The Brief | June 10, 2021

The Brief: Global access to vaccines, electric batteries, student-run impact funds, Adobe Capital acquisition, confronting income inequality, alt-capital

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Greetings, Agents of Impact! 

Featured: Vaccine Equity

Linchpin of Gates Foundation’s health strategies, ‘global access agreements’ fail their COVID-19 test. Legal agreements between the Bill and Melinda Gates Foundation and private biotechnology companies were supposed to be the great equalizer between rich and poor in the high-risk, high-cost world of drugs, vaccines and therapeutics. The Global Access Agreements require recipients of Gates Foundation funding to provide low-income countries with affordable access to drugs, vaccines and other health innovations. Included with all grants and investments in the foundation’s multi-billion dollar portfolio of pharmaceutical, biotech and public health ventures, the agreements are central to the foundation’s strategies around neglected diseases and pandemic readiness – and to the charitable purpose of such investments that is required by tax laws. When it came to securing affordable global access to life-saving COVID vaccines, the foundation’s Global Access Agreements appear to have failed their biggest real-world test. Because the foundation’s biotech commitments pre-dated COVID-19, a foundation spokesman told ImpactAlpha, the agreements “do not cover COVID-19 infection as a target condition.” 

The foundation has allocated $1.8 billion in additional funding for the COVID-19 response, and its decades of investments in pharmaceutical and biotechnology companies have laid the groundwork for the historic sprint to develop effective vaccines. Those investments include large equity stakes in CureVac and BioNTech, and grants to Moderna. The foundation is also a major backer of the Coalition for Epidemic Preparedness Innovations, or CEPI, which has provided funding to at least nine vaccine efforts. For months, the Gates Foundation’s inability or unwillingness to use the Global Access Agreements to help broker deals with vaccine suppliers to supply doses at affordable prices undermined the effectiveness of COVAX, the Gates-backed U.N. buyers’ club that was meant to secure vaccine doses for 91 low- and middle-income countries. Leaders of the G7 industrialized nations meet this weekend in Cornwall, U.K., to patch together a backup plan for vaccinating the global population. For now, equitable and affordable global access remains a promise unfulfilled.

Keep reading, “Linchpin of Gates Foundation’s health strategies, ‘global access agreements’ fail their COVID-19 test,” by David Bank and Dennis Price on ImpactAlpha.

Dealflow: Electrify Everything

Battery manufacturer Northvolt raises $2.8 billion to expand gigafactory in Sweden. The Stockholm-based company says it has secured $27 billion in contracts with customers, including a $14 billion partnership with Volkswagen to supply lithium-ion batteries for electric vehicles in Europe. Northvolt said it will use its latest round of financing to expand a gigafactory from 40 to 60 gigawatt-hours of annual capacity to meet the growing demand. Northvolt’s bigger goal: to build two new gigafactories in Europe by 2030 with 150 gigawatt-hours of annual capacity. The company is looking to source half of its raw materials for new batteries from recycled batteries over the next decade.

  • Battery tech. Global investors are stepping up to deliver green batteries, which will be key to power the projected 145 million electric vehicles that could hit the road by 2030. Solid Power raised $130 million to develop solid-state batteries; Clean Energy Ventures backed battery tech startup pair Volexion and Nth Cycle; solid-state lithium-metal battery maker QuantumScape raised $680 million via a reverse merger with a special purpose acquisition company, or SPAC.
  • Institutional capital. Northvolt has raised $6.5 billion to date. The latest round was co-led by Swedish pension funds, AP1, AP2, AP3, AP4, and Canada’s Ontario Municipal Employees Retirement System. Also participating were Goldman Sachs Asset Management, Volkswagen Group and Norrsken VC.
  • Plug in

Harvard Business School students’ impact fund secures $200,000 to back BIPOC-led small businesses. Nearly $70 million, or 10% of assets in 40 student-managed investment funds have a sustainable investing strategy, according to the Intentional Endowments Network (see, “Next-gen talent is the winner at MIINT competition and Sustainable Investing Challenge”). Harvard Business School’s student vehicle, structured as a donor-advised fund with ImpactAssets, is looking to help Massachusetts businesses led by Black, Indigenous and other people of color recover from the financial impacts of COVID-19. The fund’s first deal is a $25,000 investment in Casabe Fruit Store & Delicatessen, a corner store in Lawrence, Mass. that is owned by a Latina immigrant.

  • Talent pipeline. The Harvard MBA students launched the fund earlier this year and split into deal teams that scout investments, perform due diligence, and report to an investment committee that includes faculty members and alumni like Boston Foundation’s Stephen Chan and Greg Shell of Bain Capital Double Impact.
  • Check it out

Dealflow overflow. Other investment news crossing our desks:

  • Alexis Ohanian’s Seven Seven Six, Nomo Ventures, McCain Foods, Imaginary Ventures, Day One Ventures and others invest $50 million in faux-chicken maker Simulate.
  • Apollo Projects backs Terraformation’s targeted $30 million funding round to scale ecosystem restoration.
  • Melbourne-based solar-plus-storage developer RayGen Resources raises $27 million AUD ($21 million USD) from AGL Energy, Photon Energy,  Schlumberger and Chevron.
  • Bangalore-based Refyne raises $16 million from DST Global and RTP Global to help workers access their earned wages (see, “Abhi raises $2 million to help Pakistani workers access earned wages”).
  • Kenyan solar startup Pawame secures $2.5 million in grants and equity.

Impact Voices: Alt-Finance

Alt-financing tools help early impact enterprises build a track record. A small but growing set of “alt-finance” providers are developing creative capital tools to help founders launch, grow and retain control of their businesses and their impact. In an excerpt from Adventure Finance, Aunnie Patton Power cites examples like Prime Impact Fund, which uses recoverable grants from foundations and other donors to make early equity investments in climate technologies. Beneficial Returns makes below-market-rate loans to high-impact emerging markets businesses. The People’s Fund crowdfunds capital to offer trade financing to South Africa’s Black-owned businesses. “Timely capital to bridge operational and working capital gaps can be critical for business continuity and the achievement of social objectives,” Patton Power writes. “There are ways that alternative lenders and impact investors can help them.” Dive in

  • Tune in. Patton Power joins Impact Entrepreneur’s Laurie Lane-Zucker for an online chat today at 9am PT / 12pm ET.

Nine ways investors can confront income inequality. There’s as yet no equivalent to “net zero” for the reduction of income inequality, but the systemic risks posed by the income gap are no less real than those of climate change. Excessive income inequality “slows economic growth, leads to more frequent and deeper recessions, limits upward mobility, aggravates social cohesion, and exacerbates political polarization,” The Investment Integration Project, or TIIP, writes in “Confronting Income Inequality. “It is a systemic risk that cannot simply be diversified away.”

  • Action agenda. The report recommends ways that investors can address income inequality, from calling for pay equity to requiring standardized disclosure of labor-related data and pushing boards to consider workers in compensation and benefits policies.
  • Living wage. A collaborative of 15 financial institutions have adopted the Platform Living Wage Financials to encourage garment, footwear, food and other companies using manual labor to offer pay that covers basic living expenses.
  • Collect the whole set.

Agents of Impact: Follow the Talent

Canadian asset manager Deetken Impact acquires Mexico City-based Adobe Capital from New Ventures Mexico. Adobe’s Erik Wallsten will join Deetken as a partner… New Island Capital is looking for a managing director of private credit, a managing director of private equity, and a vice president of real estate in San Francisco… Inclusive Prosperity Capital is recruiting a chief investment officer in New York or Hartford, Conn.

Illumen Capital is looking for a bias-reduction intern in Oakland… BlueMark seeks a business development associate… Tideline and BlueMark are looking for an executive assistant… Acumen seeks an investment associate and a partnerships associate in San Francisco… Sustainable Capital Advisors is hiring a senior analyst of ESG engagement in Washington, D.C.

Reuters is hosting “ESG Reuters North America,” June 15-17… Global Impact Investing Network is hosting “Next Normal Now – Climate Action,” with Rohit Sipahimalani of Temasek, Prime Coalition’s Sarah Kearney, Credit Suisse’s James Gifford and others, Wednesday, June 16… Harlem Capital is hosting “Juneteenth: Building Together,” with MaC Venture Capital’s Marlon Nichols, Impact America Fund’s Kesha Cash, Kindred Ventures’ Kanyi Maqubela, Collab Capital’s Barry Givens and Mandela SH Dixon, Friday, June 18.

Thank you for your impact.

– June 10, 2021