Greetings, Agents of Impact!
🌍 Call No. 34: Financing growing businesses. Crypto and crowdfunding. Neobanks and nonbanks. Fintech and enterprise tech. Join entrepreneurs and investors who are developing new channels of financing for small and growing businesses in Africa, Asia and Latin America, Tuesday, Nov. 16 at 8am PT / 11am ET / 7pm Nairobi. RSVP today.
- Live from Nairobi. Meet Pezesha’s Hilda Moraa, who matches small businesses with lenders and unlocks working capital with better data on operations and performance. Agent of Impact.
Featured: Agents of Impact Podcast
Solving for both unemployment and labor shortages with high-quality jobs. It’s one of the paradoxes of the pandemic era. Across the U.S., more than 10 million jobs are unfilled at the same time that nearly eight million people remain unemployed. “I would call it a market failure,” Rachel Korberg of the Families and Workers Fund says on the latest Agents of Impact podcast. “It’s not that there aren’t enough people who want to work. It’s that there aren’t enough good quality jobs that people really want to go back to and have trust in.” The Families and Workers Fund launched last month with $51 million as a five-year philanthropic collaborative of nearly two dozen funders, co-chaired by Darren Walker of the Ford Foundation and Eric Braverman of Schmidt Futures.
The Families and Workers Fund’s two priorities are the modernization of antiquated public-benefits systems, particularly unemployment insurance, and the promotion of high-quality jobs that provide economic security and mobility through decent wages, benefits, training and working conditions. In Texas, Better Builders, a project of the Workers Defense Project, works with city governments to speed permit approvals for builders who meet standards for fair pay, job safety and hiring practices. The fund supported New America to develop a playbook for states seeking to fix their unemployment insurance systems. “This is a crisis. But this is also a once in a generation opportunity for change,” said Korberg. “It seemed like philanthropy really needed to serve and be a place to support innovation and leadership on a more equitable recovery.”
Listen to David Bank’s conversation with Rachel Korberg of the Families and Workers Fund, “Solving for both unemployment and labor shortages with high-quality jobs,” on ImpactAlpha’s Agents of Impact podcast. Catch up on all of ImpactAlpha’s podcasts, including the weekly Impact Briefing and The Reconstruction.
Series: Optimizing for Impact
Three steps for managing impact on the Sustainable Development Goals (video). What happened? Why did it happen? And what will you do next? This week’s short video from the new Coursera course, “Impact Measurement and Management for the SDGs,” developed by CASE at Duke and the U.N. Development Programme, guides investors in managing and optimizing impact data. “We delineate what you do with positive and negative deviations from your plan,” writes Duke’s Cathy Clark. “The goal is to serve up actionable decisions that represent good management of impacts based on the meaning you make of the data.” Get curious.
- Back to school. Catch up on Clark’s other favorite videos from the course: “Develop a data-for-decision-making mindset,” “Assign an ABC goal type to each investment,” “What are the five dimensions of impact?” and “Where are you on your impact management journey?”
Dealflow: Follow the Money
Twiga Foods secures $50 million to supply informal retailers in Africa. The Nairobi-based logistics company is “building a one-stop-shop for informal retailers and all their needs,” says Twiga’s Peter Njonjo. The Series C funding, led by French family office Creadev, will help the company expand in East and West Africa. Creadev’s Pierre Fauvet said Twiga has “potential to revolutionize informal retail across sub-Saharan Africa.”
- Growth capital. Twiga has raised $110 million since 2014, including a $23 million Series B round led by Goldman Sachs in 2019. Participating investors in the new round include TLcom Capital, IFC, DOB Equity, Endeavor Catalyst Fund, Goldman Sachs spinoff Juven and Finnish development finance agency Finnfund.
Brazil’s Memed scores $17.8 million to scale medical e-prescriptions. Memed’s software is used by 150,000 doctors and 200 hospitals and other health partners to prescribe medication for more than 2.2 million patients monthly. The platform also helps patients purchase medications via its database of 60,000 registered medicines. The round was co-led by Singapore’s Temasek, Brazilian financial services company Fit Participacoes and DNA Capital, a Sao Paulo-based health venture investor that recently bought out the company from its previous shareholders. Share this post.
Lightsmith Group and Village Capital seek to accelerate small business climate adaptation solutions. “Small and medium enterprise can be a key driver in providing solutions using technology developed within specific local contexts,” Lightsmith Group’s Brian Parham told ImpactAlpha. The Adaptation SME Accelerator Project, backed by the Global Environment Facility, Conservation International and the Inter-American Development Bank, will support two dozen small businesses providing, for example, weather analytics, resilient food systems or water storage and harvesting in Africa, Asia, Latin America and the Caribbean. More.
Dealflow overflow: Other investment news crossing our desks:
- Evrnu raises $15 million to recycle textile waste for use in new products.
- Stackwell, a mobile app that offers investing tools and education for the Black community, secures seed financing, led by CMFG Ventures Discovery Fund (see, “Agent of Impact: Elizabeth McCluskey”).
- Nigeria’s Payhippo snags a $3 million seed investment to improve access to credit for small businesses in West Africa.
- Australia’s Loam Bio raises $40 million in Series A funding for its microbial seed coating to supercharge plants’ ability to store carbon in soil.
Signals: Ahead of the Curve
The climate crisis is over (if you want it). Global finance leaders tried to evoke something like John Lennon and Yoko Ono’s hopeful paean at “Finance Day” at the COP26 climate summit. “Make no mistake: the money is now there if the world truly wants to arrest the #climatecrisis,” tweeted Mark Carney, the U.N. special envoy and former Bank of England governor. Carney was touting the announcement that more than 450 banks, asset managers, pension funds and insurers, representing $130 trillion and 40% of global assets, have signed onto the Glasgow Financial Alliance for Net Zero, which Carney launched in April. Climate activists were quick to point out that only a fraction of those assets is aligned with a net-zero trajectory today; many GFANZ signatories are still funding fossil fuel production. Still, GFANZ signatories must set science-based targets to reach net zero across their portfolios by 2050, with interim targets for 2030. And they must push their clients to green their own operations. “For us to be net zero, it means every client has to be net zero,” said Bank of America’s Anne Finucane. Other developments:
- Sustainability standards. A new International Sustainability Standards Board is drawing up a global baseline for sustainability and climate reporting. The International Financial Reporting Standards Foundation, which sets accounting standards for much of the world, is spearheading the effort to make it easier to assess companies’ climate commitments and guard against greenwashing (for context, see, “Global standards for sustainability accounting must be holistic and inclusive”). Separately, U.K. chancellor Rishi Sunak said financial firms and public companies will, by 2023, have to produce “gold standard” transition plans detailing how they will reach net zero by 2050.
- Private markets. Public companies are only half the equation. “If we don’t also focus on private companies, we will see the largest capital markets arbitrage ever,” cautioned BlackRock’s Larry Fink. “There is more movement from hydrocarbons into private hands than ever. ” He added, “That’s not net-zero. That’s greenwashing.”
- Corporate spending. Some $125 trillion in investment is needed to transition to a low-carbon economy and meet the goals of the Paris Agreement, including more than $30 trillion this decade, GFANZ reported. Corporations are “potentially the largest direct investors in decarbonization projects or assets,” the report said.
Agents of Impact: Follow the Talent
Scott Nance, ex- of CapShift, joins Fidelity Charitable as vice president of impact investing… GHO Capital Partners names Manuela Rankine director of sustainable investing… Family office Anthos seeks a sustainability expert in Amsterdam… Wellington Management is hiring a sector lead of transportation and mobility for its climate innovation venture fund in Boston.
Thank you for your impact.
– Nov 4, 2021