Greetings, Agents of Impact! Thanks to the hundreds of you who joined yesterday’s climate + gender call. We’ll have the writeup and replay in Friday’s brief.
Featured: Good Jobs
JFF Ventures aligns venture capital with a national nonprofit to invest in the future of work. Creating the tools and technologies to move more than 100 million low-income Americans comfortably into the middle class with new skills and quality jobs is a large and growing investment opportunity. JFF Ventures (formerly ETF@JFFLabs) has been one of the most active venture investors in an “inclusive workforce” from its position within Jobs for the Future, a 40-year-old national nonprofit with deep expertise in workforce and education technologies. Led by veteran impact investor Yigal Kerszenbaum, JFF Ventures has deployed nearly $30 million in equity, debt and debt-like investments in dozens of companies, including category leaders such as CareAcademy, FactoryFix and ChargerHelp. Another portfolio company, San Francisco-based Forage, inked a deal on Wednesday to embed its job simulations into Pearson’s educational materials, which are used by more than 18 million and 3,700 universities in the US.
- Spin out, scale up. Now as a for-profit venture arm, JFF Ventures, is raising a $50 million second fund. The venture firm will remain wholly owned by Jobs for the Future and draw on the resources of the experienced nonprofit. Now operating independently, the fund will distribute returns to limited partners and provide a carry to the general partners. “We have landed in a place that we call ‘strategically aligned, operationally independent,’” Kerszenbaum, previously with Rockefeller Foundation and Developing World Markets, tells ImpactAlpha.
- Impact-first structure. Joining the fund is Sabari Raja, the founder of edtech company Nepris, one of JFF Ventures’ earliest investments (PSG Equity acquired Nepris in 2021). The general partners’ carry will be tied to impact targets, such as the percent of portfolio founders that are racially and gender diverse (eight in 10 founders in the current fund are women or people of color). A portion of that carry will flow back to Jobs for the Future, providing a new source of general operating funds. Kerszenbaum says the structure will allow JFF Ventures to “operate as a best-in-class impact first venture fund,” aligned with “the leading adult education and workforce development nonprofit in the country.”
- Nonprofit venture. Kerszenbaum and Raja are determined to keep the nonprofit Jobs for the Future close. The partners have studied similar efforts, including edtech investment firm Reach Capital, which launched out of nonprofit edtech fund NewSchools Venture Fund. One lesson: Align with the incentives of the nonprofit with those of the team, the founders and limited partners. Kerszenbaum and Raja will tie their success to delivering impact, and that success to JFFs. “We think that that lock is critical for better supporting our founders, better leveraging the ecosystem of JFF,” says Kerszenbaum, “and all in all will generate more impact and scale for both parties.”
- Keep reading, “JFF Ventures aligns venture capital with a national nonprofit to invest in the future of work,” by Dennis Price on ImpactAlpha
Dealflow: Circular Economy
SuperCircle scores $7 million to help fashion brands and retailers reduce textile waste. The growth of textile recycling ventures in recent years has been fueled, in part, by a rapid increase in textile waste. Around 60% of purchased clothing end up in landfills within a year; less than 1% is recycled. SuperCircle launched last year to help fashion brands and retailers launch in-house recycling programs and offload bulk inventory. SuperCircle “allows brands to collect, sort and process pre-consumer and post-consumer apparel and footwear, while providing garment-level tracking and tracing through responsible end-of-life,” said SuperCircle’s Chloe Songer. Recycling programs with brands including Uniqlo, Reformation and Parachute have recycled over one million garments that otherwise would have gone to landfills.
- Fashion circularity. SuperCircle’s pre-Series A round was co-led by Radicle Impact and Ulu Ventures, a Palo Alto, Calif.-based fund that invests in women and diverse founders. “SuperCircle is the connective tissue that links consumers, retailers, logistic providers and recyclers, coordinating the entire process end-to-end,” said Ulu Ventures’ Kathy Chen. Other backers include Earthshot, BBG, Lyra and Blueprint Ventures.
- Waste to value. Among the ecosystem of textile-recycling startups in the US is California’s Refiberd, which uses AI-based imaging to detect the composition of fiber and contaminants in textile waste; Circ, based in Danville, Va., breaks down old clothes to the raw materials from which they were made; LA-based Ambercycle converts end-of-life textile waste into premium fabric for reuse; and Seattle’s Evrnu claims it can disassemble clothing materials to create new garments without compromising for strength or quality.
- Check it out.
Beyond Capital Ventures backs Lapaire for affordable eye care in Africa. Africa faces a shortage of eye-care specialists, making it challenging for tens of millions of Africans with visual impairments to get care. Lapaire, based in Cote d’Ivoire, launched in 2018 to provide free vision tests and low-cost rates eyeglasses. The company operates 54 optical shops in Togo, Burkina Faso, Kenya, Mali, Benin, Uganda and Cote d’Ivoire. Lapaire has served more than 200,000 people, said Beyond Capital’s Eva Yazhari, leading to “improved productivity, increased earning potential, and better outcomes for individuals across the continent.” Lapaire says 70% of its customers have obtained glasses for the first time.
- Impact tech. Beyond Capital joined Lapaire’s Series B investment round. The women-led venture fund invests in early-stage companies delivering essential goods and services to consumers in Africa and India. The firm’s profit-sharing mechanism earns founders a percentage of the fund’s profit for meeting gender-based targets.
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Dealflow overflow. Other investment news crossing our desks:
- Revolv raised $25 million in equity project financing under a commitment from Greenbacker Capital Management to electrify medium to heavy-duty vehicle commercial fleets. Separately, Evenergi Labs raised $5 million of a targeted $10 million Series A round for its software to help commercial fleets transition to EVs. Aligned Climate Capital led. (Axios)
- San Francisco-based Zero Emission Industries snagged $8.8 million in a Series A round led by Chevron New Energies to develop hydrogen fuel cell power systems for shipping. (Zero Emission)
- Ananda Impact Ventures led Resistomap’s €2 million ($2.2 million) seed round to quickly detect and quantify antibiotic-resistant bacteria from wastewater and soil samples. (Resistomap)
- Bangalore-based Sentra.world clinched $2 million in a seed round led by Avaana Capital to help industrial businesses in India with their net-zero emission goals. (Avaana Capital)
Impact Voices: The Transition
Climate tech experts identify the biggest opportunities, and challenges, in the low-carbon transition. A survey of more than 160 experts, investors, entrepreneurs and other practitioners pointed to storage and grid management; recycling; low-carbon concrete and cement; and forestation and habitat restoration. The survey, by The Oxford Climate Tech Initiative and the Skoll Centre for Social Entrepreneurship also identified areas where the climate tech ecosystem needs further support, including nurturing ‘green’ skills, supporting adaptation efforts, and ensuring climate funding flows equitably. In a guest post on ImpactAlpha, Jamil Wyne, Minahil Amin and Abrar Chaudhury share insights from the survey. “We have to take a holistic, ecosystem-wide approach, bringing in new funding, talent and partnerships at a historic pace while ensuring that these resources are accessible to all,” they write.
A decade of outcomes-based financing lays the groundwork for impact at scale. Environmental impact bonds have introduced new ways to finance nature-based solutions. AgOutcomes’ Soil and Water Outcomes Fund is incentivizing farmers to profitably adopt conservation agriculture practices. And health insurers are paying community-based organizations to help reduce avoidable hospital visits through Quantified Ventures’ Health Outcomes Fund. After a decade of creating outcomes-based financing structures, Quantified Ventures is moving from discovery to scale, Eric Letsinger and Tee Thomas write in a guest post on ImpactAlpha. Come January, Thomas will become CEO of the advisory firm, succeeding Letsinger, who remains board chair.
- Lessons learned. Investors have shown willingness to link financial returns to measurable outcomes. “Outcomes-based financing operates on more solid ground going forward with this now established,” the authors write. Payors are backing both environmental and health outcomes, but rarely together. Debt financing is easier to align with outcomes than equity-centric investing, pushing debt financing to center stage in an era of high interest rates. A decade ago, the structures were used to de-rise nature-based projects, Letsinger and Thomas write. “Today, we’ve financed so many of these projects and created the evidence base needed to make cities comfortable deploying natural infrastructure through traditional financing mechanisms without the need for ‘innovative’ finance.”
- Keep reading.
Agents of Impact: Follow the Talent
World Wildlife Fund is looking for a director of agriculture and innovative finance in Washington, DC… Jefferies is hiring an equity research associate for ESG public policy in New York… Mastercard seeks a senior vice president of ESG products in Purchase, NY… Forest Investment Associates has an opening for a sustainability manager in Atlanta.
War on Want and the Climate Justice Coalition are hosting a webinar about COP28 and the fight for climate justice on Tuesday, Nov. 21… The Trade Union Caucus of the Climate Justice Coalition is hosting a conference on building workers’ power for climate and crisis in London on Saturday, Nov. 25.
Thank you for your impact!
– Nov. 16, 2023