Greetings, Agents of Impact!
Featured: ImpactAlpha Original
Electrification of vehicle fleets sparks disruption of energy and transportation. Pitching investors last year on Electriphi’s plan to help delivery, utility, school district and other vehicle fleet managers optimize their deployments of electric vehicles and charging infrastructure, CEO Muffi Ghadiali heard the repeated refrain: “You’re too early.” Then, in September, Amazon ordered 100,000 electric delivery vehicles from a startup producer, Rivian. “From that point on, it was like, ‘This is happening now,’” Ghadiali told ImpactAlpha. The Climate Group’s EV100 2020 progress report forecasts that corporate and leasing fleet commitments will drive the roll-out of more than 2.5 million zero-emission vehicles by 2030. “The electrification of transportation is the biggest shift in energy use we’ve ever seen,” says Ghadiali.
Charging and managing all-electric – and ultimately autonomous – fleets will require not only vehicles and chargers but software and systems. At least four Bay Area startups are vying to provide fleet-management solutions, with slightly different approaches. Electriphi last week closed $3.4 million in seed financing. Amply offers “charging-as-a-service” to help fleets lock in fixed charging costs. Stable operates its own charging network. Schneider Electric, the French electric equipment giant, helped incubate and launch EIQ Mobility and remains a minority shareholder. EIQ’s software accounts for different electric vehicle makes and charging systems, government incentives and tax credits, variable electricity rates, and the carbon-intensity of electric generation to spit out plans for fleet managers, utilities and equipment makers. Says EIQ’s Sila Kilaccote, “If it was that easy, everybody would be using electric vehicles already.”
Keep reading, “Electrification of vehicle fleets sparks disruption of energy and transportation,” by David Bank on ImpactAlpha.
Dealflow: Follow the Money
Nonprofit Finance Fund’s $10 million fund to spur homeless housing in L.A. Nearly 60,000 people lack permanent housing in the Los Angeles metro area. The deepening crisis has given rise to a raft of new supportive housing initiatives. To help such projects clear development hurdles, the Nonprofit Finance Fund launched a $10 million flexible loan fund for supportive housing developers. NFF’s Antony Bugg-Levine told ImpactAlpha he was surprised, with the capital, investor interest and community finance lending, “that there’s a gap for NFF to fill.” But even developers able to secure financing for specific projects often lack general enterprise financing, which is needed to keep project planning and execution in motion. The Accelerating Permanent Supportive Housing Fund will provide flexible loans that developers can use and reinvest in multiple projects over an extended period of time.
- Urgent need. More than three-quarters of L.A.’s homeless are completely unsheltered and L.A. County is also home to nearly 15,000 chronically homeless people, triple the number in New York City. County Supervisor Janice Hahn has called for a “Marshall Plan” to address homelessness.
- Catalytic capital. Backers of NFF’s fund include the California Community Foundation, Weingart Foundation and UniHealth Foundation. Three organizations chipped in grant funding. Credit enhancement from the foundations is “a good example of what it takes to do high impact impact investing in the ground,” says Bugg-Levine. NFF has backed other permanent supportive housing initiatives, including Denver’s homelessness-focused social impact bond.
- Dig in.
SUSI Partners raises €275 million for second European energy efficiency fund. The Swiss investment firm invests in clean energy generation, energy efficiency enhancements and energy storage. Two energy efficiency-focused funds support upgrades to buildings and other infrastructure. The firm has already invested €93 million in 17 projects in nine countries from the second fund and is aiming for a final close later this year.
Carolina Opportunity Funds’ first investment is in sustainable agriculture. The Opportunity Zone investor committed an undisclosed amount to BioEconomy Solutions, a Georgetown, S.C.-based sustainable grower of crops for food, biofuels and animal feed. The IMPACT Carolina QOZ Fund takes equity stakes in businesses operating in Opportunity Zones in North and South Carolina.
Local Initiatives Support Corp. closes loan to L.A.’s Lendistry. The financing will boost Lendistry’s balance sheet and help the Black-led community development financial institution support underserved and diverse business owners in Los Angeles. The loan is a first for LISC’s L.A. branch.
Lilac Solutions raises $20 million from Breakthrough Energy Ventures. The Bill Gates-backed fund invested in Oakland-based Lilac’s technology for making lithium-ion battery production more sustainable and less water-intensive.
Signals: Ahead of the Curve
Impact investors outperform on gender diversity in asset management. That’s the standout finding from a Russell Reynolds Associates analysis of 360 decision-makers at 76 leading impact investing firms. The firms, with an average of $382 million in impact assets under management, have nearly 40% women in senior leadership positions, compared to only 4% in the broader financial management industry.
- Talent wars. ImpactAlpha’s What’s Next series explored new ways to develop talent and build investment teams to reshape global finance. A key takeaway: “Broaden the talent pool.” Competition for investor capital means competition for talent as well. “Asset management firms can set themselves apart by aggressively investing in human capital,” wrote Flat World Partners’ Kate Starr. “A diverse, multi-skilled investment team can mean the difference between winning new mandates and suffering continued outflows of capital.” See also, “Training grounds for the next generation of impact talent,” and “Driving impact-career alpha.”
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Agents of Impact: Follow the Talent
Debbie Chang, ex- Nemours Children’s Health System, was named president and CEO of Blue Shield of California Foundation… Phil Kirshman steps away from his role as chief investment officer of Cornerstone Capital Group… Mark Herrera will leave his client- engagement role at RSF Social Finance at the end of February… Aqua-Spark seeks an investment manager in Utrecht, Netherlands… The ImPact is looking for an Asia community manager… Mission Driven Finance is hiring a project manager in San Diego… Wefunder is looking for a city partner in “a big city of your choice.”
Thank you for reading.
— Feb. 24, 2020
