The Brief | March 15, 2022

The Brief: Divesting from Russia, Mooving up, Black founders matter, smart homes in Europe, impact investing in Latin America

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Greetings, Agents of Impact!

Featured: Institutional Impact

Divestment gets a reboot as global investors dump Russian assets. The speed and scale of the divestment from Russia dwarfs earlier divestment efforts, from apartheid South Africa to fossil fuels. “The coordinated effort has provided a demonstration of a different kind of divestment than we have seen before,” Imogen Rose-Smith writes in her latest Institutional Impact column for ImpactAlpha. Some institutional investors are just managing their risks. Others are responding to sanctions. And still others are complying with legislation, or requests from elected officials, and even demands from customers and the public. “But if the war goes on, and Putin remains in power, how long will the resolve to stay out of a once-lucrative market last?” Rose-Smith asks. “If it works, the divestment effort may rewrite the playbook. If it doesn’t, and investors and companies slink back, it may discredit divestment as a strategy for years.”

The carbon divestment movement took its inspiration from the campaign to prod institutional asset owners divest their money from companies doing business with apartheid South Africa. Post-apartheid, divestment has been seen as a proxy for broader and higher causes, which institutional fiduciaries could thus argue were outside their purview. In the case of Russia, they appear to have decided that the risks are material. “Divestment against a corrupt state is not a symbolic act of protest,” Rose-Smith argues. “It is an act of standing up to bad governments and bad governance.” Such late corrections don’t excuse a decade of doing business with autocrats and oligarchs, she says. “Institutional investors – like all of us – are still on the hook.”

Dealflow: Inclusive Fintech

Moove raises $105 million for revenue-based vehicle financing in emerging markets. The Nigerian mobility startup, launched in 2020, provides car loans to Uber and other ride-hailing drivers in Lagos, Accra, Johannesburg, Cape Town, Nairobi and Ibadan. Moove’s alternative credit-scoring helps drivers qualify for loans that can be paid back as a portion of their revenue, with interest of 8% to 13% per year. The goal: increased vehicle ownership. “There are still millions of budding mobility entrepreneurs in emerging markets across the world who have limited or no access to vehicle financing,” said Moove’s Ladi Delano.

  • Scaling up. The company plans to add new vehicle classes, such as trucks, three-wheelers, bikes and buses. The company also aims for 60% of its financed vehicles to be electric or hybrid, and for 50% of its borrowers to be women. “As we scale, we remain committed to empowering women, leading the electrification of the mobility space, and driving financial inclusion,” said Moove’s Jide Odunsi.
  • Global expansion. The debt and equity round follows Moove’s $23 million Series A round last year led by Speedinvest and Left Lane Capital, both of which re-upped in the new round. The funding will help Moove expand to Asia, the Middle East and North Africa.
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Black Founders Matter raises $3 million to establish ‘Black as an investment vertical.’ The Portland, Ore.-based fund has backed 10 companies, including HUED, a Black woman-led startup matching Black and Latinx patients with providers of culturally-sensitive healthcare. The fund is looking to raise $10 million to write checks of $100,000 or more to early-stage companies led by Black founders.

  • Industry agnostic. Black Founders Matter sources deals from startup accelerators, competitions, fund networks and universities. “Black is the new vertical,” said Black Founders Matter’s Marceau Michel. “The entire emphasis of our fund is about creating accessible venture capital for Black entrepreneurs and diverse innovative problem solvers.”
  • Onward.

Tibber secures $100 million for smart home-energy devices. The Norwegian company provides household energy monitors, connected thermostats and electric-vehicle charging devices for tens of thousands of customers in Norway, Sweden and Germany. The new funding will help Tibber offer new products to make homes more electricity-grid independent. The Series C round was led by Summa Equity, which earlier this year closed its third impact fund at $2.6 billion to invest in companies working to advance the Sustainable Development Goals. “Tibber’s service directly addresses several of the SDGs,” said Summa’s Tim He, including Goal No. 7 (renewable energy), No. 12 (responsible consumption) and No. 13 (climate action). Tibber has raised close to $182 million in debt and equity since 2016. Check it out.

Dealflow overflow. Other investment news crossing our desks:

  • Turkish development bank TKSB secures $100 million from the International Finance Corp. to create jobs for women and improve access to financing for women entrepreneurs.
  • In India, Aavas Financiers snags $50 million in debt funding from the U.K.’s CDC Group to provide real estate financing for women.
  • Boston-based food tech company Mori raises $50 million to slow food spoilage and reduce waste.

Signals: Impact in Latin America

Rodrigo Villar wants impact investors in Latin America ‘to think more radically’ (Q&A). The $15 billion flood of venture capital into Latin American startups last year caught even veteran investors by surprise. “I have been working in this industry for 18 years and what happened in the last couple years – to be honest, I didn’t see it coming,” New Ventures’ founder Rodrigo Villar says in an interview with ImpactAlpha. Mega-investors have arrived, like SoftBank, which came into Latin America with a $5 billion fund in 2019. Dozens of startups in Latin America have achieved unicorn status, including impact venture Betterfly, a Chilean insurance tech venture. As the Latin American Impact Investing Forum, or FLII, gets underway in Mérida, Mexico, Villar says venture investing in the region has gotten bigger, faster and more sophisticated.

The region’s swell of venture capital is making Latin America’s original impact investors reassess their roles. “Now you’re competing with hundreds of different funds, including angel and seed investors,” says Villar. He wants the impact investing community to raise its ambitions. For founders, impact investors can offer a different mindset, as well as blended finance or cheaper debt. “If a fund can offer those perks, that will be a competitive advantage,” Villar says. Intentionality should be the flag that all impact funds wave. Tying carried interest to a funds’ impact performance, as well as returns, should become the norm, not the exception. On the docket for New Ventures: an early-stage fund to invest in health tech for women. “We cannot keep going with this middle-road approach,” cautions Villar. “Impact investors need to think more radically about adding value, not just money.”

Agents of Impact: Follow the Talent

B Lab names Eleanor Allen, ex- of Water for People, as lead executive; co-founders Andrew Kassoy and Bart Houlahan will remain as board members and senior advisors… Impact Community Management has openings in San Francisco for an executive administrative assistant, an investment analyst for impact investing, and an underwriter for mortgage investments… Pacific Community Ventures is hiring business advising relationship managers and credit analysts.

The Community Foundation of South Jersey seeks a community impact manager… Sorenson Impact is looking for a student associate in Salt Lake City… The Black Venture Institute is accepting applications for its summer cohort… As You Sow, Sustainable Investments Institute and Proxy Impact present their proxy preview, Thursday, Mar. 17… The Grantham Research Institute, NGFS and Inspire are hosting a discussion on biodiversity and financial stability, Thursday, Mar. 24.

Thank you for your impact.

– Mar. 15, 2022