Greetings, Agents of Impact!
Featured: Climate + Gender
These fund managers are putting climate + gender strategies into action. It’s early days, but investors are waking up to the outsized impact potential of investing at the intersection of climate action and women’s and girls’ empowerment. A growing crop of fund managers are designing strategies to seize the overlapping opportunities. ImpactAlpha’s Agents of Impact call this week features three such managers (RSVP now). Supply Change Capital, AiiM and MCE Social Capital all are part of the portfolio of Heading for Change, the legacy project of gender lens pioneer Suzanne Biegel and her husband Daniel Maskit (disclosure: Heading for Change is a sponsor of ImpactAlpha’s Climate + Gender coverage).
- Food and culture. “When we think about the people who have historically created our foods and flavors, we think about women and people of color,” says Noramay Cadena of Supply Change Capital, a US-based venture firm focused on food and culture. “We see culture as a gateway to a healthier and more equitable food system.” The firm’s investment angle: how women and diverse founders are rebuilding the food system to be more resilient and sustainable. Supply Change is among more than a dozen funds and organizations featured on ImpactAlpha’s new searchable database of climate + gender lens investors.
- Women-led solutions. Sixty percent of Supply Change’s early portfolio companies are led by women. More than half track climate-related metrics, including greenhouse gas emissions reduction and improved soil health and fresh water supplies. Robigo, a woman of color-led biotech startup, is researching plant microbiomes to design drought and pest-resistant crops. Kadeya makes no-plastic water stations for frontline workers in factories, at construction sites, and other locations. Compound Foods make coffee in a lab, without the beans.
- Gender-lens upside. Woman-led AiiM Partners invests in early growth-stage ventures developing critical climate solutions. More than half of its portfolio companies have female founders, executives or senior management. “I think there are structural reasons,” says AiiM founder Shally Shanker, including “me being the founder, and finding a team that’s diverse to support us in how we handle pipeline.” Shanker says women-led companies are both better deals and better performers. “Historically women-led companies have had lower valuations than some of the ‘hot’ traditional teams,” she explains. “We’re [also] trying to protect the downside. We aren’t looking for the one-star wonders, we are looking for companies that are built to last by making change.”
- Climate + gender spectrum. The nascency of climate + gender investing means interested investors should take a broad view of the landscape, according to the team at Heading for Change. The spectrum of funds ImpactAlpha is tracking include EcoEnterprises, which invests in regenerative agriculture and ecotourism companies in Latin America; Azolla Ventures, which uses blended finance to derisk promising deep tech for decarbonization; and Catalyst Fund, which invests in early-stage tech for climate-vulnerable communities in Africa. All have female general partners.
- Keep reading, “These fund managers are putting climate + gender strategies into action,” by Jessica Pothering on ImpactAlpha.
- Join the call. Cadena and Shanker will join Camilla Nestor of MCE Social Capital, and Samantha Anderson and Rose Maizner from Heading for Change, for our upcoming Agents of Impact Call on tomorrow, Nov. 15, at 10am PT / 1pm ET / 6pm London. RSVP today.
Dealflow: Nature-Based Investing
Manulife raises $225 million to generate carbon credits from sustainably-managed forests. Manulife Investment Management, part of Canadian insurance giant Manulife, is raising a $500 million fund to invest in timberlands that prioritize carbon sequestration over timber production, its first such dedicated fund. “There is strong investor demand in strategies that may help support carbon emissions reductions and net-zero commitments,” said Manulife’s Tom Sarno. Early investors in the Manulife Forest Climate Fund include Japan’s MUFG Bank. The fund will invest in forests that can generate carbon credits with sustainable forest management practices. It will also pursue conservation easements, non-timber income, and limited harvests. Forests and forest products capture and store nearly 15% of fossil fuel-based carbon emissions in the US. Manulife will invest in reforestation and afforestation, or planting trees in areas without tree cover.
- Sustainable real assets. Manulife manages nearly $15 billion in timberland and agriculture assets spanning roughly 5.5 million acres in the US, Canada, New Zealand, Australia, Brazil and Chile. The Forest Climate Fund “is one of the natural climate solutions we have developed to sequester carbon more intensively and drive broader impact,” said Manulife’s Eric Cooperstrom. The fund is classified as an “Article 9” fund for its sustainability objectives under the European Commission’s Sustainable Finance Disclosure Regulation, or SFDR.
Aigen raises $12 million to build solar-powered robots for crop management. Seattle-based Aigen is building a 7,000-square-foot research and development site for solar and wind-powered robots that use AI to navigate, weed and analyze row crops. The goal: to reduce the use of chemicals and fossil fuels in farming operations, and help farmers save time and money. “Agriculture is the intersection of human health and planetary health and that’s why we focused on creating technology for farmers that is both profitable and sustainable,” Aigen’s Kenny Lee said. The company will pilot the robots next April on 20,000 acres of farmland in the US for weed control and real-time farming insights.
- Agrifood investing. “Getting chemicals out of our food is incredibly important for fighting climate change,” said Swati Mylavarapu of Incite, an investor in Aigen’s Series A round. Australian early-stage climate venture fund ReGen Ventures led the round, with participation from Cleveland Avenue, Susquehanna Private Equity Investments and New Enterprise Associates.
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Dealflow overflow. Other investment news crossing our desks:
- Otovo, an online marketplace for residential solar and battery storage installations in Europe, secured €40 million ($43 million) in Series A funding led by Nysno, the Norwegian government’s climate fund. (Otovo)
- German-Brazilian InPlanet clinched €5.6 million ($6 million) in seed financing from Katapult, Carbon Removal Partners and others to remove carbon and regenerate soil through an enhanced rock weathering process. (InPlanet)
- The Case for Her, a women’s health-focused impact fund, backed Saudi Arabia-based Mauj’s $500,000 funding round for women’s sexual wellness in the Middle East. (Femtech Insider)
Impact Voices: Energy Transition
Five ways to supercharge energy retrofits. Energy retrofits can extend the lifespan of buildings, reduce emissions and create jobs. There are no one-size-fits-all solutions. Hefty upfront costs and a shortage of skilled workers present challenges. “Increasing our ‘energy renovation’ rate is vital if we are to reach climate neutrality,” say Arjun Jairaj and Jess Clemans of London-based venture capital firm A/O PropTech, which reached a $100 million first close on its second fund in July. In a guest post on ImpactAlpha, Jairaj and Clemans share five ways that technology can simplify and accelerate the installation of solar panels, heat pumps and other climate-resilient upgrades to housing.
- Smart tech. Not every retrofit measure needs to be a high-ticket item like a heat pump or energy storage system. Insulation is relatively cheap and offers a quick payback. Smart meters, smart thermostats, and other inexpensive devices let homeowners see their energy consumption patterns and measure cost savings. The digital data trail can also unlock financing and ownership through performance-linked contracts and energy savings agreements.
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Agents of Impact: Follow the Talent
Neighborhood Economics, “a national conversation with a local impact” from the founders of SOCAP, is coming to San Antonio, Texas, Feb. 26-28. (Use code NE_PARTNER to save an extra $100.)
The Funders Network promotes Dion Cartwright to president and CEO, effective January… Michael John, ex- of Bridgespan Group, joins Social Finance as an associate… The California Endowment is looking for an impact associate for mission-related investments… Opportunity Finance Network is hiring a chief investment officer… The Norwegian National Advisory Board for Impact Investing is on the hunt for a new CEO… Texas Center for Employee Ownership seeks a program manager in Dallas.
The Federal Reserve Bank of New York will convene impact investors today for a half-day event on creating opportunity-rich neighborhoods… The Rutgers School of Management and Labor Relations will host its annual private equity and employee share ownership symposium virtually, Friday, Nov. 17… Bezos Earth Fund’s Kelly Levin, Helen Mountford of ClimateWorks Foundation, and other speakers will join a webinar on the state of climate action in 2023, happening tomorrow, Nov. 15.
Thank you for your impact!
– Nov. 14, 2023