Greetings, Agents of Impact!
Featured: Carbon Tech
How climate investors are getting ready for the carbon removal boom. In the face of the gathering climate threat, the latest Intergovernmental Panel on Climate Change report strikes a decidedly ‘can-do’ attitude. Global greenhouse gas emissions must peak by 2025 as fossil fuels are rapidly scaled down. And carbon removal technologies, as well as natural solutions, will be necessary to make up for hard-to-abate activities and achieve net-zero greenhouse gas emissions. Global temperature increases are virtually certain to surpass 1.5 degrees Celsius from pre-industrial levels, the report warns. Carbon removal may be the only way to bring them back down. But while costs for solar energy and battery storage fell by 85% between 2010 and 2019, and wind energy by 55%, technology to directly suck carbon out of the air is still nascent, expensive and energy-intensive. The International Energy Agency estimates that direct air capture could remove more than 85 million metric tons by 2030 under its net-zero scenario. Reality check: The world’s 19 current direct air capture facilities currently remove just 10,000 metric tons per year.
A host of startups developing cheaper and more efficient ways to remove carbon from the air are finding a warm reception from investors. San Francisco-based Heirloom Carbon Technologies relies on the natural carbon-absorbing properties of limestone to suck carbon out of the air. Woburn, Mass.-based Verdox has developed a specialized battery that absorbs carbon as it charges. Carbon Collect Limited, based in Dublin, is building mechanical trees it says are 1,000 times more efficient than natural trees at removing CO2 from the atmosphere. Nova Scotia-based Planetary Technologies adds alkalinity to the ocean to help it store carbon for thousands of years. The direct-air capture pioneer Climeworks has fetched $600 or more per ton of carbon. It has raised a fresh $650 million from investors. Later this month, Elon Musk’s Carbon Removal XPrize will announce the winners of its $100 million competition for pulling carbon from the air or oceans. A different approach, carbon capture storage and utilization, or CCSU, captures emissions from smokestacks or other points of release for burial underground or use as an input for everything from cement to vodka. Irony alert: The biggest customers for captured carbon are oil and gas companies, which inject it into wells – to help pump out more of fossil fuels.
- Keep reading, “How climate investors are getting ready for the carbon removal boom,” by Amy Cortese on ImpactAlpha.
Dealflow: Gender Alpha
Women’s World Banking raises $103 million to invest in women’s financial inclusion. The New York-based nonprofit’s second fund will invest in providers of inclusive financial services in emerging markets that focus on women as customers and employees. The fund has made five investments, including Kenyan farmers’ insurance startup Pula; Colombian community lender Aflore; and Sitara, which offers mortgage finance for low-income households in India. Women’s World Bank Asset Management will manage the fund, which has been approved as a 2X Flagship Fund (see “Development financiers seek to hook private investors on gender-lens investing”). Another 2X Flagship Fund, Singapore’s Insitor Impact Asia Fund, last month raised $42 million.
- Catalytic capital. The European Union and Germany’s Ministry for Economic Cooperation and Development provided first-loss capital and funding for technical assistance for portfolio companies to meet gender-lens objectives. The Women’s World Banking fund secured commitments from European Investment Bank, Soros Economic Development Fund, DFC, KfW and other impact and institutional investors. The Visa Foundation provided a $20 million grant to Women’s World Banking in 2017.
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HealthQuad raises $162 million for health tech startups in India. The COVID crisis accelerated the digitalization of health services for India’s underserved rural population. New Delhi-based HealthQuad, which aims to increase healthcare affordability and accessibility in India, raised its second fund to invest in digital health services. More than $60 million has already been invested in companies such as online medical supplies platform Medikabazaar, healthcare financing platform ImpactGuru, and HealthifyMe, a wellness app that provides nutrition and fitness advice.
- Digital health. The fund will invest in up to 15 companies with “potential to generate value as well as achieve deep social impact,” according to HealthQuad. Investors include TIAA, Ackermans & van Haaren, Quadria Capital and development financial institutions Swedfund and British International Investment (formerly CDC Group).
- Check it out.
Dealflow overflow. Other investment news crossing our desks:
- Manifest Climate scores $24 million in a financing round led by the Business Development Bank of Canada and Climate Innovation Capital to help companies manage environmental risk.
- Colombia’s Leal raises $10 million to provide cash-back rewards for Latin American consumers to use on essential goods and services.
- LEVY Health, a woman-led health tech venture in Germany, snags €2.5 million ($2.8 million) to develop products to help women facing infertility.
Impact Voices: Investing in Health
Why Kenyan nonprofit Jacaranda Health spun out its hospital as a social venture. Founded to close the gap in quality, accessible maternity care, Jacaranda Health was at a crossroads. After five years of running a busy hospital on the outskirts of Nairobi, the nonprofit was providing maternal healthcare to thousands of mothers. To continue to grow, “We needed to act more like a business and less like a nonprofit,” writes founder Nick Pearson in a post on ImpactAlpha. At the same time, Jacaranda was seeing rapid growth as a technical assistance partner to the government health system. “We saw two paths to choose from, social business maternity venture or government technical partner, and felt that doing both at once could be a recipe for excellence at neither,” Pearson says. With the help of impact investors at Tara Health Foundation, Jacaranda spun out the maternity hospital as a standalone social venture, Jacaranda Maternity.
- Dual tracks. The for-profit hospital reached break-even and raised Series A financing from Swedfund, Africa-Asia Investment & Consulting and Johnson & Johnson Impact Ventures, which sponsors ImpactAlpha’s coverage of Investing in Health. Jacaranda Maternity has served tens of thousands of women at three hospitals in Kenya and plans to open another 10. At the nonprofit Jacaranda Health, a team of 100 is focused on technology innovation, nurse training, data science and impact evaluation in 20 Kenyan counties. “There is a path to achieving health impact through both the private sector and public, but each approach is challenging enough, let alone trying to do it all within a hybrid organization,” Pearson writes.
- Health innovation. Kenya’s Financing Alliance for Health and Noora Health in India and Bangladesh are among the winners of the 2022 Skoll Award for Social Innovation. The Financing Alliance has helped secure more than $200 million for community health workers in a dozen countries. Other Skoll awardees include Oakland-based Common Future (see “Agent of Impact: Rodney Foxworth”), Sao Paulo-based MapBiomas, Rapid City, S.D.-based NDN Collective and NOSSAS in Rio de Janeiro.
- Keep reading, “Why Kenyan nonprofit Jacaranda Health spun out its hospital as a social venture,” by Nick Pearson on ImpactAlpha. Catch up on all of ImpactAlpha’s coverage of Investing in Health.
Agents of Impact: Follow the Talent
Morgan Stanley’s Jamie Martin is named head of the firm’s global sustainable finance team in Europe, the Middle East and Africa… FSG’s Harvey Koh steps down as managing director to become a senior advisor and pursue independent interests… Robyn Luhning is promoted to chief sustainability officer at Wells Fargo… Northern Arc appoints Ashish Mehrotra, ex- of Niva Bupa, as CEO… Enrique Alvarado Hablutzel, ex- of Bamboo Capital Partners, joins Chi Impact Capital as co-founder and managing partner… Hunter Greene, ex- of SVB/Walt Arnold Commercial Real Estate, joins OneTen Capital as general partner.
WEPOWER is hiring a senior digital director, a vice president of development and director of organizing and campaigns… Luminate is recruiting for roles in Sao Paulo, Nairobi, Washington, D.C. and London… Global Innovation Fund seeks an investment analyst on its risk-capital team in London… The Miller Center for Social Entrepreneurship is looking for a director of corporate and foundation relations and a manager of impact investing… Google seeks a manager of net zero carbon, strategy and governance in procurement… Decolonizing Wealth Project is hiring paid summer interns… Pacific Community Ventures seeks a credit underwriter of small business lending and other roles.
Applications are open for the Media Development Investment Fund’s NAMIP Innovation Challenge for Nigerian media… Render Capital opens its annual Render Competition for local early-stage startups in the Greater Louisville, Ky. region… Applications are open for Impact Partners’ PitchFest Series for Asia-Pacific impact enterprises… US SIF will provide support to 10 students to attend the US SIF Annual Conference in June… Neighborhood Economics is hosting “Catalytic capital at a local level,” in Indianapolis, May 3-6.
Thank you for your impact.
– Apr. 5, 2022