Greetings, Agents of Impact!
Featured: Gender Alpha
Through a gender lens in Latin America, investors see opportunities for impact and alpha (videos). The women of Comuna 13, a sprawling neighborhood in the hills above downtown Medellín, turned to graffiti art, hip-hop music and street performances to combat violence and corruption – and transformed the dangerous enclave into one of Colombia’s most vibrant cultural hubs. Such narrative reclamation and economic transformation is the promise of the GLI Latam Forum, this year in Medellín (ImpactAlpha is the media partner of the GLI Forum Impact). Nonprofit Pro Mujer organized the convening, now in its fourth year, to showcase the social and economic power of investing in, and investments led by, women in Latin America. “Investing in women, without a doubt, will create a virtuous cycle that is unstoppable,” said Pro Mujer’s Carmen Correa. “We want more investors coming into Latin America, investing with a gender lens,” Correa told ImpactAlpha (watch ImpactAlpha’s interview with Correa).
- Family affair. Latin America’s range of gender-lens investment products reflects the growing appetite from local investors. Correa counts some three dozen gender-lens funds in the region. Rodrigo Villar and Daniela Pacheco’s new Empodera360 fund, for example, will use revenue-based finance and venture debt to help women-led ventures expand health access to women across the region. “I didn’t know there were so many products,” Maria Hollan, a next-gen impact investor at Timke Ventures, a Mexico-based family office, told ImpactAlpha on video (watch the interview). When wealthy Latin American families “want to do impact, they want to do it in the region,” says Hollan. Bonus: Watch ImpactAlpha’s interview with The Impact’s Linda Rincón on the increasing appetite for impact investing at Latin American family offices.
- Product diversity. Microwd, a Madrid-founded fintech company with operations in a half-dozen Latin American countries, lends exclusively to women. Women borrowers, who have made the company profitable, are “social drivers” in their communities, says founder Alejandro De León. “The market is huge and increases every year,” León told ImpactAlpha. Tech has transformed the types of businesses women can build once they have access to capital. “Before it was only cows and pigs,” says León. “Now it’s also apps, delivery and restaurants.”
- Impact bonds. With two gender bonds issued this year, Pro Mujer has tapped Argentina’s capital markets to finance women entrepreneurs. Banco Davivienda, Colombia’s second-largest bank, issued a $100 million gender-linked bond last year. A “diversity and inclusion social bond,” issued in August by Ecuadorian savings and credit cooperative Jardín Azuayo, will support lending to women and low-income entrepreneurs.
- Climate + gender. Investments in women drive the care economy, reproductive health, climate friendly agriculture, and equitable development in communities significantly impacted by climate change. “As we are talking about the energy transition the world is undergoing, as we think about the new economy that is being unleashed, the clean economy,” says Nisha Biswal of the US International Development Finance Corp., “we need to make sure that the economy is an inclusive one.” (Watch our interview with Nisha Biswal.)
- Keep reading, “Through a gender lens in Latin America, investors see opportunities for impact and alpha,” by Dennis Price. Video production by Cesar Chavez.
Dealflow: The Transition
Skoon Energy raises $5.6 million for clean generators in Europe. Film sets, festivals, construction sites and other temporary setups depend on reliable energy access—mostly from fossil fuel-guzzling generators. Netherlands-based Skoon wants such users to switch to mobile solar fields, advanced batteries, and electric and biofuel generators. The company operates a marketplace for backup energy systems, connecting companies and organizations with more than 150 clean energy suppliers. Its energy management software lets providers share short-term reserves to help grid systems balance supply and demand. Skoon’s energy buyers include the Netherlands’ Ministry of Defence, the Port of Amsterdam, and Swedish energy company Vattenfall.
- Series A investors. Skoon “connects hard-to-electrify use-cases with innovative suppliers, reducing reliance on fossil fuels and improving overall grid stability,” said Carolin Funk of Blue Bear Capital, which led the equity round. Netherlands-based Graduate Entrepreneur Fund, which invests in Rotterdam and Delft university alumni’s companies, also invested.
- Clean energy subscriptions. Separately, Sweden’s Cloover raised €7 million ($7.4 million) in equity to help providers of solar, battery storage, EV charging and heat pumps offer their systems on a subscription basis to businesses and individuals. That could reduce the upfront capital burden of clean-energy conversions and give energy system providers reliable cash flows.
Austria’s Inoqo helps grocery stores report Scope 3 emissions. Here comes Scope 3. For grocers, 90% of their carbon emissions stem from the products they stock and sell. Long and complex supply chains make the environmental footprint of individual products hard to trace. Inoqo’s AI-based software is helping grocers map and manage their Scope 3 emissions by estimating products’ environmental impact using available, if inexact, data. Inoqo raised an undisclosed amount of funding from Triple Impact Ventures, family offices and angel investors.
- How it works. Inoqo’s product assessments are based on ingredients’ likely countries of origin, production process, packaging and transportation. The assessments provide conservative estimates until more specific product information becomes available. Inoqo started as a consumer-facing service, then shifted its focus to retailers, like Norwegian online grocer Oda.
- Share this post.
Dealflow overflow. Other investment news crossing our desks:
- Bogota-based Bia raised $16.5 million for its smart energy meter that helps more than 1,500 businesses in Colombia manage their energy consumption. (Forbes Colombia)
- Women’s health startup Allara secured $10 million in a round led by GV to provide virtual care to women dealing with chronic hormonal conditions. (Allara Health)
- Lithuania’s HeavyFinance clinched €1 million ($1.1 million) to allow both retail and large investors to provide loans to farmers switching to regenerative practices. It provides returns to lenders by selling carbon credits generated by the farms. (Arctic Startup)
Signals: Community Solar
How the IRA’s ‘direct pay’ provision is driving community ownership and resilience. Baltimore officials and clean energy leaders gather this week to celebrate the opening of the first “resilience hub” in Maryland. At City of Refuge, a faith-based organization in Baltimore, the hub is outfitted with solar panels and battery storage. That will free up money for community services, and create a safe place for vulnerable residents and backup power during outages or extreme weather. The wave of such community-owned projects are a function of the “direct pay” provision in the Inflation Reduction Act that allow nonprofits like City of Refuge and other tax-exempt entities to sell the law’s tax incentives to companies with tax liabilities. “Direct pay is among the most important policy tools the IRA delivers to build an equitable and economically-inclusive clean energy economy,” Michelle Moore and Elvis Moleka of Groundswell, a nonprofit solar developer working in low-and moderate income communities, write in a guest post on ImpactAlpha. In City of Refuge’s case, the tax rebates cover one-third of the $500,000 project cost. The remainder was financed by local reimbursable grants.
- Community lenders. Other IRA incentives encourage an inclusive clean energy economy. The Low-Income Communities Bonus Credit Program, known in government lingo as “48e,” offers an additional 10% or 20% bonus to the solar tax credit for projects located in, or that serve, underinvested communities. Under IRS rules, the value of the solar tax credit and any bonus credits are paid out after a project is completed. That means tax-exempt entities seeking to use direct pay need to secure financing for up-front predevelopment and construction costs. Rochdale Capital provided a $500,000 loan for City of Refuge’s up-front costs. “Community development financial institutions and other community-based lenders will be important partners in providing the financing nonprofits may need,” the authors write.
- Read the full post.
Agents of Impact: Follow the Talent
Don’t miss SOCAP23, Oct. 23-25 in San Francisco. Use the code s23_impactalpha to save $250.
ImpactAlpha’s David Bank will moderate “American Democracy: A new investment imperative for impact investors,” Wednesday, Oct. 25 in San Francisco… Christopher George, ex- of Abt Associates, joins Social Finance as corporate controller… Ownership Works promotes Sarah Shoup to executive and operations associate… Wells Fargo is on the hunt for an equity optimization and social impact investing director in Charlotte… Phillips Foundation is looking for a part-time impact investing advisor.
Social Finance has an opening for a senior associate of impact finance operations in Boston… Halcyon is recruiting a finance and bookkeeping manager in Washington, DC… Mast Reforestation is hiring an investment analyst in the greater Seattle area… Advantage Capital is looking for a renewable energy analyst in New York… Accion seeks a Bogota-based global investments officer.
Thank you for your impact!
– Oct. 19, 2023