The Brief | April 26, 2022

The Brief: Emerging wisdom about emerging managers (podcast), health systems in Africa, small business emissions, lab grown meats, carbon capture materials

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

Greetings, Agents of Impact!

Featured: Agents of Impact Podcast

Fairview Capital’s emerging wisdom about emerging and diverse fund managers. Diverse-owned and managed funds would be more likely to build diverse teams and to invest in diverse founders who, in turn, would be more likely to build companies serving lower-income and diverse consumers. That was the theory of change behind the Ford Foundation’s decision in 2019 to enlist Larry Morse of Fairview Capital to launch the Fairview Foundations Emerging Managers Fund. Last month, Visa Foundation committed $10 million and two other foundations chipped in to bring the fund to $72.5 million. Ford has put in a total of $60 million. The fund of funds channels endowment capital to high-performing managers that may have faced obstacles winning mandates from institutional investors. “From both a financial and an impact perspective, we’re seeing early indications of the results we were hoping to see,” Ford’s Christine Looney says on the latest episode of ImpactAlpha’s Agents of Impact podcast (disclosure: the Ford and Visa foundations have been sponsors of ImpactAlpha).

Performance alone may not be enough to disrupt long-standing biases. “It continues to be a matter of pushing a boulder up a hill,” says Morse, who co-founded Fairview in West Hartford, Conn., and has helped it raise more than $10 billion. Firms owned by women and people of color manage only about 1% of the $70 trillion in U.S. assets under management. Among the managers in the foundation fund are Palo Alto, Calif.-based Ulu Ventures and New York-based Equal Ventures. “We absolutely should be thinking about how much capital at scale we can invest in these types of entities to create that efficient and effective flow of capital, versus picking a couple of new emerging fund managers to tick the diversity box,” says Visa’s Najada Kumbuli. Fairview and the foundations all are aiming to match, or beat, the broader market. “We simply happen to do it with a broader aperture or lens on the kind of people that we think are capable of generating that kind of performance,” Morse says. “And we’ve done that time and time and time again.”

Dealflow: Investing in Health

BluePeak backs Africure to bolster pharmaceutical production in Africa. The challenges of affordability and authenticity have hampered access to life-saving medicines and vaccines in Africa. Case in point: only 15% of Africans are vaccinated against COVID-19, versus nearly 60% worldwide. Africure makes and distributes affordable medicines throughout the African continent. BluePeak Private Capital backed the company from its impact-focused fund for African small and mid-sized businesses. “Strengthening health systems plays a critical role in Africa’s recovery from the pandemic,” said BluePeak’s Fulton Shiundu.

  • Affordable medicines. Africa imports 80% of its pharmaceuticals. Africure produces more than 300 registered drug products for infectious diseases like malaria, as well as chronic conditions like diabetes. The company was formed in 2017 as a buyout from Indian pharmaceutical manufacturer Strides Shasun. Other companies addressing Africa’s pharmaceutical challenges include logistics companies LifeBank and Zipline; sourcing and stocking ventures mPharma and Field Intelligence; verification startups DrugStoc, RxAll and Chekkit; and research and discovery companies 54gene and Yemaachi Biotech.
  • Impact dealflow. Africure is BluePeak’s third investment, after real estate platform Grit and infrastructure developer Ieng. Its fund was set up to provide debt, equity, mezzanine financing and convertible notes for African businesses, with checks of $10 million to $25 million. BluePeak has raised $115 million towards its $200 million goal, mostly from development finance institutions, including the European Investment Bank, the Development Finance Corp. and the U.K.’s British International Investment (formerly CDC Group).
  • Check it out.

Greenly secures $23 million to help small businesses cut carbon emissions. Small businesses’ small carbon footprints add up. And as suppliers and distributors for larger corporations, measuring and managing their emissions is key to the low-carbon transition. Yet many small businesses lack the skills or time to do so (for context, see “Four ways small businesses can manage their greenhouse gases”). French startup Greenly’s software helps small firms estimate emissions from energy usage and e-commerce services and collect data from their suppliers. Greenly aims to be for carbon tracking what Quickbooks is for small-business accounting. Its Series A round was led by Energy Impact Partners and XAnge.

  • Carbon accounting. Plenty of startups are helping big businesses track and manage their carbon footprints. Swedish startup Normative, backed by Google, offers a version of its carbon emissions tracker for small businesses. SME Climate Hub has developed a carbon toolkit for small businesses. In Germany, Vaayu closed a seed round of $11.5 million to offer carbon-tracking software to retailers.
  • Conscious consumers. Also in Germany, Klima secured €10 million ($11 million) to help companies educate and empower workers to be more climate-minded and offset personal emissions.
  • Dive in

Dealflow overflow. Other investment news crossing our desks:

  • Upside Foods scored $400 million, one of the biggest rounds for a lab-grown meat venture; alternative protein ventures CellMEAT in South Korea and Nowadays in San Francisco also raised funding.
  • Dakar-based B2B e-commerce venture Kwely closed $1 million in pre-seed funding from WIC Capital, Loftyinc, DNA Capital and other investors.
  • India’s indoor farming tech venture Eeki Foods raised $6.5 million in a round led by General Catalyst.
  • Mitsubishi Corp. committed $100 million to Breakthrough Energy Catalyst, becoming its first key partner in Asia.
  • Energy tech company Baker Hughes acquired Mosaic Materials, which makes materials that can capture carbon.

Agents of Impact: Follow the Talent

Scott Litzelman, ex- of the Energy Department’s ARPA-E, joins Stripe as program lead for climate… Lourenco Miranda, ex- of Societe Generale, joins EisnerAmper as managing director of environmental, social, governance and sustainability solutions… Miller Center for Social Entrepreneurship is looking for a manager of impact investing, a director of corporate and foundation relations, and a senior manager of campus engagement, in Santa Clara, Calif.

Project Drawdown is hiring a remote chief scientist and several senior/associate scientists… Evergreen Climate Innovations seeks a strategic partnerships manager in Chicago… Rockefeller Foundation is looking for a director of strategic learning and impact in New York… Truist is looking for an affordable housing and impact investments relationship manager in Atlanta.

Pacific Community Ventures is on the hunt for a director of marketing and communications in Oakland… Greenbacker is hiring a manager of portfolio accounting in Portland, Maine… Acumen is recruiting an impact manager in London… Also in London, the Impact Investing Institute seeks a place-project coordinator.

Thank you for your impact!

– Apr. 26, 2022