Greetings! Thanks to the hundreds of Agents of Impact who joined yesterday’s policy Call. Coming up Tuesday, Mar. 8: “Operationalizing impact and ESG inside the enterprise,” with Cathy Clark of Duke’s Fuqua School of Business. Stay tuned.
Featured: Returns on Inclusion
Investors find untapped opportunities at the intersection of gender and justice. Some of the funds are run by women of color seizing overlooked market opportunities with lived experience and cultural insight. Others are run by white managers who understand the power of diversity. The most recent Project Sage survey of more than 200 gender lens funds found that nearly half also had a racial lens, up from less than one-quarter in 2018. The rise of such “intersectional venture funds,” says Suzanne Biegel of GenderSmart Investing, reflects “an increasingly sophisticated understanding of equity, diversity, inclusion and justice.” In a new toolkit, GenderSmart rounds up the emerging principles and practices of investing for justice, equity, diversity and inclusion, or JEDI. Says Biegel, “Together, these fund managers are bringing a diversity and experience to their investments that is missing from the investment ecosystem as a whole.”
- Intersection and intention. Canadian pension fund manager CDPQ’s C$250 million (US$200 million) Equity 25³ fund backs tech companies committed to recruiting women, minorities and Indigenous peoples as board directors, executives and shareholders. In New Zealand, Brightlight Impact’s Te Puna Hapori infrastructure debt fund leaves ownership of housing, water and healthcare infrastructure with Maori communities. The impact-first investment strategy of Seattle-based Global Partnerships considers gender, geography, race and ethnicity, as well as poverty, as drivers of exclusion in Latin America, the Caribbean and sub-Saharan Africa.
- Power dynamics. Impact targets of the intersectional funds range from reaching diverse and first-time fund managers, to closing wealth gaps, to building more inclusive value chains. “The way it shows up will depend on how you come in,” GenderSmart’s Sana Kapadia tells ImpactAlpha. Investors in the Global North may focus on racial diversity; those in the Global South may prioritize local founders or historically excluded groups. The best strategies examine gender across dimensions of race, class and ethnicity, according to the toolkit, and address power dynamics across gender, racial, and socioeconomic divides.
- 22 in ‘22. Biegel last month put a gender lens on ImpactAlpha’s annual lookahead, annotating our five broad themes of The Reconstruction, Emerging Markets, Climate Finance, Catalytic Capital, and Capitalism Reimagined. She encouraged investors to ask themselves “where the opportunities are to bring a gender lens to investments that don’t already have them, and what new investments you could make to bring a gender lens to your portfolio.”
- JEDI. Join the GenderSmart Investing team for the launch of the “Justice, Equity, Diversity and Inclusion” toolkit today at 11am ET. Register now.
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Dealflow: Low-Carbon Transition
Microsoft’s climate fund backs Leko Labs’ low-carbon wood for construction. Building materials and construction account for 11% of annual global greenhouse gas emissions (operations represent an additional 28%). Luxembourg-based Leko aims to replace steel and concrete with sustainably-sourced wood in homes, apartment, office buildings, industrial warehouses and data centers. Leko says its wood composite can be used for buildings reaching 330 feet, and its insulated wooden walls can cut heating and cooling costs by up to 87%.
- Low-carbon transition. Leko’s $21 million Series A round was led by 2150, a European urban sustainability fund that looks for companies with potential to reduce carbon emissions by a gigaton per year. Leko is scaling up to supply real estate partners in Germany, the U.K. and the Nordics.
- Decarbonize everything. Already this year, Microsoft’s billion-dollar Climate Innovation Fund has backed Brooklyn-based BlocPower to retrofit old city buildings, and Providence, R.I.-based Utilidata, which aims to digitize and decarbonize the electric grid.
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MarketForce raises $40 million to digitize Africa’s small retailers. Around 95% of retail transactions in Africa are done in cash. Nairobi-based MarketForce is aiming help one million retailers in Africa digitize their transactions. “Our goal is to be the ultimate partner for informal merchants, empowering them to maximize their profits and grow in a digital age,” said MarketForce’s Tesh Mbaabu (for context, see “New channel of capital for small businesses worldwide: enterprise tech startups“). The company operates RejaReja (Swahili for “retail”), a business-to-business marketplace that helps informal and small retailers procure food products and other essentials. With its acquisition of Digiduka last year, MarketForce offers retailers bill payments, money transfers and other services. Retail payments on the continent are projected to exceed $2.1 trillion by 2025.
- Africa expansion. MarketForce is expanding into Uganda, Tanzania, Rwanda and two countries in West Africa, and it will offer buy-now, pay-later financing options for merchants. Nigeria’s V8 Capital Partners led the Series A round. Ken Njoroge of Africa payments firm Cellulant participated in the round and will join MarketForce’s board as chairman.
- Check it out.
Dealflow overflow. Other investment news crossing our desks:
- EQT Infrastructure acquires InstaVolt, a U.K.-based operator of electric-vehicle charging stations, to grow its network of EV chargers.
- Revent secures $68 million to invest in early-stage European companies in health and wellbeing, economic empowerment, sustainability and the future of food.
- Zoomo raises $20 million to make light electric vehicles, including e-bikes and e-mopeds, for delivery workers and large fleet operators.
- Slate Asset Management launches an infrastructure impact investment fund focused on the energy and low-carbon transition.
Agents of Impact: Follow the Talent
La June Montgomery Tabron of the W.K. Kellogg Foundation joins TIAA’s board of trustees… Christian Schmid, ex- of Queensland Investment Corporation, will lead a new impact infrastructure strategy at Slate Asset Management… Adasina Social Capital has openings for an investment strategist and an investment operations analyst… Sunwealth is looking for a senior project finance associate in Cambridge, Mass.
The Bridgespan Group seeks an impact investing manager… The Bill and Melinda Gates Foundation is hiring a senior advisor for the private sector in Delhi… Impact Investment Exchange seeks an associate in Hanoi, Vietnam… Dalio Family Office seeks an associate director of operations for Dalio Education in Greenwich, Conn… Global Partnerships is hiring a credit operations officer in Seattle.
JPMorgan Chase is looking for a program manager for Force for Good Americas in Jersey City, N.J… Blue Earth Capital is recruiting a head of funds and co-investments in London… WaterEquity seeks a director of climate impact… S&P Global is hosting “Beyond ESG: Empowering the Black Community for the Future of Work,” today at 10am ET.
Thank you for your impact.
– Feb. 23, 2022