The Brief | August 9, 2021

The Brief: Enterprise’s equitable path forward, retirement savings, farmer marketplace, tech training, deployable climate solutions

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Greetings, Agents of Impact! It’s good to be back. A warm welcome to the many new subscribers and a shout out to the stalwarts as well. Thanks to Agents of Impact around the globe for all that you do. 

Featured: The Reconstruction

An equitable path forward to redress racial injustice in real estate (podcast). The 40-year-old nonprofit affordable housing developer  Enterprise Community Partners has set out to change the structure of the real estate industry, starting with itself. Lori Chatman, president of Enterprise’s Community Loan Fund, joined The Reconstruction podcast to share how Enterprise is working to dismantle America’s legacy of racism in housing by changing the way the organization lends to real estate developers. “We challenged ourselves to say, ‘How are we, as Enterprise, complicit?’” Chatman tells host Monique Aiken. “And let’s begin to think about and apply an equity lens to that and see what we can be doing differently.”

The centerpiece of Enterprise’s effort is Equitable Path Forward, an effort to grow the pipeline of diverse developers and level the playing field for financing. The initiative is raising a $350 million Growth Fund, which includes $100 million in debt, $150 million in equity, and $50 million in grants for BIPOC-led housing providers working in low-income communities. Another $50 million will provision a guarantee facility for credit enhancement so Enterprise can invest with developers who don’t meet the balance-sheet minimums usually required. The whole effort could help redefine risk in real estate underwriting to put more capital in the hands of developers who know their communities, thereby reshaping how neighborhoods are built and who they’re built for.

Redefining risk to catalyze capital for community-based real estate developers. Pervasive perceptions of risk in real estate finance influence which developers and what project gets underwritten by lenders. “Long-entrenched underwriting standards have served to shut an entire subgroup of developers out of wealth accumulation through real estate development,” write Enterprise’s Lori Chatman and Rob Bachmann. To accompany Chatman’s conversation on The Reconstruction podcast, the authors trace the roots of the persistent extraction of wealth from communities of color and lay out the goals for Enterprise’s Equitable Path Forward. The initiative aims to “demonstrate that the ‘risk’ traditionally associated with diverse developers is often misplaced,” and drive capital towards communities in ways that reflect the people who live there. One borrower, Ernst Valery, a Black developer based in Baltimore, says diversity and inclusion in cities “starts with who is in a position to contribute to the physical revitalizing of the places and neighborhoods we serve.”

Dealflow: Human Capital

Rise Fund backs Human Interest’s $200 million round. Employee benefits like health insurance and retirement plans are often too expensive for small and mid-sized businesses. San Francisco-based Human Interest is addressing the issue with a no-fee 401(k) retirement plan for small businesses. TPG Growth’s Rise Fund, which led the company’s latest round, is the first impact investor to back the company. Rise’s Maya Chorengel called Human Interest “one of the most compelling solutions to the persistent problem that roughly half of Americans will not have enough savings when they reach retirement age.” Check it out

South Africa’s Khula raises $1.4 million for farmer-focused marketplace. Johannesburg-based Khula is addressing inefficiencies in South Africa’s food chain by offering farmers access to financing, farming inputs and buyers. The company connects farmers with more than 86 suppliers offering 2,000 products, as well as financial services firms, storage facilities and crop advisors. Its seed round was backed by South African impact fund E Squared and mining and agri-chemicals company AECI. More

India’s Skill-Lync raises $17.5 million to teach tech skills online. The Chennai-based edtech venture offers online engineering courses and certificates to address a global tech skills gap. “Engineering education and upskilling outside of computer science have seen very little digital disruption over the last two decades,” said Anand Prasanna of Iron Pillar, which led Skill-Lync’s Series A round. Offerings start at about $40 and range from individual design software courses to an eight-month post-graduate certificate in Hybrid Electric Vehicle Design and Analysis. The company has developed content in partnership with Bosch, Accenture, Samsung and other large companies. Read on

Dealflow overflow. Other investment news crossing our desks:

  • Nevada-based battery materials supplier Redwood Materials clinches $700 million from investors including Breakthrough Energy Ventures, Amazon’s Climate Pledge Fund and Emerson Collective.
  • Rent-to-own real estate company Landis Technologies secures $165 from Sequoia Capital, Jay-Z’s Roc Nation and Will Smith’s Dreamers VC to help working class Americans purchase a home.
  • Nigerian savings platform Piggyvest acquires peer to expand its reach to low and middle-income Nigerians.
  • Black-led venture Mentor Spaces raises $2.5 million to help diverse candidates build professional networks and help companies to diversify their workforces.
  • Benin issues a €500 million ($588 million) social bond to finance clean water infrastructure and access.

Signals: Climate Crisis

The climate catastrophe is nigh, and so are eight key climate solutions. Today’s bombshell from the Intergovernmental Panel on Climate Change: The planet may be warming even faster than current models and conventional wisdom suggest, with devastating consequences. The key threshold of 1.5 degrees Celsius is likely to be breached within two decades, and scenarios once considered unthinkable, including a two-meter rise in sea levels by 2100, cannot be ruled out, the report finds. A leaked draft in June warned of irrevocable tipping points, from melting polar ice sheets to the loss of the Amazon rainforest, with cascading effects. The IPCC report is an assessment of the latest climate science undertaken by hundreds of scientists. Scientists hope to ratchet up the urgency as global leaders prepare for COP26, the followup to the Paris climate accord set for November in Glasgow. The report is “a code red for humanity,” said the U.N.’s António Guterres. “There is no time for delay and no room for excuses.”

  • The deployable eight. The more optimistic view of “Rethinking Climate Change,” a new report from think tank RethinkX, might coax some anxious IPCC readers off the ledge. “Conventional thinking views emissions mitigation through a linear, reductive lens that fails to appreciate the character, speed and dynamics of change in both natural systems and human systems,” write authors James Arbib, Adam Dorr and Tony Seba. More than three-quarters of global greenhouse gas emissions, they say, can be mitigated within 15 years by a handful of key technologies: solar photovoltaics, wind power and batteries; electric and autonomous vehicles and transportation-as-a-service; and precision fermentation and cellular agriculture.
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Agents of Impact: Follow the Talent

Mary Powell, ex- of Green Mountain Power, becomes CEO of Sunrun, as Lynn Jurich transitions to executive co-chair (see, Agent of Impact)Harry Langer, ex- of The Economist Intelligence Unit, joins US SIF as director of research… Joana Arthur, ex- of Mountain Pacific Group, is named investment director at Boston Common Asset Management… Dorri McWhorter of the YMCA of Metropolitan Chicago is elected to the board of Common Impact… Illumen Capital is recruiting an investment director in the San Francisco Bay Area… CalSTRS seeks a portfolio manager of sustainable investment strategies.

Surdna Foundation is looking for a director of impact investing in New York… Value for Women is hiring a director of finance and operations… Kiva is looking for an investment director of Europe and Asia… Blue like an Orange is recruiting an investment analyst in Washington, D.C… BCG is hiring a manager in its North America Center for Climate and Sustainability… Boston Impact Initiative is hiring an impact investment associate and a director of finance and administrationWefunder is looking for a founder-in-residence… Mercy Corps seeks a venture studio lead.

Thank you for your impact.

– Aug. 9, 2021