The Brief | November 23, 2021

The Brief: Designing a better system, impact tech in Nigeria and Ghana, custodial accounts for children, investing in caregivers, looking ahead to COP27

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Greetings, Agents of Impact! 

Featured: Capitalism Reimagined

Seven dimensions of a better economic system. In the not-too-distant future, a powerful and diverse movement has succeeded in redesigning the rules, practices, narratives and power relationships of a broken economic system. This sustained, collective effort has shifted a market economy to an economy that uses markets to serve the common good. Okay, so we’re not there yet. But over the past 18 months, the New Capitalism Project has tried to model that emergent movement and the new system it is already creating. The project, backed by Omidyar Network, the Ford and Rockefeller foundations and other funders, engaged a wide range of organizations to make sense of the landscape, then enlisted a dozen leaders in a collective strategy process that is still ongoing. “An opening exists to move towards a more unified and positive version of the future,” states the project’s interim report.

ImpactAlpha has invited several participants to share the New Capitalism Project’s work on next week’s Agents of Impact Call (RSVP). Meredith Sumpter of the Coalition for Inclusive Capitalism, Carol Anne Hilton of Indigenomics Institute, Eli Kasargod-Staub of Majority Action, and Amit Bouri of the Global Impact Investing Network, along with Omidyar Network’s Chris Jurgens, will sketch the outlines of new capitalism and the steps needed to realize it. To move beyond well-worn terms like “inclusive,” “equitable” and “just,” the team took a stab at describing a better economic system across seven dimensions. Among the elements:

  • Businesses and financial institutions, based on common impact standards, earn public trust through their accountability for value creation for all stakeholders.
  • Investment and finance professionals have a mandate to serve under-served communities and can lose their credentials if an annual review shows they have failed to serve a public benefit.
  • A new definition of fiduciary duty requires taking societal and environmental materiality and impact factors into account. Negative and positive externalities are disclosed, priced and built into the financial markets.
  • Working people are seen as a long-term asset to be cultivated and invested in, not an expendable expense item.

Keep reading, “Capitalism Reimagined: Seven dimensions of a better economic system,” on ImpactAlpha.

  • Exclusive briefing. Get the first public briefing on the work of the New Capitalism Project on Agents of Impact Call No. 35: Capitalism Reimagined, next Tuesday, Nov. 30 at 10am PT / 1pm ET / 6pm London. RSVP today.

Dealflow: Impact Tech

CcHUB Syndicate backs five startups in Nigeria and Ghana. The tech accelerator and investor co-invests with African diaspora, angel and early-stage investors to mobilize capital to promising tech ventures in West and East Africa. The syndicate’s third funding round supported Ghana-based farmer financing platform Grow For Me and four startups in Nigeria: Kwaba, a fintech venture helping low-income earners cover home rental payments; identity verification and security startup Identitypass; digital payments and remittance platform Payday; and ride-sharing company Shuttlers.

  • Diaspora financing. CcHUB’s Victoria Fabunmi told ImpactAlpha the syndicate is mobilizing investments from Africans abroad “to unlock additional local and counterpart funding that deepens the quality of capital available to local entrepreneurs.” In its first two rounds, the year-old initiative catalyzed $450,000 for a half-dozen companies. Three of the companies directly supported the COVID healthcare mobilization: medical and blood delivery company LifeBank; cold storage provider Gricd; and pharmaceutical procurement company DrugStoc, which just raised a $4.4 million funding round (for context, see “COVID pandemic gives Africa’s health tech startups a chance to shine“).
  • Check it out

EarlyBird raises $4 million to help parents invest for their children. The Chicago-based fintech venture is on a mission to help low and middle-income American families build generational wealth. Its mobile app, launched a year ago, allows parents to receive monetary gifts from relatives and others on behalf of their children to invest in custodial investment accounts. Of the more than 20,000 parents and guardians who have set up EarlyBird accounts, more than half have household incomes of less than $100,000 a year, EarlyBird’s Jordan Wexler told ImpactAlpha, and most are people of color. Parents pay $1 monthly per child to gain access to EarlyBird’s managed portfolios.

  • Bridging the wealth gap. The seed round was led by Reddit co-founder Alexis Ohanian’s venture capital firm, Seven Seven Six. “I got a savings bond from my great aunt when I was born in 1983,” said Ohanian. “We need an onramp to modern wealth creation for the next generation.”
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Dealflow overflow. Other investment news crossing our desks:

  • Apollo takes a 50% stake in EnCap Investments’ energy storage portfolio company Broad Reach Power. Apollo and EnCap will invest up to $400 million in the company.
  • Bangalore-based precision agriculture startup Fasal raises $4 million from 3one4 Capital, Omnivore and Wavemaker Partners.
  • The Small Industries Development Bank of India and Google are partnering on a fund to provide loans to India’s small businesses, with a focus on women-led businesses.

Impact Voices: Investing in Health

Investing in caregivers to fill gaps in long-term care. The COVID-19 pandemic exacerbated a caregiver crisis in the U.S. Even before the pandemic, demand for care from a growing older population was outstripping the supply of professional caregivers. Innovative, tech-enabled approaches to caregiver support “have the potential to both improve caregiver working conditions and decrease staffing stresses on long-term-care providers,” writes Chris Hedrick of NextStep, which offers tuition-free training for workers looking to become certified nursing assistants. Earlier this month, the Seattle-based company received an investment from J&J Impact Ventures, bringing its latest funding to $3.3 million (J&J Impact Ventures sponsors ImpactAlpha’s Investing in Health coverage). The Milken Institute last year issued a warning of “market failures and funding gaps in providing long-term care.”

  • Investing in caregivers. Kevala raised $4 million in January to help senior living centers and skilled nursing facilities find supplemental healthcare workers. Aiva Healthcare received an investment from the Google Assistant program to improve communication between caregivers and their clients. CareAcademy last year raised $9.5 million to certify health workers through online courses. Hedrick says it’s essential that impact investors fund innovative healthcare startups: “Caregivers deserve a long-term solution, but they need a lifeline now.”
  • Keep reading, “Investing in caregivers to fill gaps in long-term care,” by NextStep’s Chris Hedrick. Check out all of our coverage of Investing in Health.

Signals: After Glasgow

A climate investor looks ahead to COP27 in Egypt (podcast). Only two weeks after the COP26 global climate summit, Stephan Nicoleau of climate investment firm Full Cycle is looking ahead to next year’s Conference of Parties in Sharm El-Sheikh, Egypt. On ImpactAlpha’s Impact Briefing podcast, Nicoleau laid out three actions investors can take in the months leading up to COP27:

  • Make the methane pledge matter. Global leaders pledged to reduce the short-lived but potent greenhouse gas by 30% from 2020 levels. Nicoleau says the pact offers “a chance to think about how capital can move to blow past that 30% reduction level” by building green infrastructure that can avert emissions and add value to local economies.
  • Focus on the worst emitters. Many COP26 delegates and activists were dismayed by a last-minute amendment to phase down, rather than phase out, coal. Nicoleau said investors should focus on replacing with renewable energy the 5% of power plants responsible for nearly three-quarters of the sector’s emissions. “We know where that top 5% of infrastructure is,” he says, citing countries like Poland, South Korea and China (see, “The right capital in the right place at the right time can take climate impact beyond net zero”). “We know what mega-wattage they produce. We know what replacement costs, roughly, should be.”
  • Engage with Indigenous leaders. “This is the 5% of our global population that’s responsible for stewarding 80% of our biodiversity,” Nicoleau said. He says he spoke with Indigenous leaders who traveled three days by canoe to get to the nearest airport. Many were not credentialed for entry into the ‘Blue Zone’ where most of the official dialogue and negotiations took place. “There’s a difference between presence and inclusion.” As Txai Suruí, an Indigenous activist from Brazil, was telling a plenary session about friends who had been murdered for standing up against deforestation, some delegates were already packing up, in what Nicoleau called “a gross display.” The 12 months until COP27 is an opportunity “to engage with indigenous communities in these conversations, because they have to be heard and they are the key for so much of what we need to do.”
  • Read on and listen to Stephan Nicoleau’s conversation with Impact Briefing host Monique Aiken.

Agents of Impact: Follow the Talent

Jim Casselberry, Valerie Red-Horse Mohl, Nathalie Molina Niño and Ushir Shah launch Known, a platform to support entrepreneurs and investors of color. FullCycle’s Ibrahim Alhusseini, Brookings Institution’s Andre Perry, Accion Opportunity Fund’s Luz Urrutia are among the coalition’s advisors… Belinda Oakes, ex- of Highridge Costa Companies, joins Community Preservation Partners as chief financial officer… LeapFrog Investments is hiring a senior manager of healthcare impact in London.

The Greenlining Institute is hiring for roles in climate resilience, economic equity, legislative affairs and other areas… Developing World Markets is recruiting a ​​credit and monitoring analyst and for other roles… Impact Capital Forum’s Policy Working Group will explore the U.S. Labor Department’s proposed ESG regulations with policy advisor Kim Leslie Shafer, Ceres’ Eric Pitt and John Cochrane of the U.S. Impact Investing Alliance, today at 12:30 ET.

Thank you for your impact.

– Nov 23, 2021