The Brief: Investing in impact media, KKR’s stake in labor’s future, solar bots, edtech dealflow, who’s afraid of Elizabeth Warren?



Greetings, Agents of Impact!

ImpactAlpha Series: Creating Impact 

Investing in the impact of powerful new voices in film and video games. Movie makers and video game producers have what mission-driven investors want: impact at scale. Movies like Coco and Black Panther (seen by more than 175 million people) reach worldwide audiences and drive forward deep and rich conversations. Video games like Fortnite and Minecraft (78 and 91 million users, respectively) absorb the attention of young people, as many parents know all too well. These cultural creations are scalable in another way investors like: revenues. Black Panther’s worldwide revenues to date are $1.29 billion; Fortnite pulled in a staggering $2.4 billion last year. Blockbuster movies and video games have demonstrated power to shift cultural norms and drive legislative change. The canonical example: the role of TV series Will & Grace in shifting popular attitudes toward gay marriage. Storytellers now exploring criminal justice reform and mass incarceration include movie producer Scott Budnick (of “Hangover” fame), who has launched the production house One Community and raised $50 million to finance a slate of movies.

“Creating Impact,” an ImpactAlpha series sponsored by Upstart Co-Lab, explores the impact and investability of authentic stories that connect with audiences, and help those audiences connect with each other. “You have a range of voices that want to be heard and see the potential of our new tech reality to make that possible,” says Upstart’s Laura Callanan. A raft of new distribution channels (with Disney+ and AppleTV+ coming soon) allows media producers to “sell into the long-tail of the market in a way that you never could before.” New financing mechanisms are opening the market to investors seeking a range of impact and financial returns. Impact investors who may never have considered themselves media moguls can now invest in creative funds, production slates and media ventures such as Essence VenturesE-Line Media and Macro. A forthcoming report from Upstart identifies at least 18 impact media projects collectively raising more than $232 million.

Keep reading, “Investing in the impact of powerful new voices in film and video games,” by Dennis Price on ImpactAlpha.

DealFlow: Follow the Money

KKR Global Impact looks to leverage labor data with majority stake in Burning Glass. The private equity giant’s $1 billion impact fund invested an undisclosed amount in Boston-based Burning Glass, a software company that sells insights into labor market patterns to companies and educators. Burning Glass says it analyzes hundreds of millions of job postings and career transitions to shed light on issues like the aging workforce and looming skills gap in the infrastructure sector to the skyrocketing interest among employers for LGBTQ diversity. “Predicting tomorrow’s jobs, and the skills needed for those jobs, will empower workers to navigate [the technology] disruption, companies to upskill their workforce, and policymakers to promote economic growth,” KKR Global Impact’s Ken Mehlman said in a statement. KKR Global Impact, which recently crossed the $1 billion mark in fundraising, has also invested in energy efficiency services provider Barghest Building Performance and Indian waste management company Ramky Enviro EngineersMore.

Nocca Robotics raises seed funds for robots that clean solar panels. Installing solar panels is one thing. Optimizing their efficiency is another. Today’s solar technology converts roughly 20% of the light it captures to power. When panels are dirty, they can lose up to 25% of their efficiency. Pune-based Nocca Robotics is trying to help India’s solar farm operators to keep their panels running at peak performance. It has raised $1.7 million from the Indian Angel Network Fund to manufacture its waterless solar panel cleaning bots. “Coming up with innovative alternatives to all water-based industrial processes should be a top priority of our age,” Nocca’s Harshit Rathore said in a statement. Check it out.

Owl Ventures backs Amira Learning’s literacy tool for children. Amira makes AI-based software for use in schools that can listen to children as they read and detect reading accuracy, potential challenges, and even learning disorders. The Series A round will help the San Francisco-based company reach more schools and build an English as a Second Language tool for native Spanish speakers.

Two edtech ventures raise funding to boost student mentoring and networks. Washington DC-based Localized, which helps students in the Middle East and North Africa acquire career advice and build professional networks, secured $1.2 million from Bisk Ventures and Diverse Next Wave Impact, a diverse founders startup fund. Mentor Collective, which connects adult, online, and first-year college students to mentors to help them flourish, clinched $3 million, led by Lumina Foundation.

Signals: Ahead of the Curve

Who’s afraid of Elizabeth Warren? Big banks, if you believe CNBC’s Jim Cramer and his Mad Money crew. In a snippet of video that went viral, Cramer said bank execs are “fearful of her winning” and have told him, “She’s gotta be stopped” (though in Cramer’s rambling style he may have said he was not hearing banks say that). Meanwhile, in The Wall Street Journal, former Texas Sen. Phil Gramm and Mike Solon railed against Warren’s brand of “accountable capitalism” as an “assault on retiree wealth.” On the eve of tonight’s debate in Houston among Democratic presidential contenders, some pundits said attacks on Warren as an anti-Wall Street crusader are campaign-ad fodder (Warren herself re-tweeted the Cramer clip, adding cheekily, “I’m Elizabeth Warren and I approve this message”). But what if Warren’s policies are actually pro-business? Consider:

  • Nearly 200 CEOs just embraced stakeholder capitalism. Warren’s Accountable Capitalism Act in many ways aligns with the Business Roundtable statement pledging respect for employees, customers, suppliers and communities in addition to shareholders. The new conventional wisdom is that such an approach can generate higher living standards and long-term economic growth. It may be tough even for Republicans to argue for a return to shareholder primacy.
  • Billionaires for higher taxes. In a letter to all of the candidates in June, 19 billionaires called for higher taxes, declaring, “America has a moral, ethical and economic responsibility to tax our wealth more.” Bill GatesWarren BuffettJamie Dimon and Ray Dalio have all called for higher taxes on the richest of the rich. A paper by two French economists found that if Warren’s wealth tax plan had been in place since 1982, Jeff Bezos would have paid an additional $73 billion in taxes – and still be left with $87 billion.
  • Climate shocks. Some automakers, utilities and even oil and gas companies support regulations on automobile fuel standards and methane emissions and other environmental policies. ExxonMobil supports the Paris climate agreement. Jim Cramer followed up his TV quips with a tweet that tried to clarify: “The Chinese have more to fear from Warren than Trump because Warren knows the Chinese are the world’s worst polluters and the planet must be a stakeholder!”
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Agents of Impact: Follow the Talent

National Community Investment Fund seeks a credit analyst and an investment analyst in Chicago… Grand Challenges Canada is hiring an investment manager in Toronto… JUST Community is looking for ambassadors in Austin to the nonprofit reimagined the power of microfinance for the U.S.

Thank you for reading. 

– Sept. 12, 2019

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