Greetings, Agents of Impact!
Featured: Impact Voices
Local project developers are key to a just energy transition. The net-zero transition is on. Expanding the ranks of local project developers in communities of color that have been disproportionately affected by pollution and climate change is key to making it a just transition. It is painfully obvious, says Rob Day of Spring Lane Capital, “that most of the project developers in the renewables and sustainability space in the U.S. do not come from the disadvantaged communities that need them the most.” In a guest post on ImpactAlpha, Day says the time is right to replace aging infrastructure and create jobs in marginalized communities with distributed energy resources such as rooftop solar, electric vehicles for last-mile delivery and mass transport, indoor urban food production, and small scale waste-to-energy systems. But local developers are involved in less than 10% of such projects.
Even as more money chases too-few projects, project developers are not being well-served by venture firms or entrepreneurship programs, Day says. Spring Lane, which raised a $156.5 million fund in 2019, has financed food, clean water and waste projects in low-income communities. Day wants entrepreneurship training programs in communities of color to provide support for emerging project developers, and to connect real estate and other developers with sustainable opportunities and impact investors to finance their early efforts. “Without local developers, we cannot have a just energy transition,” Day writes. “Addressing this gap will be critical for achieving the environmental justice and economic development goals that so many within the impact community are now focused on.”
- Renewables Forward. The association of clean energy companies including new members 3Degrees, OneEnergy Renewables and Sun Tribe, released a handbook to share steps for increasing the industry’s diversity, including inclusive recruiting and promotion practices and training to combat unconscious bias.
- Revolutionary power. Northeastern University’s Shalanda Baker urges people of color, poor people, and Indigenous people to “become both architects and beneficiaries of the new energy system.” Her book, “Revolutionary Power, An Activist’s Guide to the Energy Transition,” is due out next month (see “New books on the new rules for a new era of business”).
- Keep reading, “Local project developers are key to ensuring a just energy transition” by Rob Day on ImpactAlpha.
Safeguarding Africa’s creative and cultural moment. The huge economic and social benefits of Africa’s cultural renaissance are at risk in the COVID pandemic. In Nairobi, Heva Fund, an investment firm that supports East Africa’s creative businesses, waived fees and charges for portfolio businesses, but still received “additional, more frantic requests for cashflow support related to the economic effects of COVID-19,” writes HEVA’s George Gachara. In Creativity, Culture & Capital: Impact investing in the global creative economy, a collection of essays from Nesta, Fundación Compromiso and Upstart Co-Lab, Gachara calls for a transformational finance facility to give creative practitioners space to recover and reinvent. He calls it “a pay-forward scheme for those who want to be co-producing the realities of the second most populous and youngest continent now and over the course of the 21st century.”
- Institutional interest. Heva invests in film, music, gaming and fashion. The firm’s Young Women in Creative Industries Fund helps women-owned and women-led early-stage creative enterprises in Kenya expand production and distribution. Other investors attracted by the surge in creative activity and entrepreneurship in Africa include the Central Bank of Nigeria’s Creative Industry Finance Initiative; the African Development Bank’s fashion investment programme; and Afreximbank’s creative industry facility.
- Keep reading, “Safeguarding a creative and cultural moment: The impact of COVID-19 on Africa’s creative sectors,” by Heva’s George Gachara.
Dealflow: Follow the Money
Breakthrough Energy Ventures doubles down on cleantech. The billionaire-backed venture capital firm raised an additional $1 billion to invest in up to 50 startups with potentially game-changing climate solutions. In 2016, Breakthrough Energy Ventures’ $1 billion commitment to accelerate the low-carbon transition helped lead a rebound in cleantech investing. BEV’s second round of funding comes as even commercial investors are chasing clean and climate tech solutions (see Signals, below).
- Clean tech spectrum. BEV has made more than 30 investments. Just since June, it has backed lab-grown breast milk producer BIOMILQ; low-carbon concrete producer CarbonCure Technologies; Zero Mass Water, a tech venture converting water vapor to drinking water; and ZeroAvia, a producer of zero-emission power trains for airplanes.
- Time horizon. BEV’s 20-year investment timeframe is more than double most venture capital funds. MIT spin-out The Engine, which co-invests with BEV, has a similarly long time horizon, reflecting the long development paths of deep tech startups. Prime Coalition and Fifty Years are derisking high-impact climate tech with creative philanthropic capital and first-in institutional capital.
- Read on.
Off Grid Electricity Fund invests in Energy Systems Group to bring solar electricity to Haiti. More than half of Haiti’s population lacks access to reliable electricity. The Haitian government established the Off Grid Electricity Fund to electrify 200,000 households in Haiti within 10 years. The fund provided a $500,000 working capital loan to Energy Systems Group, which sells low-cost solar products, such as lanterns and solar home systems, to off-grid households in Haiti under the brand Ekotek Energy. The company aims to provide electricity to more than 140,000 Haitian households by 2024.
- Quality products. The Off Grid Electricity fund is managed by Luxembourg-based Bamboo Capital Partners and Fonds de Développement Industriel, or FDI, a Haitian government-led development financial institution, and backed by the World Bank, the Clean Technology Fund and the Climate Investment Funds. FDI’s Laurent Dalencour said the financing would enable Ekotek to offer longer-lasting products.
- Check it out.
Google invests in Dunzo to advance India’s digital economy. Dunzo’s delivery platform helps small and local businesses fill online orders for food, medicine and consumer goods in 300 neighborhoods across India. The company is “helping small businesses in their digital transformation journey in support of business recovery,” from COVID’s economic impacts, said Caesar Sengupta of Google, which backed the company’s $40 million funding round with LGT Lightstone Aspada, Lightbox, Evolvence and Hana Financial Investment.
- Test hub. Google plans to invest $10 billion over seven years to accelerate India’s digital economy, particularly for small businesses. “Building products for India first has helped us build better products for users everywhere,” wrote Google’s Sundar Pichai.
DeHaat raises $30 million to support smallholder farmers in India. Agtech venture DeHaat, headquartered in the rural state of Bihar, runs an online marketplace that connects India’s small farmers with financial services and buyers for their products. DeHaat’s new financing comes less than a year after its $12 million Series A round, a sign of the surge of agtech investing activity in India. DeHaat’s latest round was backed by Prosus Ventures, RTP Global, Sequoia India, FMO, Omnivore and AgFunder. Read on.
SEAF launches new gender lens fund. SEAF’s Women Economic Empowerment Fund will invest in women-led and focused businesses in Vietnam, Indonesia and the Philippines. Copenhagen-based Pædagogernes Pension invested an undisclosed amount as the fund’s anchor investor.
Signals: Ahead of the Curve
Investors and corporations bet billions on mobility’s all-electric future. Call it the Tesla effect. Or the Biden effect. Or maybe the China effect. Falling cost curves and soaring consumer demand mean investors and corporations can’t get enough of electric cars, trucks, fleets, batteries and charging infrastructure. A rush of new deals is fueling competition among incumbent automobile manufacturers and sending the valuations of upstarts soaring.
- Sky high. Rivian, the electric truck maker backed by Amazon, raised close to $2.7 billion at a valuation of $28 billion. Funds advised by T. Rowe Price led the round, which also included Fidelity and Amazon’s Climate Pledge Fund. “In my lifetime, we are going to go from a world where electric vehicles are a tiny subset of the market to where electric vehicles represent 100% of the market,” Rivian’s R.J. Scaringe told the New York Times. The 100% electrification of vehicles requires investments of more than $2.5 trillion over the coming decade, according to Bank of America.
- Beyond Tesla. GM followed up its very public “all-electric future” rebrand last week with a $2 billion investment from Microsoft, Honda and other companies in Cruise, the autonomous electric vehicle company majority-owned by GM that is valued at $30 billion. GM plans to invest tens of billions and roll out dozens of new EV models in the next five years. Ford and Volkswagen are also investing billions in electric vehicles and trucks. Volta, a commerce-centric EV charging network, raised $125 million in venture capital, including from Chicago-based Energize Ventures. Electric fleet company Proterra is merging with a SPAC, or special purpose acquisition company, backed by ArcLight Capital Partners.
- Battery costs. Driving the market: battery efficiency. Within two years, battery pack prices could drop to around $100 per kilowatt hour, a key threshold for mass market adoption, says BloombergNEF, and to $58 per kWh by 2030.
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Agents of Impact: Follow the Talent
Sarah Gelfand, ex- of Fidelity Charitable, joins BlueMark as managing director… The Social Entrepreneurs’ Fund seeks an analyst in Brooklyn… The Nature Conservancy’s Conservation in Partnership with Indigenous Peoples and Local Communities team is looking for a finance director in Arlington, Va.… Convergence is recruiting a regional representative for Latin America… London Business School’s Startup Hub is hiring a research associate in entrepreneurship… The World Economic Forum hosts The Davos Agenda 2021: A crucial year to rebuild trust,” Jan. 25-29… Cornerstone Capital Group is hosting “Impact Investing and Systemic Change,” Feb. 3.
Thank you for your impact.
– Jan. 20, 2021