdue,” said Carrie Walton Penner of Fiore Ventures, an investor in Little Otter’s new round. “Their ability to blend AI-driven personalization with human-centered care is a game changer.” 

• Youth mental health. Little Otter’s online service is available under Medicaid and commercial insurance plans in 15 US states, including New York, California, Pennsylvania and Colorado. “Today’s young people face unprecedented challenges that demand a fresh perspective on mental healthcare,” said Erin Harkless Moore of Pivotal Ventures, which joined the round alongside Torch Capital, Springbank, CRV, Next Legacy, G9 and Gratitude Railroad. Little Otter has raised $36 million since 2020. The woman-led company saw a 2.5x revenue growth last year.
  
• Check it out. 

Ghana-based Affinity raises $8 million to bank individuals and small businesses. Fintech companies often launch with a core product – small lines of credit, savings, mobile wallets – and build on as they add customers. Affinity launched in October with a full range of financial services for Ghana’s underbanked individuals, entrepreneurs and small businesses, including savings accounts, small business accounts, payment services, money transfers, credit, loans, investments and mobile money wallets. The Accra-based company says it has enrolled 50,000 customers, two-thirds of whom have never had a formal bank account, through its hybrid online and agent-based model. More than 60% of its customers are women who work in the informal economy. Affinity secured $8 million in a seed equity round, led by German VC firm Grazia Equity and London-based Backed VC, to develop its pan-African expansion strategy. Finca International, Renew Capital, Launch Africa, Enza Capital and Impact Assets also participated.

• Moving the needle. A 2018 report from International Finance Corp. pegged Africa’s small business financing gap at about $330 billion. “Numbers like Africa’s $331 billion credit gap are still being quoted today,” Affinity founder Tarek Mouganie told TechCrunch. The fees for accounts and services charged by traditional banks have been a barrier for many individuals and small businesses. “That made me obsessed with building a full-fledged retail bank for [micro and small businesses], similar to what Santander, Lloyds, or Chase Bank offer in Europe and the US, but tailored for Africa’s majority,” Mouganie said. Affinity doesn’t charge fees on its accounts or on most transactions. The company secured a Savings and Loans license from the Bank of Ghana in 2022.
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Belgium’s Junction Growth Investors’ raise exceeds first fund target to support growth-stage energy transition companies. The Antwerp-based investment firm launched in 2022 to help Europe’s budding climate tech startup ecosystem access growth capital while supporting the continent’s low-carbon energy transition. Junction Growth Investors raised €115 million ($119 million) from the European Investment Fund, BNP Paribas, the Belgian Growth Fund, as well as a number of family offices and entrepreneurs. It says it surpassed its €100 million target – no small feat for a first-time fund manager in a difficult fundraising environment (see, The List).

• Shifting energy dependency. EU countries are under pressure to slash consumption of natural gas, much of which is imported from outside of the economic bloc. “The energy transition is not solely about combating climate change,” said Junction’s Dirk Dewals, reflecting a new narrative favored by many cleantech investors. “It also presents a pivotal opportunity for Europe to reduce its dependence on geopolitically sensitive carbon fuels and to build a couple of European technology leaders with global reach.” Junction led a Series C round for Belgian high-voltage grid monitoring software company Ampacimon, and for Portuguese low-voltage grid software provider Eneida. Belgium-based Solara installs commercial and industrial solar and battery storage systems in Northern Europe. Junction invests up to €15 million per deal, and has closed seven deals so far for its fund.
  
• Check it out.

Dealflow overflow. Investment news crossing our desks:

• Minnesota-based 75F raised $45 million from Accurant International’s Net Zero Alliance, Climate Investment, Breakthrough Energy Ventures and others. Its sensors and software are designed to help commercial building operators in the US and Asia automate their HVAC systems to improve the energy efficiency of their properties. (75F)
  
• IDB Invest and Corporación Financiera de Desarrollo provided $100 million to BBVA Perú to support lending to women-led micro and small businesses in Peru. (IDB Invest)
  
• The European Bank for Reconstruction and Development invested €38.4 million ($39.9 million) in a green bond to ONCF to help the Moroccan rail operator upgrade and electrify its network. (EBRD)
  
• San Francisco-based Tyba raised $13.9 million from Energize Capital, Pear VC, Mobilize Climate Capital, Borusan Ventures and other investors for software that helps energy producers with battery storage facilities forecast energy supplies and demands. (Tyba)

Impact Voices: Sustainable Fashion

Investors are essential to rooting out forced labor in global supply chains. Some 27 million people around the globe are pressed into forced labor and subject to exploitative practices including recruitment fees, threats, fines, restricted movement and retention of identity documents. Many toil away in the sprawling supply chains of well-known brands and retailers, often without those companies’ awareness. The nonprofit investigative group Transparentem was founded a decade ago to identify forced labor and other human rights and environmental abuses in global supply chains. “Our goal has always been to ally with workers and communities to accelerate that transparency and catalyze reform,” Benjamin Skinner, a former journalist and Transparentem’s founder, writes in a guest post. With investigations from Bangladesh to Mauritius, Transparentem has succeeded in getting brands and their suppliers to reimburse workers some $5 million for recruitment fees they paid to secure their jobs and reclaim identity documents. 

• Material risk. Transparentem’s latest investigation encountered workers in Taiwan’s textile factories who told of employers “locking people up like animals” and of becoming indebted. Most of the abuses came not in first-tier suppliers of brands, but sub-suppliers. “Goods made with such upstream forced labor are equally subject to import prohibitions,” says Skinner. “The onus to find and remedy abuse is on brands, retailers – and their investors.” Actions investors can take: Map portfolios to identify where low-wage migrants work in company operations or supply chains. And push portfolio companies to publicly disclose the results of their “social audits,” good or bad. Says Skinner, “Forced labor is not simply an ‘ESG’ issue – it is a material risk.”
  
• Keep reading, “Investors are essential to rooting out forced labor in global supply chains,” by Transparentum’s Benjamin Skinner. Cordes Foundation sponsors ImpactAlpha’s coverage of Sustainable Fashion.

Agents of Impact: Follow the Talent

Ninety One appoints Samantha Cleyn, previously with BMO Global Asset Management, as head of its institutional division in Canada… BMO Commercial Bank welcomes Taylor Sekhon, previously with Social Capital Partners, as employee ownership managing director… The city of Durham, NC’s Office of Economic and Workforce Development seeks a new director to replace Andre Pettigrew, who is leaving the role after nearly eight years.

World Resources Institute is recruiting an urban development communications manager in Washington, DC… Climate Emergency Collaboration Group has an opening for an investment program manager… Broadstreet Impact Services seeks a senior impact analyst… Blue Meridian Partners is hiring a portfolio associate for its Place Matters initiative.

Ocean Community Empowerment and Nature, backed by the UK government’s £500 million ($622 million) Blue Planet Fund, is accepting grant applications from organizations with solutions for marine conservation and poverty alleviation in emerging markets… As You Sow will host a webinar on Thursday, Feb. 20, for the release of its “Clean200” report, which features 200 global companies leading the clean energy transition. 

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– Feb. 12, 2025