Greetings, Agents of Impact!
Agents of Impact Call: The Reconstruction This Time. The historic Reconstruction resonates in today’s efforts to expand voting rights, empower stakeholders and establish multi-racial prosperity. Melissa Bradley of 1863 Ventures, ImpactAlpha’s Monique Aiken, Bill Fletcher Jr., ex- of TransAfrica Forum, and playwright Gene Bruskin join Call No. 36 to take a cut at The Reconstruction This Time, Tuesday, Dec. 14 at 10am PT / 1pm ET. RSVP now.
- 🎥 Special showing. In advance of The Call, ImpactAlpha subscribers are invited to watch an abridged version of the play, The Moment Was Now (for background, see “Retelling the history of the past to change the story of the future“).
Featured: Corporate Accountability
Three ways climate-committed shareholders can flex their power in 2022. While too many global investment firms filled the halls of COP26 in Glasgow with hot air, early-movers in shareholder action were finding new ways to confront the roots of the climate crisis: corporate strategies that sacrifice long-term sustainability for short-term gain. These leading investors know that more dialogue and disclosures will not be enough to mitigate the escalating risks that climate change poses to long-term portfolios and to the global financial system itself, Majority Action’s Eli Kasargod-Staub writes in a guest post. “Shareholders collectively have the power to demand that corporate directors take immediate and comprehensive action to lead their companies toward true net-zero pathways – or vote them out and replace them with leaders who will,” he says. A growing cadre of investors are stepping up to do exactly that in next year’s proxy season.
Kasargod-Staub is pushing to build a “multi-movement engine” of workers, students, citizens and grassroots activists to push asset managers to hold corporate directors accountable (as part of the New Capitalism Project, Kasargod-Staub outlined the effort on last week’s Agents of Impact call). In the meantime, climate-committed shareholders can use their proxy votes to hold directors accountable for systemic climate risk, as the treasurers of Massachusetts, Illinois, Connecticut and Vermont are moving to do. Shareholders can also press proxy advisors, like ISS, to overhaul how they evaluate board directors at climate-critical companies. Last month, investors with over $2.2 trillion in assets challenged ISS, the world’s largest proxy advisor, over its support for board members of high-emitting companies not aligned to a 1.5-degree Celsius pathway. And shareholders can press the biggest asset managers – BlackRock, State Street and Vanguard – to oust directors that fail to align their companies to such pathways. Majority Action’s analysis, “Climate in the Boardroom 2021,” demonstrated that these large firms overwhelmingly backed incumbent directors in oil and gas, electric power and banking. The Big Three asset managers vote more than 25% of all the shares in the S&P 500. If clients demand that they use their voting power to preserve our future, Kasargod-Staub says, “then shareholder season in 2022 could be transformational.”
Keep reading, “Three ways climate-committed shareholders can flex their power in 2022” by Eli Kasargod-Staub on ImpactAlpha.
Dealflow: Returns on Inclusion
Secondaries fund secures $11.5 million to create a market for CDFI loans. Community lenders can expand their “microlending” capacity by selling some of the small loans on their books (for background, see “Entrepreneur Backed Assets Fund aims to provide liquidity for community lenders”). “Microloans are indispensable in meeting the credit needs of entrepreneurs of color and women entrepreneurs,” said Joyce Klein of Aspen Institute, which launched the Entrepreneur Backed Assets Fund with the Microfinance Impact Collaborative. Among the fund’s backers: Wells Fargo, Colorado Health Foundation, Annie E. Casey Foundation and Truist Bank.
- Purchase commitments. Western Alliance Bank, bank holding company HTLF and Byline Bank committed to purchase $6 million in loans from the fund by next year. The fund expects to have sold loans to 10 banks by the end of this year. Of the loans sold to date, nearly three-quarters went to entrepreneurs of color, 44% to women and 78% to entrepreneurs in low-income communities.
- Dig in.
Gozem raises $5 million for a ‘super app’ for Africa’s taxi drivers. “Digitize everything” is the theme of the year in emerging markets. Togo-based Gozem is aiming to be a “super app” for taxi, delivery and ride-hailing drivers in francophone African countries. It serves as a ride-hailing service, a transport and logistics service, and a lease-to-own asset financier. The company’s goal is to increase drivers’ income by sending them more passengers and delivery trips, said Gozem’s Gregory Costamagna. “We also reduce their cost of operation through asset financing because they have no formal alternative; it’s generally informal and expensive.”
- One-stop shop. Gozem works in 13 cities in Togo, Gabon and Cameroon. Its Series A financing will help it expand its digital financial services, a key characteristic for a super app (for background, see “How technology is disrupting small-business financing in emerging markets – in a good way“).
- Read on.
Republic buys U.K. equity crowdfunding platform Seedrs. London-based Seedrs, one of the world’s first regulated equity crowdfunding platforms, has channeled £1.5 billion ($2 billion) to startups since 2009. U.S.-based Republic said it bought Seedrs “to advance our mission to democratize private investment globally.” Seedrs is seeking a license in Ireland as a gateway to all 27 countries in the E.U., which has adopted new equity crowdfunding regulations. The $100 million acquisition follows Republic’s $150 million Series B funding round in October. The deal will make Republic’s other investment offerings in crypto, real estate and gaming accessible to European investors, while giving Republic’s investors access to Seedrs’ secondary market. Check it out.
Dealflow overflow. Other investment news crossing our desks:
- Media Development Investment Fund invests in Nigeria-based media and data analytics company Dataphyte and Mozambique-based investigative news site Zitamar News.
- Northwest Mutual and Bank of America back Black Operator Ventures to make early-stage investments in Black-led startups.
- India-based CanvaLoop Fibre raises a pre-seed round to convert agricultural waste into textile fibers.
Podcast: Gender Smart
A global bio fund is centering women to drive equity and returns (podcast). Growing up in an unequal society in India prepared Ipshita Mandal-Johnson to overcome limitations. With a new life sciences fund, Mandal-Johnson is again going beyond what has historically been possible. She and co-founder Giorgio Reggiani are investing their Global Bio Fund exclusively in women-led bio startups with solutions in health and wellbeing, food and agriculture, and energy and environment. Women-led companies generate more revenue with less capital and higher investment rates of return than male-founded firms. “Women also tend to be more involved in making sure that they have good impact,” says Reggiani. The real question: “Why are you not investing in women entrepreneurs?”
In a year when the pandemic spurred investment in healthcare startups, venture funding for female-founded healthcare startups actually fell. Mandal-Johnson has seen inequality at the interaction of health, science and tech in the U.K., Kenya and New Zealand, as well as in the U.S. and India. Growing up in apartheid South Africa, Reggiani saw systems designed to make people fail. Mandal-Johnson and Reggiani joined The Reconstruction podcast to talk about global health equity and their fund, which is aiming to raise $100 million. “I never actually wanted to kick off an investment fund,” Mandal-Johnson told host Monique Aiken. “When you don’t see someone else solving a problem, you go ahead and say, ‘Why don’t I go into it myself?’”
- Keep reading. “A global bio fund is centering women founders and customers to drive equity and returns (podcast),” by Dennis Price on ImpactAlpha.
- Listen to Monique’s full conversation with Ipshita Mandal-Johnson and Giorgio Reggiani. Catch up on earlier episodes of The Reconstruction podcast and all of ImpactAlpha’s coverage at The Reconstruction.
Agents of Impact: Follow the Talent
Kimberly Osagie, ex- of Promise54, joins Echoing Green as vice president of programs… Rob Tashima steps down as chief growth officer at Village Capital to join Draper Richards Kaplan Foundation as a senior director of pipeline and partnerships. Village Capital is recruiting for Tashima’s replacement… Blue Forest is hiring an investment associate… Serena Ventures is looking for an associate in San Francisco.
Kresge Foundation seeks a portfolio manager for its social investing team… FMO and the Collaborative for Frontier Finance partner to recruit, train, and support women and other underrepresented capital allocators in early-stage venture capital ecosystems across Africa… Startup Basecamp is recruiting global climate startups for its Future of Climate Tech GLOBAL Startup Competition.
Thank you for your impact.
– Dec. 6, 2021