Greetings, Agents of Impact!
Like you, we’re on the edge of our seats as the U.S.’s real-life political drama unfolds. Send your secrets for making sense of the maelstrom to [email protected], or share on our subscriber-only Slack channel. We’ll share them throughout the week. In other news…
Featured: Impact Voices
How to invest in an inclusive business recovery in Latin America. Dynamic, livelihood-sustaining enterprises, also known as “mom and pop” shops, require radically different financial services than those offered by not only most traditional commercial banks, but impact investors as well. Even before the pandemic, Latin America’s small and growing businesses faced an annual financing gap of more than $1 trillion, with women-led businesses experiencing one-third of that gap. The COVID crisis has caused more than 2.7 million businesses in the region to close, resulting in the loss of some 8.5 million jobs. “Considering the size and urgency of the support needed, the question becomes not whether funders should support small businesses in Latin America and the Caribbean, but how,” write Kusi Hornberger and Fabiola Salman of Dalberg Group in a guest post on ImpactAlpha.
- Digital upgrade. Fintech services from upstarts like Mexico’s Konfio and Colombia’s Sempli are leveraging data and automation to serve crucial segments at radically lower costs than traditional banks.
- Impact first. The financing needs of small and growing businesses are too small for commercial debt providers and private equity players but too large for microfinance institutions and many non-banking financial institutions. Last year, MacArthur Foundation invested $5 million with Acumen-sponsored ALIVE to focus on young social ventures. Catalytic de-risking capital, the consultants say, is urgently needed to allow fund managers like ALIVE, Gawa Capital, Grassroots Business Fund, Mercy Corps Social Ventures, Pomona Impact, and others “to stay impact-first when targeting this missing middle.”
- Keep reading, “How to invest in an inclusive business recovery in Latin America,” by Kusi Hornberger and Fabiola Salman.
Dealflow: Follow the Money
Indian agtech venture CropIn raises $20 million. Bangalore-based CropIn helps farmers analyze crop yields and risks with satellites, sensors and weather data. The 10-year-old company says it has served four million farmers worldwide. It raised Series C funding with backing from Singapore-based ABC World Asia, Invested Development, family office Pratithi Investment Trust and the U.K.’s CDC Group. Chiratae Ventures re-upped, along with impact investor Ankur Capital, one of CropIn’s earliest backers.
- Growing season. CropIn’s financing is the latest for India’s hot agtech sector. “The COVID-19 global pandemic is highlighting the vulnerability of global food supplies and impacting the livelihoods of many smallholder farmers,” said ABC World Asia’s David Hang.
- Dig in.
SilviaTerra raises $4.4 million to build a carbon marketplace from forestlands. The San Francisco-based company is building the Natural Capital Exchange, a carbon marketplace to “connect corporate buyers with carbon credits generated from the world’s largest and smallest forest owners.”
- Climate capital. SilviaTerra’s seed funding round was co-led by Version One Ventures and Union Square Ventures, and joined by Salesforce’s Marc Benioff, former Nature Conservancy CEO Mark Tercek, Gratitude Railroad and others. SilviaTerra is the first investment from Union Square’s $162 million climate fund.
- Share this post.
Amazon launches $2 billion affordable housing commitment. The Housing Equity Fund aims to preserve and create 20,000 affordable homes for low- and middle-income families in the Seattle, Washington, D.C. and Nashville areas. Other tech giants, including Microsoft, Facebook, Google and Apple have also committed to investing in affordable housing in tech hubs where housing costs are soaring.
Air Protein raises $32 million to turn air into meat. Pleasanton, Calif.-based Air Protein uses microbes to convert carbon dioxide, oxygen and nitrogen from the air into an alternative protein food source. The Black and female-led company secured Series A financing from corporate venture fund ADM Ventures, Barclays, and GV, with participation from Unreasonable Collective (see, “Unreasonable Group launches diverse investing collective”).
Voxy EnGen snags $6.8 million to help immigrants and refugees overcome language barriers. The New York-based edtech startup has developed an artificial intelligence-based language learning platform to help “New Americans” boost their job prospects. Voxy EnGen’s Series A round was backed by Rethink Education, The Social Entrepreneurs’ Fund, and the American Family Insurance Institute for Corporate and Social Impact.
Signals: Ahead of the Curve
Biden’s nominee for secretary of labor is a champion of ESG investing in Boston. The Department of Labor in the Trump administration has issued a series of rules hostile to consideration of environmental, social and governance, or ESG, factors by pension fund managers. As mayor of Boston, Labor Secretary-nominee Martin Walsh recently raised the city’s ESG investment mandate. Walsh allocated an additional $50 million to short-term corporate bonds and notes screened for positive ESG factors, bringing the city’s ESG investing activity to $200 million since 2019 (see, “How far will the pendulum of ESG guidance swing back in a Biden administration?”).
- Green Beantown. Boston last month issued its first green and social municipal bonds to raise capital for energy efficiency and affordable housing.
- Check it out.
Agents of Impact: Follow the Talent
Anthony Eames (Calvert Research and Management), Kimberly Griego-Kiel (Horizons Sustainable Financial Services) and Ebony Perkins (Self-Help Credit Union) have been elected to the board of the Forum for Sustainable and Responsible Investment, along with Diederik Timmer (Sustainalytics), Stephanie Cohn Rupp (Veris Wealth Partners) and Mamadou-Abou Sarr (V-Square Quantitative Management)… Abhi Pandya, Adetayo Zenger, Amanda Gex, Devon Smith, Layla Alexander and Tonna Obaze join Harlem Capital as interns.
U.K. Secretary of State for Business, Energy and Industrial Strategy Alok Sharma is named president of the U.N.’s COP26 climate conference to be held in Glasgow in November… Former Impossible Foods CFO David Lee becomes AppHarvest’s president (see “Greenhouse venture AppHarvest will reach the Nasdaq before its tomatoes reach consumers”)… Robert Wood John Foundation seeks an impact investment officer in Princeton, N.J… B Corp Indigenous Pact is soliciting proposals to finance opioid addiction treatment in Native communities and will host info sessions Jan. 15 and Jan. 20.
Thank you for reading.
– Jan. 11, 2021