Greetings, Agents of Impact!
Answer The Call, today. The COVID crisis is the moment for impact investing to step up. Join hundreds of Agents of Impact, including LeapFrog Investments’ Felix Olale, New Island’s Chris Larson, CREO’s Regine Clement, Ceniarth’s Greg Neichin, Open Road Alliance’s Caroline Bressan, Prudential’s Tony Berkley, Encourage Capital’s Ricardo Bayon, Tideline’s Christina Leijonhufvud, Renewable Resources Group’s Jason Scott, Vital Capital’s Nimrod Gerber, Vulcan Investment’s Lauren Kickham, Blended Value’s Jed Emerson, Catalyst at Large’s Suzanne Biegel and, oh yeah, ImpactAlpha’s David Bank, on ImpactAlpha’s Call No. 16: Impact Step Up. Don’t worry if you haven’t RSVP’d – just log in at 10am PT / 1pm ET / 6pm London. Here’s the link.
- Background reading. “The 10x challenge: Pandemic is a chance for impact investors to step up by an order of magnitude – or more.”
Featured: ImpactAlpha Original
Lessons learned: How Liberia and Sierra Leone rebounded after the Ebola shutdown. A health crisis shattered families, quarantined communities, closed borders and shut down businesses. Lenders pulled in their horns, figuring shell-shocked borrowers would default on their loans, and they would be unable to make new ones. They were wrong. When BRAC Microfinance returned to Liberia and Sierra Leone in 2015 after the months-long shutdown caused by the Ebola epidemic, they found communities eager to repay their loans, restart their businesses and rebuild their livelihoods. “We got it completely the wrong way around,” says BRAC’s Shameran Abed. “What we should have done is just get money flowing again to get people back on their feet.”
The experiences of BRAC, the world’s largest non-governmental organization, challenges assumptions about the resilience of poor, vulnerable communities and offers lessons for how investors and financial institutions can revive and even expand economic activity in a post-epidemic recovery. “Now is not the time to be risk-averse,” warns Abed. “The best thing we can do is go back into communities and lend. The faster we do that, the faster we all recover from this crisis.” In the Ebola crisis, BRAC had been prepared to write off at least half of its portfolio in Liberia and Sierra Leone. Instead, the majority of borrowers resumed loan repayments as soon as the crisis eased, because they were eager for new loans. “Clients who had not worked in months, clients who lost their initial capital, and clients who had lost their businesses and were in debt all demanded new capital to start generating income again,” according to a case study about the episode. In the COVID crisis, BRAC intends to resume lending as quickly as possible. “We’re trying to make the point that when this eases up, people will need money again, and that we should bank on the resilience of our clients, especially women,” Abed says. “They prove it over and over and over again.”
Keep reading, “How Liberia and Sierra Leone rebounded after the Ebola shutdown,” by Jessica Pothering on ImpactAlpha.
Dealflow: Follow the Money
Accion Venture Lab backs Colombian fintech startup R5. R5 helps Colombia’s motorcycle delivery drivers and other informal sector workers get low-cost, long-duration loans by putting up their vehicles as collateral. The company also offers vehicle insurance and is expanding into health insurance. Terms of the deal were not disclosed.
Agricycle secures $1.5 million for “upcycled” food snacks. Milwaukee-based Agricycle’s solar-powered food dehydrator prevents food waste by converting fresh produce into shelf-stable snacks. The company procures produce from 35,000 emerging market smallholder farmers for its Jali snack line. MaSa Partners led its funding round.
Medici raises $24 million to help doctors deliver telemedicine. The Austin-based startup’s platform helps doctors perform web consultations and expand their telehealth practices, particularly for underserved patients. Medici is backed by high-profile individual investors including Starwood Capital Group’s Barry Sternlicht and Howard Jenkins, founder of the supermarket chain Publix.
Vutiliti clinches $11.8 million to reduce energy waste and improve utility safety. The Salt Lake City-based startup makes smart monitoring technology for utility providers that monitors equipment efficiency and performance. Exelon’s venture investing arm, Constellation Technology Ventures, led the round, citing the technology’s usefulness in cutting carbon emissions.
Signals: Ahead of the Curve
Impact management is hot: Recapping Agents of Impact Call No. 15 (audio). More than 800 participants Zoomed into The Call to dig into the first annual assessments of impact investors under the International Finance Corp.’s Operating Principles for Impact Management. Catch the audio replay if you missed the lively discussion. Spoiler alert: The assessments revealed shortcomings in impact oversight, particularly around investment exits. But observers applauded the transparency as an important step in the evolution of the market. “We believe the principles represent not just best practice for impact management, but over time will evolve to fit into best practice for investment management writ large,” said Tideline’s Christina Leijonhufvud on Agents of Impact Call No. 15: Making the mark in impact management. Tideline, which sponsored The Call, analyzed more than a dozen verifications of investors’ alignment with the operating principles in “Making the Mark,” including Nuveen, LeapFrog Investments and the European Bank for Reconstruction and Development. Read on and listen in.
Agents of Impact: Follow the Talent
ESG exodus: BlackRock cofounder Barbara Novick is giving up her day-to-day role as director of stewardship… Rakhi Kumar, State Street senior managing director and chief strategist for ESG and asset stewardship, will leave the firm in May… Robert Main, former head of investment stewardship at Vanguard, left in February to start advisory firm Sustainable Governance Partners with former Vanguard ESG execs Jessica Wirth Strine, Marc Lindsay and Amy Hernandez (h/t Eric Balchunas).
Thank you for reading.
–Apr. 30, 2020