Greetings, Agents of Impact!
Signals: Ahead of the Curve
How Georgia’s civic mobilization is rallying local efforts to close the racial wealth gap. The impact of the massive voter education effort in Georgia may last well beyond today’s runoff election for two seats in the U.S. Senate. “The same effort of mobilizing people will take hold as it relates to access to capital and addressing other barriers – including in impact investing – to ensure that it’s grounded in what’s going to be impactful in the community,” Latresa McLawhorn Ryan of the Atlanta Wealth Building Initiative said on ImpactAlpha’s recent Agents of Impact Call. Atlanta ranks near the bottom of the nation’s cities in income inequality and economic mobility. Stacey Abram’s Fair Fight Action, the Georgia Coalition for the People’s Agenda, New Georgia Project, Black Voters Matter and other groups have been knocking on doors and mobilizing voters. The wealth-building initiative, originally created by the Community Foundation for Greater Atlanta and re-launched in 2017, is seeking to build on that personal agency to organize around policies and systems to redress the city’s racial disparities.
- Care economy. Issues of child care, elder care, healthcare and paid family leave are resonating for essential care workers and family caregivers – and driving votes, especially among women, who make up the majority of both groups. Political activists at Family Friendly Action, a political-action committee, and Care in Action, a sister organization of the National Domestic Workers Alliance, are putting lessons learned in the November general election to work in Georgia. “These are very core economic issues that have been marginalized and are largely unseen,” Lisa Guide of Women Effect Action Fund, which funds Family Friendly Action, told The New Yorker. Care issues are resonating in the market as well. Last year, Impact America Fund backed Boston-based CareAcademy, which provides professional development in the booming home care economy, which is growing at about 8% a year.
- Social factors. “Moving the ‘s’ in ESG from small ‘s’ to large ‘S’ – that’s the opportunity of a lifetime,” Atlanta entrepreneur and investor Donray Von said on The Call. Von moved back to Atlanta from L.A. to acquire and develop a mall in an Opportunity Zone near historically Black colleges Morehouse and Spelman and near where he grew up. “Atlanta is showing up,” he says, “I’m asking all my friends if they have voted. I’m calling my uncle, who’s paralyzed from the waist down, offering to drive him to the polls, and he tells me that he’s already been to the polls.”
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What if they threw an Arctic oil auction and no one came? The Trump administration tomorrow will unseal bids for drilling rights on more than a million acres of pristine land in the Arctic National Wildlife Refuge. But financing such drilling may be difficult. A growing number of banks, including JPMorgan Chase and Bank of America, have banned funding for Arctic drilling. That’s just one of the ways the ground has shifted since the coastal plain was opened up as part of the 2017 the Tax Cuts and Jobs Act. COVID-induced shutdowns have cratered oil prices. Producers have written off tens of billions of dollars in assets and slashed spending. Solar and wind energy costs have plummeted. And the opening of the refuge has sparked fierce opposition from environmental groups and Alaskan Natives, creating reputational risk for would-be bidders. “There is no reasonable business case for opening up new stretches to drilling,” the Sierra Club’s Ben Cushing told ImpactAlpha.
- Risky business. The hastily arranged auction, taking place in the final weeks of the administration, fulfills a longtime goal of oil producers and their political allies. Larger forces are in play as well. A key banking regulator is seeking to forbid banks from refusing to lend to any sector, whether guns, private prisons or oil, in effect forcing them to lend to risky businesses. CERES’ Steven Rothstein called the proposed Fair Access to Financial Services rule “an outrageous last-ditch attempt to obstruct progress to address climate change as a systemic financial risk.”
- Lackluster demand. The Trump administration hoped to raise some $1 billion from the auction to help offset its tax cuts for corporations and the wealthy. That now looks like a pipe dream. The minimum bid per acre is set at $25. With low demand expected, Alaska’s economic development arm, the Alaska Industrial Development and Export Authority, may spend $20 million to secure leases and partner with drillers.
Dealflow: Follow the Money
Ivanhoe Capital SPAC targets $200 million for sustainable mining and clean energy. Hot financing tool, meet an emerging sustainability sector: mining. Vancouver-based Ivanhoe Capital is, a new SPAC, or special purpose acquisition company, is looking to raise $200 million to invest in companies supporting “the electrification of industry and society,” Bloomberg reports. The blank-check company, launched by mining sector billionaire Robert Friedland, will target opportunities from “mine site to the end user” including metal mining and refining companies, as well as battery and electric vehicle producers and e-transport ventures, according to an SEC filing.
- Responsible mining? The mining industry is seeking to shed its reputation for environmental destruction and human rights violations – and highlight demand for lithium and other minerals needed for electric vehicles and smart phones. Initiatives including the Alliance for Responsible Mining and Canada’s Towards Sustainable Mining are working to improve standards, transparency and accountability. The global push to “electrify everything” will add new pressures as demand for high-value metals grows.
- It’s complicated. Friedland’s Ivanhoe Mines, a developer of large-scale mining projects in Africa, has been embroiled in controversy over worker conditions and its COVID-19 lockdown response. The company denies allegations by Amnesty International and Human Rights Watch and touts the safety record of its Kamoa-Kakula Project, a copper mining operation in the Democratic Republic of the Congo. Ivanhoe says it is committed to aligning its operations with the U.N. Sustainable Development Goals and ensuring that “better long-term, sustainable benefit is derived from the African nations’ natural resources through the creation of a social compact between government, labour, business and communities.”
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AMP Robotics scores $55 million for waste management robots. The Colorado-based company designs artificial intelligence-based robotics that automate waste sorting and divert recyclable waste from landfills. XN led the Series B round, with backing from Valor Equity Partners and Google’s venture arm, GV. Existing investors Closed Loop Partners, Sequoia Capital, Sidewalk Infrastructure Partners and Congruent Ventures also participated.
- Auto-recycling. In December, London-based Recycleye raised $1.5 million for its AI-powered waste-sorting robots.
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Kenyan ‘neo bank’ Umba secures $2 million. Financial inclusion efforts in Africa have been dominated by mobile money payment and transfer services and alternative credit apps. Now, neo-banks like those emerging in Europe and Latin America are entering the market (see, “Helping small businesses in emerging markets survive and thrive in 2021”). Kenya’s Umba offers free checking, savings and money transfer services in Kenya and Nigeria. Umba’s seed round was backed by Ludlow Ventures, Frontline Ventures, Act Venture Capital as well as former Stripe executive Lachy Groom. More.
India’s PadCare Labs secures early funding to recycle menstrual products. The Pune-based startup wants to curb landfill disposal of sanitary napkins through specially-designed recycling facilities. It raised pre-seed funding from the Indian government’s Biotechnology Industry Research Assistance Council, which backed the startup from its LEAP Fund for new technologies.
Agents of Impact: Follow the Talent
Jim Sorenson of Sorenson Impact Foundation joins the board of the Economic Innovation Group… Irv Bailey of Chrysalis Ventures and Deven Parekh of Insight Partners join the board of the U.S. International Development Finance Corp… Octobre’s Sylvain Goupille joins Green Investment Partners as a non-executive director… LOCUS Impact Investing seeks an executive director for its Community Investment Guarantee Pool… Maycomb Capital’s Community Outcomes Fund is looking for an investment analyst in New York.
Thank you for reading!
– Jan. 5, 2020