Greetings, Agents of Impact!
Featured: Frontiers in Social Innovation
Five metrics to help investors point their investments toward impact. Less than half of impact investors had prior experience with the “impact” side of their job, according to a 2017 survey by the Center for Social Innovation at Stanford’s Graduate School of Business. “Talent combining both impact and finance skills and mindsets is a rarity, as being proficient in both requires being able to hold potentially opposing goals in tension,” write Bernadette Clavier and Neil Malhotra of the Center for Social Innovation, and Jill Lanney, a graduating MBA student. An impact compass developed by the Center helps guide investors to investments with the greatest potential for social impact.
To kick off ImpactAlpha’s series, “Frontiers in Social Innovation,” in partnership with the Center, the authors show how the student-run GSB Impact Fund is putting the compass into practice. “Qualifying social investments requires a reframing of traditional investment selection criteria and processes,” the authors write. The fund scores five metrics on a three-point scale to evaluate the impact of potential investments:
- Impact Scalability. How many people does the company’s target market directly impact?
- Impact Materiality. To what degree is impact (at the individual and macro levels) core to the solution?
- Mission Alignment. Is the business aligned with the impact mission?
- Impact Efficacy. What evidence exists on the efficacy of the solution? Is the theory of change robust, logical, and achievable?
- Diversity and Inclusion. Is the company led by and/or responsive to the needs of underrepresented communities?
For its latest investment, the student fund scored Honest Jobs, a digital marketplace that helps people impacted by the criminal justice system find employment. Honest Jobs got high scores for impact materiality (impact is core to the company’s solution) and mission alignment (the company earns revenue from potential employers looking to employ the formerly incarcerated). The firm scored 2’s on scalability, efficacy and diversity. “Qualifying social investments requires a complete reframing of your traditional selection criteria and processes,” Clavier, Malhotra and Lanney say. “You need ways to understand which of your investment options will generate the most impact and whether a well-intentioned social program can also have a negative impact on society.”
- Keep reading, “Five metrics to help investors point their investments toward impact,” by Bernadette Clavier, Jill Lanney and Neil Malhotra on ImpactAlpha.
Dealflow: Investing in Health
CareAcademy secures $20 million to upskill home health caregivers. The Boston-based caregiver-training platform has facilitated 1.5 million hours of training for nearly 30,000 home care and home health workers. The investment, led by Goldman Sachs Asset Management, “positions CareAcademy to meet its ambitious goal of empowering one million caregivers by 2030,” said CareAcademy’s Helen Adeosun (see “Agents of Impact: Helen Adeosun”). The home-care economy is projected to grow 8% a year through 2027. Goldman Sachs made the investment via its One Million Black Women Initiative, a $10 billion commitment over 10 years to support Black women (see, “Q&A with Asahi Pompey”). Participating investors include MassMutual via its MM Catalyst Fund, Impact America Fund and Rethink Education.
- Home-care economy. Separately, Nashville-based value-based healthcare company CareBridge raised $140 million in a round led by Oak HC/FT, a women-led healthcare and fintech investment firm. The company will build out health solutions for Medicaid patients who are receiving home and community-based services for physical or intellectual disabilities.
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Guild Education raises $175 million to help employers unlock career mobility for their employees. The Denver-based company has helped nearly five million wage workers start or return to degree programs with corporate tuition assistance programs it has developed for clients, including Disney, Walmart, Target and Macy’s (see, “Reskilling frontline workers, Guild Education becomes a B Corp unicorn”). Guild will use the investment to create career opportunity programs for healthcare and financial services employers, mainly targeting frontline workers. Guild’s Rachel Romer Carlson said Guild is “helping companies build the workforce of the future, while providing frontline workers access to the education, skills and career pathways to build a better future for themselves and their families.”
- Good jobs. The round, led by Wellington Management, brings Guild’s valuation to $4.4 billion. Citi Impact Fund, Iconiq Capital, General Catalyst, Oprah Winfrey and others also invested. Guild’s “innovative approach is beginning to deliver positive ROI and social impact,” said Wellington’s Matthew Witheiler.
- Check it out.
Dealflow overflow. Other investment news crossing our desks:
- Agilitas Energy secured $350 million of equity from CarVal Investors to expand its footprint of renewable energy and battery storage systems in the U.S.
- Achieve Partners acquired a majority stake in Boclips, which provides video and audio clips to publishers, schools, universities and government ministries.
- General Mills invested $3 million in the Ecosystem Services Market Consortium to reward farmers for environmental outcomes from regenerative agriculture.
- Carolina Community Impact scored $250,000 to lend to small businesses in North Carolina, especially those that are underserved and owned by people of color and women.
- Culina Health snagged nearly $4.8 million in a seed financing round backed by Rethink Impact to build an affordable personalized nutrition platform.
Signals: Gender Lens Investing
Merger of GenderSmart and 2X Collaborative aims to mainstream integration of gender in finance. The 2X Collaborative, led by Jessica Espinoza, builds on the 2XChallenge, the joint initiative of development finance institutions that has mobilized commitments of $15 billion to advance women’s empowerment (see, “With billions as bait, development financiers seek to hook private investors on gender-lens investing”). GenderSmart is a field-building effort led by Suzanne Biegel that is convening the GenderSmart Investing Summit in London, October 17-19 (see, “Investors find untapped opportunities at the intersection of gender and justice”).
- Strategic partnership. The two organizations have been closely partnered all year; the merger is expected to be fully operational by January. The new organization “will give a unified, more powerful voice to the gender lens investing community, drive the integration of gender into mainstream investing strategies, and shape the market with significantly more impact,” Espinosa said. Combining the organizations’ complementary strengths, Biegel said, will “enhance our collective listening, reach and impact with a wide range of stakeholders.”
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Agents of Impact: Follow the Talent
Annie Donovan, ex- of Local Initiatives Support Corporation, joins Raza Development Fund as president and CEO… Joohee Rand, ex- of Anchorum St. Vincent and Santa Fe Community Foundation, joins Tideline as associate partner… Rippleworks is hiring a marketing manager and learning and growth partner… Refugee Investment Network is hosting the “RIN Refugee Entrepreneurship Showcase,” with Izabela Ersahin of Sector 7, Sunday Asau of St. John’s College of Science and Technology, Rami Sharrack of Tatwir Consulting and Anas Alakkad of PontemPro, Tuesday, Jun. 21.
Thank you for your impact!
– June 9, 2022