Greetings, Agents of Impact!
Agents of Impact Call No. 28. Mobilizing catalytic capital for climate justice. Ultra-high-net-worth families and their family offices have a unique opportunity to provide catalytic capital for high-impact ventures and funds. Ceniarth’s climate investments aim to benefit people and communities most affected by the climate crisis with an impact-first mix of grants, subsidies and patient, low-cost capital. Komaza helps smallholders grow commercial timber on unused land in Kenya. One Acre Fund provides financing and training for African farmers. The Blue Orchard InsuResilience Fund is growing the ecosystem for agricultural climate insurance in Africa, Asia and Latin America.
- Join Ceniarth’s Diane Isenberg, along with Libra Foundation’s Regan Pritzker and other principals, on The Call to explore how some wealthy families are optimizing their portfolios for impact. Tuesday, May 25 at 10am PT / 1 pm ET / 6pm London. RSVP today.
Dealflow: Electrify Everything
Zero-carbon air travel takes flight with a wave of new investments. As air travel rebounds, so too has the airline industry’s massive carbon footprint. Aviation was responsible for 915 million tons of carbon dioxide emissions in 2019 and has been expected to be one of 2050’s biggest remaining carbon emitters. Now comes a raft of startups aiming to decarbonize flight and raising big rounds from big-name investors. The latest: BETA Technologies, which raised $368 million in Series A financing to develop ALIA, an electric vertical aircraft the company says can fly nearly 300 miles carrying up to six people or 1,500 pounds of cargo. “The development of sustainable and decarbonizing technologies will help facilitate the transition to a low-carbon economy and protect the planet for future generations,” said Kara Hurst of Amazon, which invested in BETA via its $2 billion Climate Pledge Fund (see, “Amazon’s $2 billion Climate Pledge Fund ups the ante”). The round was led by Fidelity Management & Research Co.
- Cli-fliers. Other green aviation startups include Hollister, Calif.-based ZeroAvia, which is developing a two-megawatt hydrogen-electric regional airplane. It raked in $74 million to date from investors, including Breakthrough Energy Ventures, Ecosystem Integrity Fund and British Airways. Los Angeles-based Universal Hydrogen is aiming to retrofit commercial aircraft with hydrogen-based powertrains with backing from Playground Global, Airbus Ventures, JetBlue Technology Ventures, Toyota AI Ventures and others. Boston-based Regent Craft raised $9 million for its electric hovercraft from Y Combinator, Marc Cuban, Peter Thiel’s Founders Fund, Caffeinated Capital and others.
- Into production. BETA will use the investment to ramp up manufacturing and “meet aggressive certification milestones,” says CEO Kyle Clark, and roll out its charging infrastructure by 2024. The company’s partners and customers include the U.S. Air Force and UPS. Biotech firm United Therapeutics plans to use ALIA to transport its synthetic organs for human transplant. Blade Urban Air Mobility will transfer passengers for longer commuter routes.
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Germany’s TWAICE raises $26 million to optimize lithium-ion batteries. The Munich-based software company helps automobile and energy companies fine-tune battery performance. “After years of closely monitoring the energy storage ecosystem, we recognize that software will be crucial to helping the battery industry achieve scalability — whether that is batteries powering electric vehicles or the grid,” says Tyler Lancaster of Chicago-based Energize Ventures, which led the round. Energize backed Volta, a commerce-centric EV charging network in January; and Aurora Solar (see, “Aurora Solar raises $50 million to digitize solar energy”).
- Going global. TWAICE’s customers include Audi, Hero MotorCorp, Verbund, Autovista Group and Porsche affiliate Mieschke Hofmann und Partner. “With the rapid acceleration toward electrification globally, North America is the logical next step to become a true global player,” says TWAICE’s Stephan Rohr.
- Plug in.
Calvert Impact Capital backs Sunwealth to expand solar access. The impact lender made a $2.9 million loan to the Cambridge, Mass. clean energy investment firm to finance 18 solar projects in communities underserved by other renewables financing. Private investors provided another $4.3 million in tax equity investments. The projects are expected to provide $3.8 million in lifetime energy savings for nonprofit organizations, multi-family apartment buildings, houses of worship and commercial office buildings. Sunwealth partners with local solar developers and installers on projects ranging from 5 kilowatts to 1 megawatt on building rooftops and parking lots (see, “Shared solar generates savings and jobs for New York City Housing Authority residents”). Share this post.
Signals: Climate Finance
The world’s premier energy forecaster gets real. Reaching net-zero emissions by 2050 will require a “transformation of how energy is produced, transported and used globally,” according to the International Energy Agency’s Net Zero by 2050. What’s not needed: any new development of fossil fuels, including oil, gas and coal. Starting now. “Pretty clear message from the IEA for all of my friends in the investment and finance space — no new investment in fossil fuels,” tweeted Tom Steyer. The IEA was created in the 1970’s to safeguard oil supplies and was long accused of downplaying renewable energy. No longer. Wind and solar power installations need to quadruple by 2030, the agency says. For solar, that requires installation of the equivalent of the world’s largest solar park – every day. Electric vehicle sales need to increase a dozen-fold and EV battery production 40x. Global clean energy investment will have to hit $4 trillion a year by 2030, from about $600 billion last year.
- Keep it in the ground. The report backs up investors and asset managers pressing fossil fuel companies to cut exploration and drilling (see, “Shareholders flex their muscles as the drama builds toward votes at ExxonMobil”). “It’s going to be an interesting reality check for companies, but also for investors,” says Ceres’ Andrew Logan.
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Impact Voices: Community Finance
A lifeline for relief, CDFIs are even more essential for the recovery of under-banked businesses. When the initial COVID shutdowns hit a year ago, community development financial institutions, or CDFIs, were critical in getting small businesses quick relief through the Paycheck Protection Program, or PPP, to make payroll and keep their businesses alive. Since May 3, when the additional $292 billion Congress allocated this year for PPP funds ran out suddenly, CDFIs are again one of the only routes to emergency funds for businesses still struggling to recover from the COVID disruption, because of a small, $8 billion allocation that was reserved for CDFIs to distribute. As the PPP winds down, just as it was when the PPP program started, “CDFIs are a lifeline for small businesses that have been underserved by traditional banks,” writes Lindsay Smalling of impact measurement company 60 Decibels in a guest post on ImpactAlpha.
- PPP access. Four out of five small businesses could not have easily found an alternative to CDFIs to get help accessing PPP funding, 60 Decibels found in a survey of borrowers. Black respondents were nearly twice as likely to report their business would have closed if not for the PPP compared to white respondents. CDFIs business borrowers were 45% Black-owned and 43% female-owned. Nearly half of the business owners were from low- to moderate-income households.
- Listen better. With funding from the Surdna Foundation and Ceniarth, 60 Decibels spoke with more than a thousand small business customers of Southern Bancorp, Optus Bank, TruFund Financial Services, Hope Credit Union, BBIF and MoFi. Says Smalling, “For anyone looking for confirmation that CDFIs are a key conduit for impact-first, racial justice investing, the most compelling evidence-base comes from the customers themselves.”
- Read Lindsay’s post.
Agents of Impact: Follow the Talent
Christine Loh, of Hong Kong University of Science and Technology’s Institute for the Environment, joins the board of New Forests… Peter Coleman, ex- of Standard Solar, joins the U.S. Department of Energy Loan Programs as a senior financial advisor… Anne-Claire Roux, ex- of Finance for Tomorrow, joins Mirova as head of Mirova’s Forward Endowment Fund… The Human Impacts Institute is hiring a part-time program manager…
ImpactB2B and Alder Agency & Co are hosting “Climate Tech Marketing to Investors,” Thursday, May 20… The Aspen Institute is hosting “Encouraging Job Quality in Small Businesses: Advising, Lending, and Procurement Approaches,” on Thursday, May 20… RE-volv and Capshift are discussing RE-volv’s recoverable grant program to help nonprofits go solar on Monday, May 24…Impact Capital Forum will offer guidance for submitting comments on the SEC’s proposed rules for climate disclosure, Tuesday, May 25.
Thank you for your impact.
— May 19, 2019.