Greetings, Agents of Impact!
Featured: Food Waste
Misfits Market finds an (im)perfect solution to the problems of food waste and surplus produce. The distribution of blemished, surplus or otherwise imperfect produce took a major step toward mainstream adoption last month when market leader Misfits Market acquired Imperfect Foods, pushing combined revenues above $1 billion. Imperfect boxes are moving away from solely unloved things to grocery boxes that contain surplus produce items. Purists may scoff, saying that these boxes are no longer “imperfect,” says ReFED’s Alejandro Enamorado in his latest food-waste market update for ImpactAlpha. But a world in which imperfect food is ingrained and appreciated “is the way of all food surplus solutions,” Enamorado writes.
- Perfect complements. Misfits Market and Imperfect Foods have operations across the country. Misfits Market targets suburbs; Imperfect Foods is in city centers. Misfits relies on outsourced third-party logistics; Imperfect has build out its own fleet. The merger may not significantly lower costs for consumers. “More likely, it will improve access to this service for many in the U.S.,” says Enamorado.
- Attracting investment. “This bodes well for current and future funders in the food waste space, as the prospect of an initial public offering is now higher due to the increased size of the combined company,” Enamorado writes (for background see, “Silver linings in an uncertain fundraising market for food waste innovation”). “This can be used as an attractive case study for investment returns for those considering funding the space.”
- Climate impact. ReFED estimates that, if fully implemented, upcycling imperfect foods could divert 2.9 million tons of food waste annually, resulting in a reduction of more than 300,000 tons of carbon dioxide-equivalent. Sourcing food locally may be the most climate friendly alternative, says Enamorado. “But if not readily available or financially feasible, companies like Misfits Market might just be the imperfect solution to address the need.”
- Keep reading, “Misfits Market finds an (im)perfect solution to the problems of food waste and surplus produce,” by ReFED’s Alejandro Enamorado.
Dealflow: Agrifood Investing
KKR Global Impact takes a $300 million stake in seed platform Advanta Enterprises. KKR’s $1.3 billion fund will acquire 13.3% of Advanta in a deal that values the company at nearly $2.3 billion. Advanta is the crop protection and hybrid seeds subsidiary of Indian farming company UPL. With smallholder farmers around the world facing harsher climates, Advanta makes crop seeds tailored to regional conditions, such as tropical and subtropical corn. Advanta covers more than 40 crops – including grains, sorghum, sunflower, canola, rice and corn – in 84 countries. The investment comes “at a time when food security has grown in importance amid geopolitical tensions and climate change,” said KKR’s Gaurav Trehan.
- Sustainable agriculture. Separately, another unit of UPL, Sustainable Agri Solutions, sold a 9.1% stake for $200 million to Brookfield Global Transition Fund, TPG and a unit of U.A.E.-based sovereign wealth fund Abu Dhabi Investment Authority. The deal values Sustainable Agri Solutions, which operates crop protection and farm nutrition businesses for smallholder farmers in India, at $2.2 billion. Brookfield’s Nawal Saini said it will work with UPL “to accelerate their sustainability and decarbonization goals.”
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Lowercarbon Capital raises $250 million to double down on fusion energy. As economies electrify and deploy new solutions like carbon capture and water desalination, power demand could triple in the next 20 years. “We need cheaper, denser, renewable baseload energy everywhere,” wrote Lowercarbon’s Chris Sacca announcing the firm’s Q>1 fund, which was raised earlier this year (see “Chris Sacca: ‘Cheaper, better, faster, stronger, simpler and just plain cooler’”). “At Lowercarbon, we believe it will come from fusion.” The firm has already invested in fusion hopefuls Zap Energy and Commonwealth Fusion.
- Holy grail. Fusion holds out the promise of clean, safe, abundant power by using super-high temperatures to fuse atoms and unleash energy – the same process that powers the sun. The key is generating more energy than it takes to spark a reaction, or Q>1, a milestone that dozens of fusion contenders are racing to achieve. The decades-old technology is suddenly poised for a breakthrough. “It’s no longer a matter of if this will happen, it’s about when, and when is sooner than you think,” said Sacca. “Fusion companies will be among the most valuable enterprises in history.”
- Feel the heat.
Dealflow overflow. Other investment news crossing our desks:
- Soothe Healthcare scored $21.1 million in equity and debt to provide personal hygiene products to women in India’s second and third tier cities.
- Proceeds from a $7.5 million green bond issued by Symbiotics will help Namdev Finvest finance clean energy and energy efficiency projects for its customers in India.
- ALMA Sustainable Finance deployed $6 million in debt to Trella, secured by a $4.2 million guarantee from DFC, to digitalize small trucking businesses in Egypt and Pakistan.
- Tunisia’s Sghartoon snagged $500,000 to help parents and teachers detect learning difficulties in children.
Short Signals: Ahead of the Curve
🇦🇺 Impact institutions. Australia’s major banks are considering providing $400 million for a “social impact” investment bank modeled on Big Society Capital in England. (Financial Review)
👩🏽 Women rising. Gender-lens investing’s “State of the Field 2022” report. (GenderSmart)
☀️ ESG oversight. Directors are confident of their board’s understanding of areas that fall under ESG, including talent and culture (92%), but less confident in areas like climate risk (<66%). (PwC)
👷🏾♀️ Worker power. Supporting transnational worker organizing should be at the center of the fight for “ethical AI.” (Noema Magazine)
🚲 Catalytic capital. Denver spent $4.1 million to get more people on e-bikes. It worked. (Fast Company)
🔬 Impact tech. Deep Science Ventures launched a doctorate to put venture creation at the heart of the PhD. (Isabel Thompson)
Agents of Impact: Follow the Talent
Michael Campos, ex- of Azolla Ventures, will join the investment team at Energy Impact Partners… Rohan Ganesh, ex- of Google spinout Verily Life Sciences, joins Obvious Ventures as partner… Corus International is hiring a senior director… Urban Ocean Lab is recruiting a remote policy director… AquaSpark seeks a head of portfolio for investments… Earthjustice is looking for a legislative director of climate and energy in Washington, D.C… Spring Point Partners is recruiting an associate director of impact investments.
In New York: Rockefeller Philanthropy Advisors is hiring an events and programs manager… Pelion Green Future seeks an investment associate… Impact Capital Managers is looking for an impact investing summer fellow for next year… Sumitomo Mitsui Banking Corp. seeks a sustainability manager… The Javits Center is recruiting a director of sustainability and energy… And Bitgreen is hiring a project finance specialist.
The American Sustainable Business Network’s Jeffrey Hollender will host Harvard Business School professor George Serafeim in a conversation about his new book, “Purpose and Profit,” Thursday, Oct. 27… The Democracy Collaborative’s Karen Kahn and Ownership America’s Jack Moriarity will join other employee ownership experts for a webinar, Friday, Oct. 18.
Thank you for your impact!
– Oct. 25, 2022