The Brief | December 12, 2023

The Brief: In community with food, greening global agriculture, electric buses in Africa and India, Sir Ronald’s $900 million impact fund

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Featured: Food Systems

Advocates of regenerative agriculture gather in Kaua’i, in community with food (videos). If you think regenerative agriculture is merely an elite affectation of modern foodies, you might want to visit the 600-year-old Alakoko fishpond on the Hawaiian island of Kauaʻi. The nonprofit Mālama Hulēʻia and scores of volunteers are restoring the 2,700 foot kuapā, or fishpond wall, that once created a vibrant ecosystem to nurture young fish. “This is thousand-year-old knowledge that has been waiting and incubating for a while,” says Peleke Flores, who is helping lead the restoration efforts. Flores took a delegation to Alakoko from last month’s In Community With Food gathering, the second annual convening of food entrepreneurs, impact investors, community activists, storytellers and Indigenous leaders. Says Oliver Niedermaier of TAU Investment Management, who organized the convening, “When it comes to food systems innovation, this place is pretty unique.”

  • Common cause. Despite the incontrovertible privilege of the event, organizers of In Community With Food took pains to champion working farms, local solutions and climate justice. The common cause was making regenerative agriculture not only investable, but mainstream. Participants included Native Hawaiians and Native Americans, Maori from New Zealand, Torres Strait islanders and Aboriginal entrepreneurs from Australia, along with other residents of Hawaii, the US mainland and beyond. Niedermaier and his family hosted the gathering at Common Ground, a 63-acre former sugarcane plantation and then an Ocean Spray guava farm that now includes its own agro-forest, restaurant, co-working space and micro-distillery (Niedermaier also plans to build luxury homes along one edge of the property). “Ultimately, we want to build a lifestyle and hospitality business for people who care,” Niedermaier tells ImpactAlpha.
  • New narrative. “I think if you ask anybody in ‘Big Ag’ right now, they’ll tell you, ‘Oh, that’s just a cute hobby farm,’” says Brenna Simmons-St. Onge of Colorado-based Alliance for Collective Action which is working with state agencies to educate and finance farmers adopting regenerative techniques. Some of the projects are part of the US Department of Agriculture’s Partnerships for Climate-Smart Commodities program, which is distributing more than $3 billion specifically to small and underserved producers. “I do feel like we can feed the world with regenerative agriculture,” she says. “Eventually there are higher crop yields. There’s better nutrient density. And there’s a much better sense of community, and strength of community, in these food systems.” More people are familiar with such arguments and practices after seeingKiss the Ground,” a star-studded documentary on Netflix. “I believe there are people with great intentions at most companies, if not all,” says Kiss the Ground’s Evan Harrison. “They just need some help changing the culture and changing the dialogue.”
  • Keep reading (and watch the video interviews), “Advocates of regenerative agriculture gather in Kauaʻi, in community with food,” by David Bank on ImpactAlpha. 

The impact entrepreneurs and investors putting the UN’s food framework into action. At the COP28 climate summit, the UN for the first time released a “roadmap” for greening the global food system. Food, from farm to table, is responsible for nearly 40% of greenhouse gas emissions, caused by carbon-intensive livestock rearing and soil-destructive monocropping, along with low productivity in some areas and huge waste in others. The agriculture, food and forestry sector received just $43 billion, or 3%, of the $1.3 trillion in climate finance last year. “The path to sustainable achievement intertwines inseparably with robust climate actions,” the UN Food and Agriculture Organization’s wrote. Interventions are often small, highly-localized and/or early stage. An abundance of existing work and models already align with the FAO’s 10-point plan. A sample:

  • Regenerative livestock farming. Farming animals for food accounts for a quarter of food-related greenhouse gas emissions and is a major cause of deforestation. But when livestock are integrated into natural ecosystems, they can help restore degraded land. Buffalo, for example, “have a habit of wallowing that overtime leads to greater biodiversity,” says Aaron Epps of Siċaŋġu Co, a tribal development organization on the Rosebud Sioux tribal lands in South Dakota. Siċaŋġu Co is proving the buffalo’s contribution to land regeneration while re-establishing community bonds with the animal via a 1,000-head tribally-owned herd.
  • Aquaculture livelihoods. Fish and seafood, the FAO argues, are more sustainable than other forms of animal protein, and an important source of livelihoods in low-income countries. Netherlands-based Aqua-Spark was one of the first impact investors to spot the dual climate and social impacts of sustainable aquaculture. Its investments include sustainable producers like Lake Harvest; fish-farm tech providers like Tepbac; and companies like Kenya’s Aquarech, which bridge fragmented supply chains.
  • Centering women and Indigenous communities. The UN’s roadmap for actions that “promote inclusivity for women, youth and Indigenous communities” in the sustainable food transition. Indonesia-based Nusantara Fund and Mexico-based Ejido Verde are investing in Indigenous communities to support agro-forestry livelihoods, climate resilience and local biodiversity. Women-led funders like EcoEnterprises Fund and MCE Social Capital are lending to address the gender productivity gap in farming, caused by women’s unequal access to finance, land rights and technology.
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Sponsored by J&J Impact Ventures

Coordinating health impact investments in emerging economies. Increased investment in healthcare in emerging economies has not translated into overwhelmingly positive results. “Capital does not reach, at the necessary scale, innovative health ventures building sustainable solutions for impact in developing economies,” writes Judd Staples of Innovations in Healthcare. In research funded by J&J Impact Ventures, Staples spoke with impact investors to learn about financing pitfalls and coordination opportunities in healthcare investing. “An increase in intentional, coordinated action would significantly, positively impact the industry’s ability to gain ground back in increasing access to quality healthcare and saving more lives.”

  • Call to action. In a post on ImpactAlpha, Staples makes the case for a health investment coalition to enhance deal-sharing, facilitate funding transitions, and support research. Baraka Analytics from Baraka Impact Finance profiles promising health ventures. The Impact Investment Initiative for Global Health shares best practices on impact investment in global health. Innovations in Healthcare is laying the groundwork for the Health Impact Investor Coalition to help funders coordinate capital deployment and impact assessment. Says Staples, “We encourage investors to consider how they can participate and contribute to this momentum.”

Dealflow: Electric Vehicles

Electric buses get funding in Africa and India. Electric buses are gaining traction around the globe to reduce emissions and unhealthy smog. In China, the leading market for and maker of the vehicles, more than three-quarters of urban buses were “new energy vehicles,” including electric and fuel cell, at the end of 2022. Other emerging markets are getting on board. In Nairobi, e-bus maker BasiGo snagged $5 million from British International Investment to scale up production in East Africa, where clean power is abundant. That follows a $1.5 million investment from USAID in July to support BasiGo’s expansion into Rwanda, and a $6.6 million equity raise a year ago from investors including Mobility54, Novastar Ventures and My Climate Journey. In the US, electric bus maker Proterra has found buyers for some of its business units after filing for bankruptcy in August. 

  • Catalytic converters. In India, as in many emerging markets, up-front costs can be a barrier to electrifying fleets. The US and a group of philanthropic funders have committed $150 million to an e-bus fund; the Indian government is kicking in $240 million. The India-US Payment Security Mechanism, as it is called, will guarantee loans to e-bus makers looking to expand production. The announcement, which came at COP28 in Dubai, furthers India’s goal to deploy 50,000 electric buses on its streets by 2027.
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Sir Ronald Cohen’s Apax Partners closes $900 million global impact fund. Born in Egypt to a Jewish family that emigrated to the UK, Sir Ronald Cohen launched Apax Partners in 1972 and built it into one of the largest global private equity firms in Europe (see, “Nick O’Donohoe on Sir Ronald Cohen’s Impact”). “The world has historically operated on two parameters: risk and return. We now find ourselves shifting to three dimensions: risk, return and measurable impact,” said Cohen, who chairs the fund’s impact advisory board. Apax Global Impact will invest in companies with core products and services geared toward environmental and social impact. That includes health and wellness, digitalization, social and economic mobility, and environmental resources. The fund has backed four companies, including Swing Education, which connects schools with qualified substitute teachers, and GAN Integrity, which has a platform for managing supply chain risk.

  • Impact management. Apax Global Impact received commitments from private and public pension funds, sovereign wealth funds, fund of funds, insurance companies, endowments and charitable foundations. The fund, which has a carry feature tied to its impact performance, is classified as an “Article 9” fund for its sustainability objectives under the European Commission’s Sustainable Finance Disclosure Regulation, or SFDR.
  • European fundraising. Separately, Revaia, a French women-led venture firm, secured €150 million ($150 million) for its second fund from investors such as Bpifrance and European Investment Fund. The fund will invest between €10 and €30 million in a dozen growth-stage sustainability companies mainly in Europe. Apollo Global Management got a greenlight from Luxembourg’s regulators to launch its Clean Transition Equity Fund to aggregate capital from wealthy investors in Europe for private investments in clean energy and sustainability. The fund will be available to investors in their local currency and “will be fully funded at launch,” said Apollo.
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Dealflow overflow. Other investment news crossing our desks:

  • Singapore-based Valency International scored a $15 equity investment from British International Investment to build food processing and manufacturing facilities in Nigeria and partner with 60,000 local farmers. (BII)
  • Mirova invested $6.5 million in Colombia-based biodiversity credits developer Terrasos via its current $208 million Land Degradation Neutrality Fund. The impact investor is looking to raise $350 million for a new Land Degradation Neutrality fund. (Carbon Pulse)
  • Apparel Impact Institute’s Fashion Climate Fund, which seeks to raise $250 million to decarbonize the textile, apparel and footwear industries, secured a $4 million philanthropic commitment from HSBC. (AII)

Agents of Impact: Follow the Talent

Sorenson Impact Institute names Peter Lupoff of Lupoff/Stevens Family Office as a member of its Global Impact Leaders network… Veris Wealth Partners appoints Elena Ladygina, ex- of Morgan Stanley, as senior advisor and head of its New York office… Vernice Arahan, a former program officer at Inclusiv, joins ImpactAssets as a senior analyst. 

Katherine Morency, ex- of DiCicco, Gulman & Company, joins Social Finance as a corporate finance senior associate… I&P is looking for an investment officer in Senegal… Nykredit has an opening for an ESG advisory analyst or associate in Copenhagen… Equal Ventures is on the hunt for an associate in New York… Faith Invest is offering an online intro course on aligning investments with faith values, Feb. 28-March 20. 

👉 View (or post) impact investing jobs on ImpactAlpha’s new Career Hub.

Thank you for your impact!

– Dec. 12, 2023