Greetings, Agents of Impact!
Agents of Impact Call No. 27: Opportunities at the intersection of gender and climate. GenderSmart’s Suzanne Biegel joins ImpactAlpha’s Jessica Pothering, along with entrepreneurs, investors and other special guests on The Call, Tuesday, Feb. 23, at 9am PT / 12pm ET / 5pm London / 8pm Nairobi. RSVP today.
Featured: The Reconstruction
How unlikely partners came together to fight racial bias in asset allocation. The broad problem of systemic bias in the asset management industry became very specific when fund manager Rachel Robasciotti pitched her services to an investment committee affiliated with Brent Kessel’s Abacus Wealth Partners. Traditional due-diligence frameworks have largely excluded all but white, male asset managers, who manage 98.7% of the investment industry’s $69 trillion in assets. Even from an impact investing firm, Robasciotti faced standard questions, which tend to discount some experiences and overvalue others. In particular, business-as-usual has stacked the odds against first-time fund managers, with the effect of excluding many fund managers of color. “I had a really heartfelt conversation with Brent,” said Robasciotti, who founded Adasina Social Capital in 2018. She says she told him, “‘Do you understand that asking these particular questions doesn’t realistically assess my acumen and whether I’m a good fit?’ And he listened.” Host Monique Aiken elicits the origin story of the Due Diligence 2.0 Commitment from Robasciotti, Kessel and allies Tracy Gray and Erika Seth Davies on the latest episode of ImpactAlpha’s podcast series, The Reconstruction.
The Due Diligence 2.0 Commitment has been embraced by Abacus and more than 20 other asset owners and allocators, including the Nathan Cummings and Tara Health foundations and Sonen Capital, Wetherby Asset Management, Cornerstone Capital Group and Align Impact. The commitment includes nine practices to help push the allocation of capital towards parity. Among them: Be willing to be first-in capital. Consider alternative ways to demonstrate a “track record.” And factor in risks and costs that have historically gone unrecognized, such as social unrest, lost tax revenues, sickness and lost productivity. Robasciotti says she since had a different conversation with the same investment committee. “What are the things you’re trying to get at? What are the reasonable ways I have to demonstrate this?” she says she asked them. To us all, she poses the question: “How can we get the manager diversity we want, and the impact outcomes, as we’re in the process of dismantling the systems we’re in?”
Read on and listen to “How unlikely partners came together to fight racial bias in asset allocation,” on ImpactAlpha.
- Subscribe to The Reconstruction. The entire series of podcasts is up on Spotify, Anchor and now on Apple.
- On the beat. Find podcast summaries and ImpactAlpha’s original coverage of The Reconstruction, plus dealflow, signals and Agents of Impact, on our new landing page.
Dealflow: Follow the Money
Panoramic Ventures hunts for underserved founders in overlooked markets. The Atlanta-based venture capital firm is a partnership between tech entrepreneur and angel investor Paul Judge and BIP Capital, a venture firm with more than $500 million in assets under management. “As a minority who has built companies outside of the traditional tech hubs, I know what it’s like to be an overlooked founder,” said Judge. The target $300 million fund will make seed, Series A and Series B investments in Black, women and other minority-led tech companies in U.S. markets, particularly those in the Southeast and Midwest. Special focus: startups founded by college students and professors.
- Early traction. Panoramic has soft commitments of approximately $125 million from high-net worth individuals and family offices, a representative tells ImpactAlpha.
Clean transport venture Hyzon Motors to IPO via SPAC. Hyzon, which makes commercial vehicles powered by hydrogen fuel cells, will merge with Decarbonization Plus Acquisition Corp., a special purpose acquisition company, or SPAC. The public offering includes a $400 million PIPE (for “private investment in public equity”) from BlackRock, Federated Hermes Kaufmann Funds, Fidelity, Wellington and Riverstone Energy.
- Hydrogen dealflow. Another hydrogen fuel-based startup, C-Zero, raised funding from Breakthrough Energy Ventures. Last week, Amazon’s Climate Pledge Fund invested in Infinium to power trucks, planes and ships from ‘electrofuel’ made from green hydrogen and waste carbon dioxide. ZeroAvia raised $37.7 million in December for hydrogen-based fuel cells for aviation. Green Hydrogen Systems secured €28 million ($34 million) to develop hydrogen-based fuel in support of Europe’s climate goals.
- SPAC B Corp. The SPAC launched by Renewable Resources Group and Capricorn Investment listed on the Nasdaq. Sustainable Development Acquisition I Corp is aiming for B Corp. status.
- Read on.
Maya secures $2.2 million for mobile health consultations in Bangladesh. The Dhaka-based health messaging app relies on artificial intelligence, healthcare professionals and physicians to connect users to health and mental health services. Maya was set up in 2011 as a service for women in Bangladesh lacking access to quality and affordable healthcare; now, 40% of its users are men. The woman-led startup has grown to 10 million users and is expanding to Sri Lanka, India, Pakistan and the Middle East.
- Record round. Maya’s funding is the largest round raised by a Bangladesh-based startup, TechCrunch reports. Early-stage investor Anchorless Bangladesh and impact investor The Osiris Group backed the deal.
- Check it out.
Africa’s Great Green Wall to combat desertification secures $16.8 billion in commitments. The initiative, launched in 2007 by the African Union, aims to restore degraded land, boost food security and help local communities adapt to climate change in the Sahel-Saharan region (see, “Building Africa’s Great Green Wall”). Partners, including the World Bank, European Commission, African Development Bank and others, committed approximately $16.8 billion by 2025 for the 11 countries along the nearly 5,000-mile route. That leaves $16.2 billion needed to complete the wall by 2030. The three partners have pledged to commit additional capital. Onward.
Dealflow overflow. Other investment news crossing our desks:
- Brown Advisory takes stake in CrossBoundary Group. The $100 billion investment manager took an undisclosed minority equity stake in CrossBoundary, whose group of companies includes investment advisory services firm CrossBoundary Advisory and three Africa-focused energy and infrastructure ventures.
- Plume secures $14 million for trans-focused mobile healthcare. The Denver-based startup is backed by Craft Ventures, General Catalyst, Slow Ventures and Town Hall Ventures.
- FINTECH.TV raises funding to grow platform. The New York-based company covers fintech, blockchain, sustainable finance and impact investing via broadcast partner Bloomberg. Brand Capital International, the investment arm of The Times of India Group, invested an undisclosed amount to support FINTECH.TV’s expansion in India, Africa, the Middle East and Nordic countries.
Signals: Ahead of the Curve
Bets Elon Musk might have made beyond Bitcoin. Corporations are sitting on a collective $4 trillion in cash, fueled by tax cuts and low-cost borrowing. How they deploy the assets amid a pandemic, a climate crisis and a racial reckoning could shape the economy for decades (see, “Stakeholders stake new claims on corporate cash to finance an inclusive recovery”). That heightens the scrutiny of Tesla’s $1.5 billion investment in Bitcoin, the speculative digital currency. Musk’s embrace sent Bitcoin’s price soaring, making a mint for crypto-investors. Other corporations are deploying their cash to create more lasting value to companies and stakeholders.
- Small business lending. Companies including Google, Netflix, Twitter, Mastercard and Square (which has also invested in Bitcoin) have put their balance sheets to work in minority-owned banks and community lenders that are helping underserved small businesses survive the pandemic (see, “Why investing corporate cash to close racial wealth gaps can shore up long-term growth”). Goldmans Sachs committed $130 million to Hope Enterprise to support small businesses the Deep South (see, “Big companies back small businesses and the community development financiers that serve them”).
- Combating climate. Microsoft and Amazon have created $1 billion-plus venture funds to accelerate technology to help them decarbonize their operations and address the systemic risk of climate change. (Musk’s foundation is funding a $100 million prize for innovative carbon capture and storage technology.)
- Social contract. Apple, Facebook, Google and Microsoft have together committed more than $5 billion to affordable housing funds and development. Amazon ponied up $4 billion for employee safety and health, after initially being criticized for its COVID response. Another simple idea with far-reaching impact: corporations paying their fair share of taxes. From parking cash in green infrastructure banks to building out new markets for renewable energy and broadband in emerging markets, check out our own list of suggestions.
- Don’t hoard it.
Agents of Impact: Follow the Talent
‘Technology futurist’ David Shrier joins London’s Imperial College Business School and venture builder initiative at the Centre for Digital Transformation… Sara Aminzadeh is named vice president of partnerships at the US Water Alliance… Kerry Bowie of Msaada Partners and Daniel Goldman of Clean Energy Ventures launch Browning the Green Space, an initiative to create green sector opportunities for people of color…
Y Analytics (TPG) is recruiting a manager of impact solutions, a climate-focused ESG performance and impact associate and an ESG performance associate… CDC Group is hiring an executive/manager of development impact management in its infrastructure and climate Group/SMART Industries in London… KKR Capstone seeks a climate strategy and resources management associate… LISC is looking for a senior financial analyst in New York.
Thank you for your impact.
– Feb. 10, 2021