The Brief | August 23, 2022

The Brief: Gender mindset shift: women in agriculture and as investment decision-makers, Black-led businesses, Nigeria’s micro-traction, motorbike finance

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Greetings, Agents of Impact!

Featured: Gender Smart

Mindset shift. The 2X Collaborative has its roots in a 2018 pledge by development finance institutions to deploy $3 billion for gender-lens investments. The group tallied more than $7 billion in such investments by the end of 2020 – and quickly pledged to put out another $15 billion by the end of this year to support women as entrepreneurs, leaders, employees and consumers. “Yes, we’ve started to get traction,” says Suzanne Biegel of GenderSmart, which is merging into the 2X Collaborative later this year. The next step is to ensure that gender considerations are embedded across investment processes and strategies. “That it’s deep and not just ‘Look, we invested in one gender lens fund,’ or ‘Look, we got a woman on the board,’” Biegel tells ImpactAlpha. “Now, we need a mindset shift, and we need a commitment to really act.”

  • From traction to transformation. That’s the theme of GenderSmart’s gathering of fund and asset managers and other capital allocators in London, October 18-19. The summit will bring together leaders like Beacon Fund’s Shuyin Tang and Yen Do, Women of the World Endowment’s Patience Marime-Ball, and Tara Health Foundation’s Ruth Shaber, who share their perspectives in today’s pair of guest posts on ImpactAlpha. 

Sustainable agriculture needs more investment in women at the top – not just the bottom – of the pyramid. Advancing sustainable agriculture is key to ending poverty, zero-hunger and other Sustainable Development Goals. This can’t be done without women, who make up more than 40% of the agricultural workforce and produce the majority of food in emerging markets. Research and capital have focused on women at the bottom of the economic pyramid (think microfinance institutions and farming cooperatives). “Investing in the women at the top of the pyramid is our best bet,” argue Tang and Do of gender-lens investment firm Beacon Fund, which launched out of Patamar Capital. Women hold only 14% of management positions in the agriculture sector and receive only 7% of investment. “Empowering them will have ripple effects all the way down,” the authors write.

  • Case in point. At Beacon’s portfolio company Hoa Nang Organic, an organic rice company in Vietnam, female CEO Dang Thi Truong An has applied a gender-lens to the company’s customer base, its suppliers and to talent within the company. She’s also investing in the skills of next-generation female leaders and providing English language training. Tang and Do see companies like Hoa Nang “as a proof of concept that we can make the investment system work better for women-led businesses, even in a difficult sector like agriculture.”
  • Keep reading, “Sustainable agriculture needs more investment in women at the top – not just bottom – of the pyramid,” by Beacon Fund’s Shuyin Tang and Yen Do on ImpactAlpha.

Don’t panic. Include more women as decision-makers. Inflation, geopolitics and a looming recession have clouded the economic outlook (stocks sunk yesterday as investors awaited the Federal Reserve’s moves from Jackson Hole, Wyo.) Who can lead in such unsettled times? Women, argue Marime-Ball and Shaber, coauthors of The XX Edge: Unlocking Higher Returns and Lower Risk. “Women are more likely to invest in long-term health and sustainability and less likely to chase short-term gains,” they write. A growing body of research has shown that having more women in decision-making roles improves performance (listen to Marime-Ball on ImpactAlpha’s podcast, “Delivering higher returns and stronger impact with ‘The XX Edge’”).

  • Investing for change. Marime-Ball, of Women of the World Endowment, and Shaber, of Tara Health Foundation, have focused on mission-aligned investments that “center women and underrepresented communities in positions of leadership and in driving innovation to address global issues.” WoWe has invested in the female-led Urban Innovation Fund. Tara Health is an anchor investor in RH Capital, a Rhia Ventures fund for early-stage ventures in reproductive and maternal health.
  • Keep reading, “Don’t panic. Include more women as decision-makers,” by Patience Marime-Ball and Ruth Shaber on ImpactAlpha.

Dealflow: Returns on Inclusion

Ally Financial commits $30 million to celebrate Black Business Month. Black entrepreneurs Frederick E. Jordan and John William Templeton first dubbed August as Black Business Month in 2004 to highlight and empower Black founders like themselves. Two decades later, many of the challenges faced by Black founders persist, but a shift is underway (see, “Seven ways finance has changed in the year since George Floyd’s murder”). In recognition of Black Business Month, Ally Financial invested $30 million in L.A.-based SoLa Impact and Atlanta’s Fearless Fund. “Black-owned businesses are the backbone of many communities throughout the country,” said Ally’s Diane Morais. “To succeed, they need capital and, when it comes to access to that capital, we know representation matters.”

  • Black fund managers. SoLa Impact secured $25 million for its Black Impact Fund, which is investing in affordable housing in Black and Brown communities in the U.S., particularly in South L.A. The fund has secured commitments from investors including PayPal, Equitable and the California State Teachers’ Retirement System. Fearless Fund, launched by three Black women in 2020 to invest in high-growth ventures run by women of color, will receive $5 million. Earlier this month, Cornerstone VC, a Black-led venture fund in London, secured €20 million ($23.5 million) to invest in up to 40 Black and other underrepresented founders in the U.K.
  • Black founders. Black woman-led Incredible Health last week raised $80 million, at a valuation of $1.6 billion, to help nurses succeed in permanent jobs. Also last week, Black-led Brown Venture Group secured $1.5 million from the Bush Foundation to invest in Black, Latinx and Indigenous tech founders. Black women-led Clutch earlier in August raised $1.2 million, led by Precursor Ventures, to build a digital marketplace for content creators of color.
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​​Nigeria’s Microtraction inks $15 million for second early-stage fund. The Lagos-based venture firm launched with $1 million in 2017 with a Y Combinator-approach to investing in African tech startups: it cut a $25,000 check for a 7% stake in very early-stage companies. The firm’s second fund is increasing the check size to $100,000 for the same stake, TechCrunch reports. The fund will have the ability to make follow-on investments of up to $350,000. “There’s a lot of first checks available” compared to five years ago, said Microtraction’s Kwamena Afful. “We now think, beyond the first check, founders need a community of champions to support them in growing their business.” Microtraction’s second fund is backed by entrepreneurs from its first fund, including Cowrywise’s Razaq Ahmed and 54gene’s Francis Osifo, as well as a16z’s David Haber, Y Combinator’s Michael Seibel, 776’s Alexis Ohanian and others.

  • Portfolio growth. Microtraction has made nearly 40 investments. It was one of the first investors in 54gene, a Nigerian genetic testing and biotech company that has gone on to raise $45 million. It also backed wealth management app Cowrywise and education finance venture Schoolable (formerly Allpro). Microtraction’s founders say portfolio companies have raised more than $100 million in follow-on funding. “We’re trying to provide the same value as Y Combinator but with a better understanding of the African market, which can help a founder raise better and build more sustainable businesses,” said Microtraction’s Dayo Koleowo.
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Dealflow overflow. Other investment news crossing our desks:

  • Australia’s Palisade Impact raised A$400 million (US$275 million) for an open-ended fund that invests at the intersection of infrastructure and decarbonization.
  • Groundwork BioAg secured $18 million in a round led by Climate Innovation Capital to produce fungi that can enhance the growth of plants, fruits and vegetables sustainably.
  • South Africa’s Verdant Capital invested $7 million in Watu to finance motorbike taxis for financially underserved drivers in Uganda.

Agents of Impact: Follow the Talent

Diana Madson, ex-of Hua Nani Partners, joins Bloomberg Philanthropies to lead its Beyond Carbon initiative… Macquarie Asset Management seeks an associate director in San Francisco… Confluence Philanthropy seeks a communications and development senior manager in New York… BlackRock is hiring a sustainable investing research and strategy associate/vice president. 

Singapore-based Temasek signs the Operating Principles for Impact Management… LP First Capital launches Ripple Learning to address the blue collar workforce gap… Community Impact Fund in Great Barrington, Mass., is accepting applications for community projects through Friday, Sept. 30… Nearly three dozen women entrepreneurs from nine African countries have completed Ecobank’s leadership training program. 

Thank you for your impact!

– Aug. 23, 2022