Greetings, Agents of Impact!
Featured: Impact Voices
In search of existential answers and impact-first investors, Ceniarth finds religion. In a guest post on ImpactAlpha, Diane Isenberg and Greg Neichin of the family office Ceniarth take on the shortage of “impact first” investors willing to tackle tough challenges with catalytic, including concessionary, capital. “The enthusiasm for solutions that require limited or no financial sacrifices or, even better, deliver ‘impact alpha,’ are at an all-time high,” they write. “But ask these same institutions, even those professing profound dedication to social and environmental change, to dig deeper, to offer longer-duration capital at lower rates, the kind of money that makes a real difference in these challenging times, in marginalized communities, and you will hear crickets.” In search of existential answers and impact-first peers, they say, “we have found religion at Ceniarth.”
Faith-based institutions were among the original impact investors. Nuns, for example, were instrumental in early efforts to hold public companies accountable and provide low-interest loans to nascent community development finance institutions, or CDFIs. Now, Mercy Partnership Fund’s investments in the Kiva Refugee Fund, WaterEquity’s Global Access Fund, and the Southern Opportunity and Resilience, or SOAR Fund “are a carbon copy of our own pipeline at Ceniarth,” Isenberg and Neichin write. Ceniarth has co-invested with Cabrini World MSC in Root Capital, One Acre Fund and various CDFIs. Organizations such as the Catholic Impact Investing Collaborative and the Global Islamic Finance and Impact Investing Platform are attempting to mobilize the field. San Francisco’s Jewish Community Federation is pooling donor-advised funds to join Ceniarth as an investor in the Black Vision Fund. “We hope that as the impact field finds ‘new religion’ that it can also remember some of the merits of ‘old religion,’” Isenberg and Neichin write. “And that extending a hand to those in need is critical to an ethical society, even when it requires sacrifice.”
Keep reading, “In search of existential answers and impact-first investors, Ceniarth finds religion,” by Diane Isenberg and Greg Neichin in ImpactAlpha.
Dealflow: Follow the Money
Nigeria’s Moove raises $23 million to finance vehicles for Africa’s transit drivers. The Lagos-based company partners with ride-hailing and logistics companies to extend vehicle financing to drivers. Moove uses alternative credit scoring to approve drivers for loans and offers revenue-based repayments that cost borrowers 8% to 13% per year, compared to high double-digit interest rates from banks, a spokesman told ImpactAlpha. It aims to have 50% women borrowers and for 60% of its financed vehicles to be electric or hybrid. Uber is the company’s biggest partner. Its Series A round was led by Speedinvest and Left Lane Capital.
- Financing livelihoods. Uganda-based Tugende and Kenya-based Ecobodaa offer vehicle financing for East Africa’s motorcycle taxi, or “boda boda,” drivers. Both companies are increasingly focused on e-mobility (see, “Shift to electric rickshaws and motorcycles is drawing investors”).
- Check it out.
Packard Foundation commits $25 million to address racial disparities in credit. More than 50% of white U.S. households have a FICO credit score above 700, compared with only 21% of Black households. This makes it difficult for Black Americans to secure low-interest debt, or any kind of debt at all. Los Altos, Calif.-based Packard Foundation backed a half-dozen community development financial institutions, or CDFIs, and other organizations to address discriminatory lending practices and unlock credit for underserved communities of color. Since last September, Packard has backed Accion Opportunity Fund with $5 million to lend to California small businesses led by people of color; the Black Vision Fund with $5 million for Black-led CDFIs providing loans for businesses in Black communities in the U.S. South and Midwest; Blackstar Stability with $3 million in equity for a mortgage debt fund for families of color; Oweesta with a $5 million loan to support small businesses and housing in Native communities; Rio Grande Valley Multibank with a $2 million loan; and the SOAR Fund with a $5 million loan to lend to small businesses and community-based nonprofits in the southern U.S.
- Catalytic capital. “Addressing deeply rooted racial disparities is a new focus for our mission investments,” writes Packard’s Susan Phinney Silver. The foundation, she said, is aiming to “introduce these organizations’ work to impact investors looking to deepen their own racial equity investing.”
80 Acres Farms raises $160 million to scale vertical farming. Vertical farming ventures are raking in capital on the promise of increased food security and decreased carbon emissions. One disadvantage compared to conventional farming and ground-level greenhouses: greater energy use. Hamilton, Ohio-based 80 Acres says its vertical farming systems use renewable energy to grow leafy greens, herbs, tomatoes, cucumbers and microgreens. “There’s a pressing need for healthy, fresh and local foods that are grown in more sustainable and cost-effective ways,” said Shaw Joseph of General Atlantic, which led the company’s Series B financing with participation from Siemens, Blue Earth Capital and others. Share this post.
Innomost secures €5 million to turn timber waste into cosmetics. The Finnish company uses materials from sustainable forestry and timber operations to replace fossil fuels, plastics and palm oil in consumer products like cosmetics. Innomost’s focus is on Nordic birch bark, which can be used as a substitute for micro-plastics in skincare and haircare products. Its early funding round was backed by MestaSpring, a Finnish sustainable forestry and circular economy investor, and early-stage Nordic VC fund Innovestor. The government’s Business Finland provided grant and debt-financing. Check it out.
Dealflow overflow. Other investment news crossing our desks:
- Private equity firm Apax lines up a $2 billion acquisition and merger of three software platforms for nonprofits: EveryAction, Social Solutions and CyberGrants.
- Indonesia’s Bukalapak, an e-commerce platform for micro and small businesses, raises $1.5 billion in its initial public offering on the Indonesia Stock Exchange.
- HCAP Partners invests in medical benefits and healthcare authorization software company Myndshft.
- The U.K.’s CDC Group loans $50 million to Sri Lanka’s Commercial Bank of Ceylon to invest in climate initiatives and support small business lending.
Signals: Green Infrastructure
Infrastructure investments promise to move the U.S. from climate pledges to progress. Finally, it really is Infrastructure Week. The Senate’s passage of the $1 trillion package to shore up the nation’s aging infrastructure will unleash a flurry of climate-friendlier activity, from upgrades to the electrical grid and water pipes, to funding for carbon capture, electric vehicle charging and clean hydrogen, to fortifying communities in the face of extreme storms, floods and wildfires driven by a rapidly warming planet. Many of the strongest climate provisions were pulled from the bill to win bipartisan support (it passed the Senate 69 to 30). Instead, they are packaged in a separate $3.5 trillion 10-year spending bill that addresses Democratic priorities such as childcare, housing, education and other social infrastructure and combating climate change. “Congress must take further action soon to confront the crisis directly and build a stronger, more just, and more competitive U.S. economy,” said Ceres’ Anne Kelly.
- Call to action. If it wasn’t already obvious, this week’s report from the Intergovernmental Panel on Climate Change makes clear that climate mitigation and adaptation investments are urgently needed (see,”The climate catastrophe is nigh, and so are eight key climate solutions“). Human activity has released enough greenhouse gasses into the atmosphere to warm the planet by 1.1 degrees Celsius from pre-industrial times; we are on course to pass the 1.5-degree mark within two decades.
- Tailwinds. The policy push could provide tailwinds for the boom in green infrastructure and climate tech. In recent weeks, TPG Rise and Brookfield hauled in $12 billion between them for climate funds. General Atlantic is looking to raise $4 billion. Generate Capital raised a fresh $2 billion for green infrastructure projects and Equilibrium Capital closed a $1 billion greenhouse agriculture fund. “Climate adaptation is enabled by technology, but will be executed in infrastructure,” says Equilibrium’s Dave Chen.
Agents of Impact: Follow the Talent
Drew Schechtman, ex- of Voya Financial, joins AIG as vice president and head of ESG strategy… Food Finance Institute’s Tera Johnson will become CEO of Iroquois Valley Farmland Real Estate Investment Trust in September. Iroquois Valley co-founder and CEO David Miller will remain on the board, while Sarah Larson will take the helm of the Food Finance Institute on an interim basis… Activest is recruiting a chief operating officer, an editor and director of communications, and a senior analyst… Global Landscapes Forum is hosting “The Tipping Point: Solutions from the Inside Out,” about preserving the Amazon biome, Sept. 22-23.
Thank you for your impact.
–Aug. 11, 2021