Greetings, Agents of Impact!
Featured: Ownership Economy
SOCAP23: From DEI to equitable wealth-building to shared prosperity. The annual SOCAP conference kicks off today in San Francisco with the promise of honest self-criticism and actionable practices around diversity, equity and inclusion. Post-George Floyd pledges have been only partially fulfilled, at best; DEI has become a lightning rod in the broader backlash against ESG, as race and justice are implicated across environmental, social and especially governance factors. “This year, we’re actually seeing a lot of that attention is waning,” says Joanna Kuang of Illumen Capital, who will kickoff the “Full Spectrum DEI” track with ImpactAlpha’s Amy Cortese at SOCAP’s opening this morning. What now? And what’s next? SOCAP’s theme, “Facing Urgency” recognizes that impact happens “at the speed of trust.” Impact investors don’t get a free pass. SOCAP planners vowed to take “a critical look at the evolving language, standards, and measurement of DEI among impact investors.” The challenge, Kuang says: “Scale strategies that work to increase diversity and also increase equity and inclusion.”
- DEI done better. Six major DEI panels will address child-lens investing, the disability wealth gap, and impact in aging. SOCAP planners aim to move the DEI discussion beyond diversity trainings and racial audits to actual equity outcomes. “Kids learn better when they see themselves in the folks that are teaching them, and for that to be true, the people at the companies that are creating [learning] products need to have diverse perspectives as well,” says Owl Capital’s Malvika Bhagwat. Changing who, what and where get investments requires diversity of thinking, says Bronze Capital’s Stephen DeBerry, whose “Eastside” TED talk has been viewed more than 1.6 million times. Changing who does the investing changes what gets funded, says Noramay Cadena of Supply Change Capital, an early-stage food investor and part of Illumen Capital’s fund of funds. Bhagwhat, DeBerry and Cadena will join David Bank for “DEI Done Well,” Tuesday at 10:30 PT.
- Predistribution. Equity, of course, means ownership as well as justice. That means not just higher wages and better benefits, but ownership stakes in businesses, in homes and commercial buildings, and in retirement and financial assets. Predistributive strategies build justice and wealth creation into the growth engines themselves, in contrast to merely redistributing wealth after it’s created, for example through taxes or charity. “If we want to have a more regenerative economy, we need a financial system at the scale of that economy,” says Taj James of Full Spectrum Capital Partners. Full Spectrum has involved Indigenous communities in the design of a global biodiversity fund with Conservation International that includes a 30% asset transfer to Native communities. “Those are returns that would otherwise go to LPs and GPs,” says James.
- Full spectrum. SOCAP’s focus on “Full Spectrum DEI” aims to take into account genders, ethnicities, orientations, abilities, generations, backgrounds, cultures, perspectives, experiences, affiliations, and work styles. Making the practice so broad may blur the focus on core issues of racial justice. The legal attacks on Atlanta-based Fearless Fund’s grant program for Black female entrepreneurs has brought the issue into sharp relief. “We got here because of generations of discrimination on the basis of race, and we cannot fix that through race-neutral programs,” Gary Community Ventures Santhosh Ramdoss tells ImpactAlpha. DEI is only the beginning. “How do we keep an eye toward liberation, which everyone deserves?” says TIIP’s managing director Monique Aiken, an ImpactAlpha contributing editor. “How can focus, collaboration and solidarity give us energy for the long walk to freedom?”
- Keep reading, “SOCAP23: From DEI to equitable wealth-building to shared prosperity,” by Amy Cortese and David Bank on ImpactAlpha.
- Connect with us. ImpactAlpha’s team will be out in force at SOCAP this week. And smile! Maura Dilley will be roaming the Yerba Buena Center for the Arts, once again looking for “SOCAP’s Best Dressed.”
Dealflow: Climate Tech
Shell’s Studio X launches cohort of early stage energy and climate tech ventures. Shell and other oil majors are increasing oil and gas production to cash in on rising prices. But they continue to hedge their bets on the energy transition. The seven startups in Shell’s Studio X cohort are developing solutions in energy storage, hydrogen compression and regenerative agriculture. Scotland’s Flexergy is developing an “ultra-efficient” system to distribute hydrogen gas and reduce energy waste. Australia’s Economical Energy is building long-duration storage for wind and solar energy. In the US, Denver-based Austere Environmental is removing petroleum-based contaminants such as jet fuel and crude oil from soils. Founders will get four months of mentorship and investments of $50,000 to $250,000.
- Catalyzing clean tech. Shell launched Studio X in 2020 with support from Boston Consulting Group’s Digital Ventures group. The Austin-based accelerator has invested roughly $3.2 million across two dozen startups. “A vast majority of the technology we need to develop for the energy transition will come from startups and their unique ability to propel change with innovative thinking and approaches,” Studio X’s Jeff Allyn told ImpactAlpha.
Pair Team clinches $9 million for value-based care and social services. US state and federal health agencies are seeking to expand access to housing, healthy foods and transportation through local health plans for low-income and vulnerable patients. In California, Pair Team is partnering with local health centers and community-based organizations to connect to patients virtually or schedule in-person visits. “As the healthcare landscape rapidly-shifts toward value-based care, which rewards providers with incentive payments for the quality of patient care, all stakeholders need to work together to prioritize inclusive, effective and patient-centric outcomes,” said Julian Eison of Next Ventures, which led Pair Team’s Series A round.
- Investing in health. Pair Team’s has over 100,000 patients on its platform. The company says it has seen a reduction in emergency room visits and depression symptoms and increased engagement from patients. “This latest financing will help us bring whole-person care to more patients across California, and soon nationally,” said Pair Team’s Neil Batlivala. Participating investors in the round include Kapor Capital, Y Combinator, Kleiner Perkins, and angel investor Jay Desai.
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Dealflow overflow. Other investment news crossing our desks:
- Harvest Thermal raised $11 million to develop thermal batteries to make heat pumps smarter, more efficient and cheaper. Brooklyn-based BlocPower is a customer (see, “BlocPower raises $154 million to decarbonize buildings in low-income neighborhoods”).
- Showroom B2B scored $6.5 million in pre-Series A funding from investors including Accion Venture Lab and Jungle Ventures to connect global manufacturers to small clothing retailers and wholesalers in India’s smaller cities. (YourStory)
- Women-focused funds managed by Quona and Sweef Capital secured investments from PayPal, part of a $100 million commitment to financial inclusion and economic development for women and girls globally. (PayPal)
- Growth Impact Fund, which is looking to raise £25 million ($30.4 million) for social impact organizations in the UK, snagged £1.8 million from the Macquarie Group Foundation and Barking and Dagenham Giving. (UnLtd)
Short Signals: What We’re Reading
👧🏻👩🏾👱🏼♀️👨🏽 The $2 billion crowd. It took five years to raise the first $1 billion on equity crowdfunding platforms, and just two years to raise the second $1 billion. More than 6,400 companies have filed to raise funds through 7,400 offerings on more than 110 registered crowdfunding portals (with a 69% success rate). (Crowdfund Capital Advisors)
📝 US companies wake up to EU climate disclosures. Starting in January, the largest American companies that raise money on European stock exchanges will have to meet the EU’s sweeping climate disclosure requirements. Thousands more companies with operations in Europe will begin reporting in 2025. (E&E News)
☀️ Economic impact of the Paris climate goals. By 2300, climate mitigation efforts that keep expected warming well below the 2-degree Celsius goal of the agreement would generate cumulative expected economic benefits of $467 trillion in present value. (Resources for the Future)
😎 Scaling sustainable fashion. As much as $400 billion is needed for next-gen materials and processing innovations to reduce carbon emissions, waste, and water usage in fashion. Project financing will be key. (Fashion for Good and Spring Lane Capital)
🌍 Nature-based solutions in Africa. The World Resource Institute’s Land Accelerator Africa selected 16 companies from a dozen African countries making everything from cosmetic products to organic fertilizer. More than half are founded by women and another half are led by young people. (World Resources Institute)
💲 Green bonds > fossil-fuel debt. Environmentally-friendly projects outraised fossil fuels in debt issuance by companies and governments in the first half of 2023. Most of the green issuances are from financial institutions, governments and utilities, rather than companies. (Bloomberg)
Agents of Impact: Follow the Talent
Kensington Corridor Trust seeks an investment and fundraising lead in Philadelphia… The Nature Conservancy is hiring a global oceans-focused senior associate director of development… REDF is recruiting a growth portfolio manager in San Francisco… Schmidt Family Foundation has an opening for an investment analyst.
Convergence is launching the 7th edition of its annual “State of Blended Finance Report,” which will feature a thematic focus on blended finance for climate, Wednesday, Oct. 25… Common Future will select 10 person of color, woman or non-binary-led organizations dedicated to bridging racial wealth gaps for its 2024 accelerator cohort. Applications are due Friday, Nov. 3.
Echoing Green is accepting applications from early-stage social entrepreneurs for its 2024 fellowship program until Thursday, Nov. 2… Female and non-binary founders can apply through Tuesday, Oct. 31 for the SVX Launchpad Entrepreneur Accelerator to connect with workshops, peers, experts, and mentors.
Thank you for your impact!
– Oct. 23, 2023