Greetings, Agents of Impact!
Featured: ImpactAlpha Original
Digitization of smallholder farming draws investors to Indian agtech startups. Among the world’s largest producers of food, India stands out for its 130 million independent smallholder farmers who till, on average, less than four hectares of land apiece. These farmers have long gotten a raw deal from the agrifood value chain from which they source seeds, fertilizer, equipment and loans, and into which they sell their harvests. What’s new is investor interest in a growing crop of tech entrepreneurs aiming to streamline India’s $280 billion agriculture industry with a shared strategy: improving the incomes and livelihoods of smallholder farmers. “Indian entrepreneurs are solving for the low-hanging fruit in the sector, which is in turn helping farmers reach slightly better income levels and expand into horticulture and commercial farming,” Omnivore’s Jinesh Shah tells ImpactAlpha. “That will help them make more money and also bring more investment into the sector.”
Bangalore-based CropIn, which provides data analysis on crop yields and risks with satellites, sensors and weather data, raised $20 million in Series C financing this month. More than a half-dozen other recent deals signal the investor traction Indian agtech has gained despite – or because of – COVID-related disruptions. Investors include impact tech investors like Ankur Capital and dedicated agtech VC firms Omnivore and Nabventures. Generalist investors discovering agtech include Beenext, Sequoia and Accel. In addition to Cropin, startups raising capital include DeHaat, which runs an online marketplace that connects India’s farmers with financial services and buyers. Arya offers hyper-local warehousing services. Intello Labs uses AI-powered imaging to track food quality. Unnati helps farmers access financial services. And Krishify has built a social media platform to connect farmers to each other. “These digital solutions are throwing up information in what, in the past, was a black box,” says Ankur’s Ritu Verma. Digital agtech platforms today reach perhaps 10% of India’s smallholders, she adds. “We’re just at the tip of the iceberg, so that’s what is attracting investors.”
Keep reading, “Digitization of smallholder farming draws investors to Indian agtech startups,” by Jessica Pothering on ImpactAlpha.
Dealflow: Follow the Money
Electric charging operator EVgo to go public via a climate SPAC. The deal will value the Los Angeles-based electric vehicle charging network at $2.6 billion. The $175 million offering, topped with a $400 million PIPE, for “private investment in public equity,” will fund expansion for EVgo, which operates in 34 states. The spate of backdoor IPOs via such special purpose acquisition companies is unleashing a boom in venture capital investment into renewable energy, green infrastructure and EVs by making public-markets financing available for capital-intensive sectors – and providing exits for earlier-stage investors. More than 30 cleantech startups announced mergers with SPACs last year.
- Power players. EVgo will go public through a reverse merger with Climate Change Crisis Real Impact I Acquisition Corp., a SPAC led by NRG Energy’s former CEO David Crane, Credit Suisse veterans John Cavalier and Anne Frank-Shapiro, and Beth Comstock, who played a key role in GE’s clean-energy transformation.
- Sand Hill Road. Cleantech VC is officially back. “The venture industry moves toward returns,” venture capitalist Dan Oros of G2VP, told The Wall Street Journal. Three G2VP portfolio companies have agreed to merge with SPACs, including electric fleet company Proterra last week. “If investors start making huge returns in EV companies, battery companies, industrial-tech companies, then they will invest in those things.”
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Dealflow overflow. Some of the investment news crossing our desks:
- GoATL Fund invests $1 million for COVID recovery in Atlanta. The fund, part of the Community Foundation for Greater Atlanta, invested $250,000 in LiftFund to deploy 0% interest loans to Black, Indigenous and people of color-owned micro-businesses, and $750,000 in the Atlanta Neighborhood Development Partnership to finance affordable single-family rental housing.
- Jay-Z launches $10 million fund to invest in Black-owned cannabis businesses. The fund will be seeded by TPCO Holding Corp, a joint venture of Jay Z’s cannabis line Monogram (see, “‘Inclusive cannabis’ investors apply a racial-equity lens to a high-flying industry”) and Subversive Capital Acquisition Corp., which in December merged California-based cannabis companies CMG Partners and Left Coast Ventures.
- Investors commit to a social impact bond to reduce elderly loneliness in Israel. Social Finance Israel and Tel Aviv Foundation have commitments of almost $500,000 for the $700,000 bond. Retail investors can invest via the crowdfunding site Fundit.
- Agri-Business Capital Fund finances cocoa cooperatives in Côte d’Ivoire. Ecookim procures raw cocoa from its more than two dozen members, then processes and exports cocoa beans. The ABC Fund also provided a follow-on loan to Socak Katana, another cocoa cooperative in Côte d’Ivoire.
- Shoring up the supply of beekeepers in West Africa. The USAID-backed West Africa Trade and Investment Hub is supporting wax processor Koster Keunen to introduce beekeeping activities as a secondary revenue source to more than 14,000 farms.
Series: Walking the Talk
Patricia Farrar-Rivas: How I invest for equity. The founder and CEO of Veris Wealth Partners was shaped early in her career by her work in El Salvador, where she saw the effects of deep inequality and extreme wealth disparities. “This led me to realize that wealth is about more than money,” Farrar-Rivas writes in ImpactAlpha’s Walking the Talk series, in partnership with Confluence Philanthropy. “It is about opportunity, wellness and agency.” After buying her own home, she began saving and investing in socially-responsible funds. Farrar-Rivas invested most of her assets in Veris itself; the impact wealth management firm now manages more than $1 billion in client assets. “I see the faults in the current capitalist structure and believe we are working to make necessary changes,” she writes.
- From ‘responsible’ to solutions. Farrar-Rivas’s most significant private investment to date remains Veris Wealth Partners. Her portfolio includes funds and managers that are fossil-fuel free, and solutions focused on integrating diversity, equity and inclusion values, such as Trillium Sustainable Investment Opportunities and Pax World Global Environmental Markets Fund. She also invests through community development finance institutions and loan funds like RSF Social Finance, Community Visions and Oweesta. The impact and sustainable investing movement “is really taking hold now,” writes Farrar-Rivas. “We’re at a point now where it needs to happen much faster.”
- Portfolio update. Self-Help Credit Union’s Manuel Costa accepted ImpactAlpha’s 10x challenge last spring by taking a hard look at his own modest investment portfolio. In an update, Costa says he has boosted his allocations to impact – and his returns. “I probably did more than 10x on the impact side,” he writes. “What I’m proudest of, though, is just going through the exercise. Believing in my ability to shuffle things around without getting anxious about results.”
- Keep reading, “How I invest for equity,” by Patricia Farrar-Rivas on ImpactAlpha.
Agents of Impact: Follow the Talent
Mary Reynolds Babcock Foundation CEO Justin Maxson steps down to join the Biden-Harris administration as USDA deputy undersecretary for rural development… Brian Fernandes-Halloran is the new executive director of Halloran Philanthropies. Tony Carr, executive director since 2007, retired in December… Tony Berkley accepted a buyout from Prudential Financial last fall and has joined the Future Investment Initiative Institute in Riyadh, Saudi Arabia as head of investments. Register for FII’s conference, Jan. 27-28.
Blueprint Local has openings for a director of operations and for a (remote) investment analyst… MCE Social Capital is hiring a portfolio manager in Barcelona… Peloton is recruiting a senior manager of ESG/environmental sustainability in New York… Occam Advisors is looking for a team member to support its client Potencia Ventures in Portland… The Royal Foundation’s Earthshot Prize, which awards five £1-million awards each year for game-changing climate solutions, is accepting applications through Jan. 31… The American Sustainable Business Council is hosting a conversation with Gina McCarthy, head of the Biden administration’s Office of Domestic Climate Policy, on Thursday, Jan. 28.
Thank you for your impact.
– Jan. 25, 2021