Greetings, Agents of Impact!
‘Tis the season for our look-aheads to 2022 and, thanks to subscribers like you, we are able to make the roundups freely available. So give your friends and colleagues the gift of a link to ImpactAlpha’s industry-leading coverage of climate finance, impact in emerging markets, The Reconstruction and catalytic capital (below). Coming tomorrow: Capitalism Reimagined. You can find the whole set on our Looking Ahead to 2022 landing page.
Featured: Looking Ahead
Catalytic Capital in 2022: Expanding the toolkit to crowd in capital for impact. When ImpactAlpha asked subscribers last year to rank the areas where they wanted more coverage, “catalytic capital” topped the list. After all, breakthrough business models, innovative finance and high-impact dealmaking are where impact investors really show their stuff and show how capital markets and finance can be different. This year, we dove even deeper into the deals, people and strategies for using patient, risk-tolerant, concessionary and flexible capital. Some of the signals we’re watching in 2022:
- Expanding the knowledge base. Our deep dive is sponsored by the Catalytic Capital Consortium, or C3, a collaboration of the MacArthur and Rockefeller foundations and Omidyar Network. MacArthur has made nine investments from its $150 million mandate for demonstrations of catalytic capital. C3 is backing a dozen research projects by practitioners deploying catalytic capital to bridge financing gaps for early-stage climate innovation, support Indigenous entrepreneurs and advance employee ownership.
- New catalytic investors. Wealthy families and corporations are joining foundations and governments in taking higher risks, lower returns or a longer investment time-horizon in order to drive impact on social and environmental issues they care about. Impact-first family offices include Diane Isenberg’s Ceniarth, the Berwind family’s Spring Point Partners, Chris Larsen and Doug Galen’s Rippleworks, and the Kaplan family’s A to Z Impact.
- Bridging capital gaps for climate. Catalytic investors are deploying blended capital, guaranteed off-take agreements and targeted project financing to fill climate capital gaps. Case in point: Prime Coalition led a 2018 seed round for Lilac Solutions to develop an environmentally-friendly approach to extracting lithium, an essential element in electric vehicle batteries. The startup went on to raise $150 million in Series B financing in October.
- Proving the case. All told, “blended finance” has unlocked only about $160 billion for sustainable and impact investments since 2010. Convergence’s Joan Larrea took on five critiques, including that blended finance doesn’t address the needs of low-income countries and that there is no proof of effectiveness or impact. Still, she said on ImpactAlpha’s Agents of Impact Call No. 33, “The field is nowhere at the scale it needs to be.”
Keep reading, “Catalytic Capital in 2022: Expanding the toolkit to crowd in capital for impact,” by Dennis Price and David Bank on ImpactAlpha.
Dealflow: Gender Lens
Minderoo Foundation launches $100 million women-led strategic impact fund. The Australian foundation has made six investments, including Toronto-based Ulula, which makes software to help companies engage workers in their supply chains; Ocean 14 Capital, a London-based manager investing in the blue economy; Singapore-based circular economy investor Circulate Capital; and Humanity United’s ethical supply chain fund Working Capital. “All investees are required to regularly report on impact metrics that align to the foundation’s goals,” said Minderoo’s Felicity Gooding. “In some instances, our returns are even contingent on social outcomes being delivered.”
- Gender lens. “We want to see more women empowered to lead businesses and investment processes that actively tackle entrenched gender bias,” said Minderoo’s Jenna Palumbo, who will lead the fund with Gooding and co-founder Nicola Forrest. Alitheia IDF, an Africa-focused gender-lens fund, raised $100 million this week. The latest Project Sage survey found more than 200 funds that use a gender-lens investing strategy.
New Voices secures $97 million for women of color entrepreneurs. Richelieu Dennis launched the venture firm New Voices to plug a funding gap for women of color entrepreneurs after selling his personal care products business Sundial to Unilever in 2017 (for background, see “Unilever, Sundial fund invests $30 million in female entrepreneurs of color”). Dennis stepped away from leadership roles at Essence Communications last year after anonymous allegations of discrimination and sexual harassment; an internal investigation by two law firms found the allegations to be unsubstantiated. New Voices’ second fund has secured $97 million, about one-third of its targeted $300 million, according to Axios and an SEC filing.
- Women rising. New York-based New Voices’ portfolio includes cosmetics companies Beauty Bakerie and Mented, enterprise software maker Envested, and Cornbread, a farm-to-table soul food restaurant founded by a refugee from Liberia.
- Share this.
AES Corp. acquires Community Energy Solar. The deal provides an exit for SJF Ventures, an impact manager that invested in Community Energy Solar’s Series A round in 2010. CES, based in Pennsylvania, has developed more than three gigawatts of solar energy projects, including early utility-scale projects in several states, and has another 10 gigawatts of developments in the pipeline. CES “blazed the trail through the financing, interconnect, land acquisition, permitting and off-take complexities to show how to ‘go big’ in solar,” SJF’s Dave Kirkpatrick said (see “Agent of Impact: Dave Kirkpatrick“). AES, a major electricity provider, is expanding aggressively into renewable energy.
- Clean energy portfolio. SJF’s clean energy investments include Terabase Energy’s monitoring software for utility-scale solar projects, PosiGen’s solar-panel leasing platform for low-income households, battery data and analytics startup Voltaiq, and Nextracker, which makes solar tracker systems.
- Shine on.
Dealflow overflow. Other investment news crossing our desks:
- Buoyant Ventures leads a $10 million investment in sustainable supply chain company SupplyShift.
- Chennai-based agri-marketplace WayCool snags $11.6 million from Europe’s Huruma to strengthen food chains in India.
- Apollo Global Management’s Athene Holding Ltd. will buy Alex Rodriguez-backed Petros Pace Finance, which lends to clean energy projects in commercial properties.
- London-based impact investing app CIRCA5000 raises €4.5 million ($5 million) – in 10 minutes – on crowdfunding platform CrowdCube.
Agents of Impact: Follow the Talent
Trilinc Global is recruiting an investments associate in Los Angeles… Intentional Futures seeks an associate director for social impact in Seattle… NESsT has openings for a development director in the U.S. or remote, and an investment director for Central Europe in Poland or remote… Virginia Community Capital is looking for a senior financial analyst in Richmond… The Global Steering Group for Impact Investment seeks a fundraising executive in the U.K… UOB Venture Management seeks a director or associate director of impact investing in Singapore.
Thank you for your impact.
– Dec. 22, 2021