The Brief | October 9, 2019

The Brief: Crowdfarming local farms, smart emergency response, tracking soil health, The Purpose of Capital musical, Evercare’s new CEO

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Steward’s ‘crowdfarming’ platform lets small investors back good food from local farms. Precision drones and other “ag tech” solutions may be sexier. But a $25,000 loan to buy a tractor or fencing is arguably more critical to the health of the soil and the livelihood of a farmer in Kansas. As Agriculture Secretary Sonny Perdue declared last week, “In America, the big get bigger and the small go out.” Steward, a new investment platform that aims to tap the power of small investors, is part of a counter-narrative that includes growing demand for local, sustainable food and the revival of small farms. “There’s a mismatch between demand for sustainably grown products and the desire to support sustainable farming, and the capital available to farmers,” says Steward’s Dan Miller, a co-founder of Fundrise, who watched agricultural consolidation hit the Chesapeake Bay region where his mother’s family farmed for five generations.

Like Iroquois Valley Farmland’s real estate investment trust, which helps farmers convert farmland to certified organic production, Steward’s REIT takes advantage of Regulation A of the JOBS Act to make farmland investing more broadly accessible. Steward’s loans average $300,000 and carry interest rates of 8% to 10%. That’s higher than taxpayer-subsidized farm loans, but reflect the risks in an economic system that subsidizes industrial-scale food production, Miller says. Steward’s REIT is expected to return at least 6% annually to investors after a 2% loan origination fee and a 1% annual servicing fee. The demand for small farm financing and support, including for sustainably managed forests and fisheries is essentially “unlimited,” Miller says, with $263 billion in farm loans outstanding in the U.S. alone. “The grand vision is actually many small visions,” says Miller. “It’s millions and millions of individuals making change in their own backyards.”

Keep reading, “Steward’s ‘crowdfarming’ platform lets small investors back good food from local farms,” by Amy Cortese on ImpactAlpha. 

Dealflow: Follow the Money

Energy Impact Partners invests $25 million in RapidSOS for emergency response. Natural disasters and large public events are creating a nightmare scenarios for U.S. emergency responders with antiquated infrastructure for coordinating relief and rescues. RapidSOS’ emergency response platform connects emergency responders to smart devices, like cars and wearable medical devices. The platform, which launched last year, is rolling out in New Orleans, where crowded events like Mardi Gras and intensifying climate-related weather pose challenges to emergency personnel. RapidSOS raised $25 million from utility-backed venture capital firm Energy Impact Partners, an extension to its $55 million Series B funding round. Check it out.

Soil Scout closes seed round to monitor and track soil health. Helsinki-based Soil Scout is among a number of “regenerative” tech startups trying to improve the management of soil health with sensor-enabled analytics. Its sensors sit up to 2 meters (6 feet) below ground, yet can transmit data about moisture, salinity and other factors over wireless networks. Soil Scout markets its sensors for sports fields and golf courses, in addition to agriculture, but the company’s founder designed the system with farmers in mind, since land quality can be affected by inadequate irrigation or overuse of fertilizers and pesticides. Swedish outdoor equipment manufacturer Husqvarna Group invested an undisclosed amount of seed funding in the startup. Dig in.

MaRS Catalyst Fund launches C$30 million fund amid rebrand. The Toronto-based impact investor has changed its name to Amplify Capital, and is looking to raise a second seed-stage fund for impact startups. Amplify’s first fund of C$5.8 million ($4.4 million) launched in 2016 and invested in nine companies in Ontario and Quebec.

Welsh development bank commits £2 million for social enterprise lending. The Development Bank of Wales is earmarking the capital from its £16.2 million Wales Micro Loan Fund. Two support organizations, the Wales Council for Voluntary Action and Landsker Business Solutions, will use the funds to make small social enterprise loans.

Komposite raises $500K to test digital clothing production. The Seattle-based company wants to reduce the garment industry’s environmental impact with on-demand manufacturing and printed—rather than dyed—colors and patterns. Its funding follows textile recycling venture Evrnu’s $9 million round of financing last week.

Signals: Ahead of the Curve

Purpose of Capital: The Musical. And now for something completely different… When Jed Emerson released “The Purpose of Capital” last year (see “The Little Jed Book: Digging into the ‘why’ of impact investing), he and producer Mia Haugen, who are married, considered a promotional video “standing on windswept Norwegian tundra, looking deep and thoughtful as my voiceover reads sections of the book,” Emerson recalls. “We immediately abandoned that idea!” They were flummoxed about how to popularize the book’s core concepts, “since, uh, dualism and capital considerations and all are a bit dense for most of us,” he told ImpactAlpha. The couple spent last Thanksgiving with his brother’s family and discovered that his niece and actress Jackie Emerson, who played Foxface in the first “Hunger Games” movie, had actually read the book and thought it was “everything a young 25-year-old should be mulling over.” Jackie Emerson pulled together a cast and crew, put Jed-speak to a catchy tune and released “What If?” or “Impact: The Musical,” this month. A sample: 

What if…we redefined what money is and can do

What if…we thought of capital as energy too

What if…we thought of cash in a completely new vein

What if…we utilized our funds for impact not gain…

Let’s just say, the three-minute YouTube video is full of energy. What if… impact investing hits the pop charts?

Agents of Impact: Follow the Talent

Evercare Health Fund, the $1 billion fund formerly known as the Abraaj Growth Markets Health Fund that is now managed by TPG Growth’s Rise Fund, appoints Massimiliano (Max) Colella as CEO of Evercare, which operates the fund’s health network. Colella, ex- of Smith & Nephew, succeeds Abraaj’s Khawar Mann, who resigned after the transfer to TPG earlier this year (see “What we know about Abraaj’s $1B health fund)… Sean Tennerson, previously with Case Foundation, joins REDF as a program manager… … U.K.’s Funding Affordable Homes appoints Cording Real Estate Group as property adviser… Rethink Impact is hiring an associate… Join more than 100 institutional investors and asset owners at Phenix Capital’s Impact Summit America Nov. 14 in New York.

Thank you for reading. 

– Oct. 9, 2019