The Brief | May 3, 2023

The Brief: Investing in reproductive care, gender lens on fintech, clean cookstove acquisition, long-duration batteries, Chicago’s muni impact investors

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Greetings, Agents of Impact!

Featured: Investing in Health

Opportunities for impact investors to champion reproductive care after Dobbs. The legal battles over access to abortion medication underscore the intensifying insecurity and vulnerability of women’s access to healthcare in America. Impact investing in reproductive healthcare was rising even before last year’s Supreme Court decision overturning Roe v. Wade. The Dobbs ruling ignited action, especially in underserved communities. “A significant number of reproductive health initiatives – both for-profit and nonprofit – do generate revenue while improving quality of care and access for patients, including those from systematically marginalized populations,” write Bridgespan Group’s Marina Fisher, Nate Wong, Lauren McDermott and Roger Thompson. Not all funding needs in the reproductive field are well suited for impact investing, the authors acknowledge, and many foundations and wealth-holders see the field as the domain of philanthropy. To help both impact investors and catalytic philanthropists concerned about reproductive rights and outcomes, Bridgespan offers funders a roadmap to understand how best to direct their dollars. 

  • Five opportunities. Bridgespan’s research identified five impact investing categories across the spectrum of reproductive care. Among them: investing to reduce harm. Choix Health, for example, is a for-profit telehealth provider working to expand access to services for people seeking abortion and reproductive care, despite restrictions for such care in 19 states. It offers sliding-scale rates, multilingual specialists and partners with local reproductive health providers.
  • Equity emphasis. Investment opportunities in diverse-led healthcare businesses and organizations include tech companies providing at-home pregnancy and postpartum care. Cayaba Care uses “maternity navigators” to bolster the support networks of pregnant women and new mothers by connecting them with nurses, nutritionists, patient care coordinators and peers.
  • Continuum of capital. There’s a critical role for philanthropic grants, particularly for reproductive rights and justice nonprofits. Orchid Capital Collective is using blended capital to match different investment tools to its investees’ needs and phases of growth. “The magnitude of the current challenge – and thus the opportunity – requires a large-scale infusion of capital from diverse sources,” the Bridgespan authors write. “This makes reproductive health an attractive area for impact investment.”
  • Keep reading, Opportunities for impact investing to champion reproductive care after Dobbs,” by Bridgespan’s Marina Fisher, Nate Wong, Lauren McDermott and Roger Thompson on ImpactAlpha.

Dealflow: Gender Smart

Anthemis scores backing from Visa and BMO for women-focused fintech fund. The growing recognition of gender-based investing hasn’t moved the needle significantly for women-led startups. Companies led by all-female founders received 1.9% of venture capital funding last year, or around $4.6 billion, down from a record 2.4% in 2021, according to Pitchbook. “When the economy tanks, discrimination feels justified,” Anthemis Group’s Ruth Foxe Blader said. “Managers double down on what they perceive as ‘safe’ and ‘boring.’ Investing in women is still perceived as high-risk.” The London and New York-based manager’s Female Innovators Lab Fund invests in early-stage, women-led fintech ventures aimed at female consumers and business owners. New investors, including Visa and BMO, the large banking group, brought the fund’s total to $50 million. The fund is anchored by Barclays and insurance giant Aviva

  • Embedded finance. Anthemis focuses on companies integrating financial services into other business models while applying a gender lens; target sectors include e-commerce and beauty. The fund has backed startups like Swaypay, a payment system for social media influencers, and Upkeep, a booking and payments platform for cosmetic treatments.
  • Gender lens. Anthemis has a female co-founder, and a majority of its employees are women. Nearly half of the firm’s portfolio companies are women and/or diverse-led. Separately, US-based Horizon Capital raised $254 million to invest in Ukrainian tech, manufacturing, food processing and consumer goods. The fund was designated a “flagship fund” under the 2X Challenge for gender lens funds.
  • Check it out.

Dealflow overflow. Other investment news crossing our desks:

  • Fresh off a big raise last year, off-grid solar company Sun King expands into cookstoves with acquisition of PayGo Energy. (Sun King)
  • UK-based home building firm Persimmon invested £25 million in TopHat, a maker of low-carbon modular housing. (Persimmon Homes)
  • Nigeria’s Nomba (formerly Kudi) raised $30 million to provide banking and payment services to small businesses. (Techloy)
  • Elemental Excelerator, Italian oil company Eni and others backed Energy Dome, which is making long-duration batteries using liquid carbon dioxide. (Energy Dome)
  • Climate innovation fund MCJ Collective invested in Windfall Bio, which in March raised $9 million to capture methane emissions from farms and convert it to fertilizer. (MCJ Collective)

Impact Voices: Muni Impact

New crop of muni-bond investors helps Chicago fund equitable COVID recovery. Chicago’s first “social bond” offering was not that different from any other Chicago municipal bond in the Windy City. The city borrowed $160 million dollars from investors, and will repay investors over time, with interest, from local sales tax revenues. “The new wrinkle here is in the marketing – both the kind of investors the city courted and what it told them,” Oscar Perry Abello writes in a post on ImpactAlpha, originally published by Next City

  • Local + retail. The city gave Chicago and Illinois residents priority over other investors and dropped the minimum investment to $1,000, from $5,000. “We were very interested in maximizing retail participation, and in particular, Chicago retail participation so that Chicagoans can invest in their own community,” says Jennie Huang Bennett, the city’s chief financial officer. Her office tells Abello that 92 out of an estimated 200 investors in the offering invested less than $25,000, including 10 investors who invested the minimum of $1,000.
  • Social bond. The offering, Chicago’s first-ever “social bond” issuance, was marketed to so-called environmental, social and governance, or ESG, investors. Those investors’ priority, Huang Bennett’s team found, was “the ability to track impacts out of the projects that are being financed and the use of proceeds.” As with social bonds issued by New York and Atlanta, attracting new ESG investors into the offering drove down the city’s cost of capital. Says Huang Bennett, “We were able to benefit from that through the three to five basis points over the non-ESG financing” for total savings of about $500,000 in interest over the life of the bonds.
  • Use of proceeds. To curate the bond offering, the team pulled seven projects with intentionality around racial justice from the $1.2 billion Chicago Recovery Plan. Among them: planting 15,000 new street trees in historically disinvested neighborhoods, converting motels and single-room occupancy buildings into housing for people transitioning out of homelessness, grants to community development projects on Chicago’s South and West Sides, and replacing the city’s fleet of gas-powered vehicles with electric vehicles.
  • Keep reading, “New crop of muni-bond investors helps Chicago fund equitable COVID recovery,” by Next City’s Oscar Perry Abello on ImpactAlpha. 

Impact muni bond: Post-COVID hospital infrastructure expansion in the Twin Cities. Minneapolis, Minn. is issuing a $363 million bond this week to finance the construction of a 10-story surgical and critical care pavilion at the Abbott Northwestern Hospital. Minnesota experienced some of the nation’s worst COVID surges in 2020 and 2021; rising costs and falling revenues meant hospitals put the brakes on infrastructure projects that are vital to patients’ safety. Projects financed by the bond, highlighted as part of ImpactAlpha’s collaboration with HIP Investor on upcoming bond issues with social and/or environmental significance, will boost safety and quality levels of healthcare services, expand access to healthcare innovations and boost energy efficiency.

  • Disproportionate impact. The bond is “worth considering,” wrote Anna Rautenberg of HIP Investor, which gives Abbott a “net positive” HIP Rating of 58%. HIP measures the impact of over 5,000 individual hospitals across the US, as well as hospital systems through 15 metrics, including “disproportionate hospital share,” which rewards institutions with a significantly disproportionate number of patients on Medicaid or uninsured.
  • Room for improvement. Abbott excels in its health outcomes, patient satisfaction and case mix (i.e. treating a high number of resource-intensive patients), according to HIP. The analysis highlights gaps in the hospital’s performance in providing equitable, accessible and affordable healthcare, says Rautenberg, “which should encourage the hospital to take actions to address these gaps and to support disadvantaged communities more efficiently.”
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Agents of Impact: Follow the Talent

The American Clean Power Association names Sarah Beerbower, ex- of the U.S. Chamber of Commerce, as vice president of member relations… Aina Abiodun, ex- of Salt Climate Tech, replaces David Kenney as president and executive director of VertueLab… Veris Wealth Partners seeks a wealth manager and a senior wealth manager in New York… LISC is hiring for several roles, including an impact reporting and data management director, an investor relations analyst, and an asset manager.

The Gates Foundation-backed Investing in Innovation Africa, or i3, is accepting applications from early and growth-stage healthtech innovators working in African healthcare supply chains… Tomorrow is the last day to apply for scholarships for the Oxford Social Finance Programme, a five-day program that offers leadership skills training to impact investors.

Thank you for your impact.

– May 3, 2023