Greetings, Agents of Impact!
Featured: Electrify Everything
Energy efficiency is critical for climate goals and global security. Russian natural gas had barely resumed flowing through the Nord 1 pipeline to Europe when it slowed to a trickle this week. The tightening of supply underscored the imperative to reduce European dependence on Russian gas amid geopolitical tensions and skyrocketing prices. Rationing is likely. Less painful: all-out energy efficiency. “Energy efficiency can go a long way towards alleviating the pain,” says John Galyen of Danfoss North America in a guest post on ImpactAlpha. “More efficient cars, buildings and industrial facilities require less energy to perform the same functions.” The energy precarity has pushed the E.U. to raise this year’s goals for energy savings through efficiency to 14.5%, from 9%. Doubling the global rate of energy intensity improvement to 4% a year could save the equivalent of China’s annual energy – and reduce annual emissions by an extra five billion tons by 2030, according to the International Energy Agency. The savings for households: $650 billion per year.
- Build back efficiently. The Democrats’ off-again, on-again climate and energy spending package, now called the Inflation Reduction Act, provides $9 billion for home energy rebates, consumer tax credits for heat pumps, rooftop solar, electric HVAC and water heaters, tax credits for new and used electric vehicles, and $1 billion for energy retrofits in affordable housing. After holding out for months, West Virginia Senator Joe Manchin yesterday agreed to the $369 billion bill, which also includes funding for clean energy, industrial decarbonization, environmental justice, and climate-smart agriculture.
- Danish design. Last month’s Global Conference on Energy Efficiency was held in Sonderborg, Denmark, which IEA’s Fatih Birol calls “the global capital of energy efficiency.” Sonderborg’s businesses and citizens have slashed emissions by more than half since 2007. Geothermal district heating, heat pumps and controlled lighting and heating have helped households save energy. A local grocery store runs on recaptured heat. Danfoss, a heating and cooling company based in Sonderborg, has cut its own emissions by 95%. As Galyen writes, “The greenest energy is the energy we don’t use.”
- Keep reading, “Energy efficiency is critical for climate goals and global security,” by John Galyen on ImpactAlpha.
Dealflow: Investing in Health
Clinicas de Azucar will expand diabetes clinics with $7.3 million from Blue like an Orange. Diabetes has become one of the top three causes of death in Mexico, up from 15th in the 1950s. Clinicas de Azucar has grown to be an essential player in Mexico’s fight against the preventable and manageable disease. The Monterrey-based social enterprise operates the largest network of diabetes clinics in the country, with 33 clinics in 19 major cities. The company has treated over 220,000 patients, up to 95% of whom are low-to-middle income. “Although no one is immune to diabetes, low-income people are hit the hardest,” said Clinicas’ Javier Lozano. The company aims to double the number of patients served with the 150-million-peso ($7.3 million) mezzanine investment from Blue like an Orange Sustainable Capital.
- Impact-linked finance. Clinicas has leveraged social impact incentives, or SIINCs, to drive low-income patient intake and raise $1.5 million in equity funding from impact investors. Through the mechanism, Swiss development agency SDC rewarded the firm for increasing the percentage of low-income clients it serves from 31% to 36% and for improving blood-sugar levels.
- Affordable care. “Typically innovations in healthcare increase costs, because they’re looking for better technology,” Lozano told ImpactAlpha in a 2019 video interview. Clinicas’ “one-stop-shop” model has lowered the cost of care by providing services, including consultations, behavior change coaching, and access to specialty pharmacies, through an annual membership. “In terms of serving low-income patients, it [should be about] finding innovations that reduce costs,” Lozano said.
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Circulate Capital secures $53 million to reduce plastic pollution. Singapore-based Circulate Capital has been investing in efforts to keep plastic out of oceans and waterways since 2019 via its $112 million Circulate Capital Ocean Fund. Its latest fund will invest at the intersection of climate tech, plastic recycling and the circular economy. “The fund will help address plastic pollution and climate change through critical investments in recycling, waste management, and innovations in alternative materials and advanced recycling technologies,” said William Sonneborn of International Finance Corp., which allocated $10 million. IFC’s commitment includes $5 million equity from a blended-finance fund with Finland that aims to unlock private financing for climate-smart projects in low-income countries. The fund will “increase access to much-needed capital for the small and medium-sized enterprises delivering these important solutions,” said Sonneborn.
- Climate tech. Proparco committed $5.6 million to the Circulate fund. Other investors include Align Impact, Builders Vision, Eden Impact, DF Impact Capital and Minderoo Foundation. “It’s clear that the time to invest in the circular economy is now,” said Circulate Capital’s Rob Kaplan. Circulate’s investments include Circ, which returns old clothes from the raw materials from which they were made, and Lucro, which specializes in recycling difficult-to-manage flexible plastic.
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Dealflow overflow. Other investment news crossing our desks:
- British International Investment and FMO committed $116 million to a fund managed by African Infrastructure Investment Managers to invest in high-impact infrastructure projects in Africa.
- Gravity Climate raised $5 million in seed financing from Eclipse Ventures and other investors to help industrial businesses and their supply-chain partners manage their carbon footprints.
- Austin Community Foundation mobilized a $4 million low-interest loan for Austin Habitat for Humanity.
- EQL Finance scored $2.4 million in a seed round led by Zeal Capital Partners to offer interest-free loans to working-class Americans.
- ImpactPHL and The Economy League launched The Hurdle Fund with $125,000 for Black and Brown businesses in Philadelphia.
Podcast: Catalytic Capital
Margot Kane: Clearing obstacles to mobilize capital for emerging fund managers (podcast). “There’s an inherent power dynamic in investing. Full stop.” That’s Margot Kane, chief investment officer of Spring Point Capital, in an Agents of Impact podcast conversation with ImpactAlpha contributing editor Monique Aiken (a portion of their conversation was featured on the weekly Impact Briefing podcast earlier this month). Spring Point, the Philadelpha family office of siblings Graham, Jessica, James and Joanna Berwind, is seeking to rebalance the power dynamic by supporting emerging and first-time fund managers to help build wealth for BIPOC and other underrepresented founders. “Without risk-tolerant capital that can be deployed in unconventional approaches,” Kane wrote in a recent guest post as part of ImpactAlpha’s series, Seeding Impact, “these fund managers may never have an opportunity to prove out their investment thesis and grow into sustainable businesses with long-standing impacts.” In the podcast, Kane expanded on Spring Point’s support for emerging managers such as Plain Sight Capital’s Sylvester Mobley and Ruthless for Good’s Aaron Walker.
- Deal warehouse. Plain Sight invests in early-stage tech and tech-enabled companies led by underrepresented founders. Mobley, a veteran of the Iraq war, previously launched the nonprofit Coded by Kids to help Black and Brown people get jobs with tech companies. To help him launch Plain Sight, Spring Point provided support for operating expenses and, with Philadelphia’s Ben Franklin Technology Partners, provided advance “warehouse” financing to let Mobley make initial investments and “build that new team track record before they go to market later this year to raise the fund in earnest,” Kane said.
- Technical assistance. Spring Point, along with Gratitude Railroad, helped anchor the Ruthless for Good Fund, launched by Walker after founding Camelback Ventures, a New Orleans accelerator that has invested $4 million in nearly 100 social impact entrepreneurs who are women and people of color. Ruthless for Good has raised about $12 million toward its $30 million goal to make seed and pre-seed investments in companies targeting education, the future of work, and access to resources for underserved communities. Spring Point provided early feedback on technical details, including governance structure, advisors, investment policies and limited partnership agreements. “I think that hopefully helped him on the fundraising journey,” Kane said. “And it was really a great way for us to get to know him a lot better, too.”
- Keep reading, “Margot Kane: Clearing obstacles to mobilize capital for emerging fund managers,” and listen to her full interview on ImpactAlpha’s Agents of Impact podcast.
Agents of Impact: Follow the Talent
Jodi Brockington, founder of NIARA Consulting, joins VC Include as programs manager… Tess Maria Krasne, a graduate of UC-Berkeley Haas School of Business, joins Alante Capital as a senior associate… The Media Development Investment Fund selects Suleiman Yar’Adua, Motunrayo Alaka, Catherine Gicheru, Ruona Meyer and Adesubomi Plumptre to lead its Nigeria Media Innovation Program.
Mercy Corps is looking for an associate general counsel to join its legal team… Candide Group seeks a portfolio operations manager… Raikes Foundation is hiring a program officer of education in the Washington, D.C., New York or Seattle metro areas… The Union of Concerned Scientists is looking for a director for a climate and energy program… Croatia Institute is hosting, “Investing in regenerative agriculture infrastructure across value chains,” Thursday, Aug. 4.
Thank you for your impact!
– July 28, 2022