The Brief | June 20, 2024

The Brief: Investing in women’s leadership in impact investing

The team at


Greetings Agents of Impact!

In today’s Brief:

  • Investing in women-led VC to deliver impact for women
  • Fund strategies for ownership through acquisition 
  • Dispatch from the front lines of the climate backlash

Transferring women’s wealth to women-led funds to build a more equitable economy. The massive generational wealth transfer now underway will see women control roughly $30 trillion in personal assets by 2030, triple today’s level. That gives women major influence in where to invest and how to allocate capital, Najada Kumbuli of Visa Foundation and Stephanie Heller of Bootstrap Europe write in a guest post on ImpactAlpha. Venture capital firms led or founded by women are three times more likely to invest in female entrepreneurs. In turn, women-led firms have been shown to generate higher revenues than founding teams that are not gender diverse. With more funding, businesses run by women could add up to $5 trillion to the global economy. Financial institutions, foundations and investment advisors “have a crucial role to play in empowering diverse fund managers, debunking prevailing myths, and paving the way for women’s financial advancement,” write Kumbuli and Heller. “Making intentional efforts now can help pave the way for the anticipated wave of women as investment leaders in 2030.”

  • 2X Challenge. Development finance institutions at the recent G7 summit agreed to mobilize $20 billion for gender-lens and gender + climate investments through 2027. The 2X Challenge surpassed earlier three-year pledges of $3 billion and $15 billion to mobilize a total of $33.6 billion. Joining the quasi-public DFIs in the 2X Challenge for the first time are private fund managers, including Deetken Impact, Global Innovation Fund, I&P, Developing World Markets, Advance Global Capital and the Global Gender-Smart Fund. To qualify as a 2X fund, investors must meet specified 2X criteria. The challenge plays “an important role in moving and unlocking more gender-smart capital at scale,” Heading for Change’s Sana Kapadia, a 2X advisor, tells ImpactAlpha (disclosure: Heading for Change supports ImpactAlpha’s coverage of climate + gender).
  • Follow the women. To shift capital to women-led funds, allocators must expand their networks by connecting with investment firms across professional platforms, say Kumbuli and Heller. That method led Visa Foundation to Bootstrap Europe, which focuses on venture debt and prioritizes sustainable expansion for high-growth tech companies. Funders can also spot women-led funds by prioritizing deep societal impact. Colombian venture investor EWA Capital, led by Patricia Saenz, seeks both financial returns and positive social impact with portfolio companies like Bogotá-based Bia Energy, which is helping nearly 900 businesses lower their energy consumption with smart energy meters.

Sponsored by AlphaMundi Foundation

Gender-smart strategies to change the business status quo in East Africa. East African recycling company Mr. Green Africa has recruited equal numbers of male and female waste suppliers through targeted efforts to find more female entrepreneurs. Asili Agriculture’s lending campaigns are reaching more female farmers. “Gender-smart business strategies can dramatically boost employee satisfaction and worker sense of safety, transform supplier relationships, and build business resilience,” write Patricia Chin-Sweeney and Sawa Nakagawa of AlphaMundi Foundation. The nonprofit affiliate of AlphaMundi Group, in partnership with DEG Impulse and Value for Women, ran “gender diagnostics” at five East African companies to identify strategic gender interventions, followed by staff training, implementation support and impact tracking to monitor gender-lens shifts.

  • Scaling gender-smart strategies. The partners learned that instituting effective gender strategies requires buy-in from senior business leadership. Company-wide training is key to sensitization and culture shift. Openness is critical. “The best gender-smart strategies are realized ‘from within’,” say Chin-Sweeney and Nakagawa. Targeted initiatives are more effective than complete gender-lens overhauls.
  • Go deeper

Dealflow: Ownership Economy

Through acquisitions, New Majority Capital seeks to build small business ownership for underrepresented entrepreneurs. Rhode Island-based New Majority Capital helps diverse operators buy profitable businesses with established customers and revenues as a strategy for bridging wealth gaps and creating a pathway for asset ownership. The “silver tsunami” of retiring small business owners, who represent roughly $14 trillion in enterprise value, presents a major wealth-transfer opportunity in the next decade, says New Majority’s Havell Rodrigues. “This is a one-time opportunity to take an existing, good, cash flow-generating business, treat it as an asset, and help transition ownership of that asset to an underrepresented entrepreneur.”

  • Returns on inclusion. New Majority is aiming to raise $50 million to provide equity capital to at least 50 Black, Brown, female, immigrant and LGBTQ+ entrepreneurs. Skoll Foundation and other backers have committed approximately $5 million. New Majority “offers an equity-centered, non-extractive approach to support underrepresented entrepreneurs and reduce barriers to asset ownership, which is key to building wealth but remains systemically out of reach for many,” Skoll’s Liz Diebold told ImpactAlpha.
  • Ownership accelerator. Through its bETA accelerator, New Majority has trained and vetted 100 diverse entrepreneurs. New Majority will pair equity capital with other types of funding from banks, community development financial institutions, and the US Small Business Administration’s 7(a) loan program. New Majority has so far helped 15 entrepreneurs acquire small businesses, including Nigerian native David Owoyemi, who secured a $2.1 million financing package to acquire DLTC Landscape Contractors, a small landscape installation and maintenance services business in Connecticut. Portfolio entrepreneurs commit to sharing at least half of their yearly net revenues with New Majority until they’ve returned twice the fund’s capital. The new business owners agree to allocate 10% of their company’s profits to their employees.
  • Keep reading.

BII commits $15 million to Meridiam to spur renewable energy development in Tanzania. The Tanzanian government is nearly halfway to its goal of providing universal energy access to the country’s 65 million people by 2030. Funding from British International Investment will help develop up to 7.6 megawatts of new wind and hydropower projects in southern Tanzania, bringing sustainable power to low-income rural communities. The investment will be directed to Rift Valley Corp., acquired last year by the Paris-based sustainable infrastructure developer Meridiam. Rift Valley Corp. owns 30-megawatts of clean energy assets and two rural distribution networks serving more than 75,000 people. Learn more

Accion invests $17.5 million to boost Amartha’s microlending in Indonesia. Indonesia’s small businesses need an estimated $234 billion in additional growth capital by 2030. Financial services provider Amartha has loaned more than 25 trillion rupiah ($1.6 billion) to 2.5 million women-led businesses in rural and peri-urban areas of the country. The investment from Accion’s $153 million Digital Transformation Fund will help Amartha deploy digital financial services, strengthen its analytics, and position the firm “at the forefront of fintech innovation” with data and AI, said Amartha’s Ramdhan Anggakaradibrata. Check it out

Dealflow overflow. Investment news crossing our desks:

  • MIT spin-out VC fund The Engine raised $398 million for its third fund to invest in climate tech, health innovation and other “tough tech.” (Axios)
  • Public benefit corporation PayJoy raised $25 million to provide “fair and responsible” digital and cash loans to customers accessing formal financial services for the first time. It has disbursed more than $2 billion to 11 million customers, mostly in Latin America. (PayJoy)
  • Crux, a marketplace for trading US tax credits for green infrastructure projects, closed an additional $9 million for its Series A round from energy developers Clearway Energy Group, EDF Renewables, Intersect Power, Pattern Energy and other investors (see, “Marketplaces for federal tax credits unlock capital for green projects”). (Crux)
  • BTG Pactual Timberland Investment Group in Brazil inked an agreement to provide Microsoft with eight million carbon-removal credits through 2043. The credits will be generated through the Timberland Investment Group’s $1.2 billion reforestation and land restoration strategy in Latin America. (BTG Pactual)

Signals: Fiduciary Future

On hearings and being heard. The most dramatic moment at last week’s US House Judiciary subcommittee hearing on “decarbonization collusion” came when Rep. Harriet Hageman, Republican of Wyoming, glared at witnesses Mindy Lubber of the nonprofit Ceres, Dan Bienvenue of pension fund CalPERS, and Natasha Lamb of impact fund Arjuna Capital and declared: “You are evil.” Cheap oil and gas drives American prosperity, she said, and “every single one of you and your organizations wants to destroy that.” Led by Rep. Jim Jordan, the committee has accused a broader “climate cartel” of antitrust infractions for coordinating climate action. In his latest Fiduciary Future column on ImpactAlpha, Andrew Behar of nonprofit As You Sow, which has also been in the crosshairs, says shareholders are instead working to unleash American ingenuity and competition on the energy transition. “There are tremendous opportunities to reduce the cost of energy and unleash American prosperity by investing in renewables like wind and solar,” Behar writes. “Meanwhile, actual oil cartels allegedly do collude to set prices, increase inflation and reduce prosperity.”

  • Coordinated attack. The antitrust investigation is part of a broader, coordinated campaign by conservative strategists and some Republicans to snuff out efforts to redress racial inequities and to expand environmental, social and governance investing. The campaign includes lawsuits against small grant programs for founders of color operated by Atlanta-based Fearless Fund and San Diego-based Founders First (see, “Political risk: Antitrust hearing escalates Republican attacks on climate action”). At stake is the future of fiduciary duty and the understanding of material risks. “The committee appeared concerned about Climate Action 100+, an investor-led initiative that educates shareholders on financial risks to their portfolios from the world’s largest polluters,” Behar writes. “Apparently, the entire free market was ‘colluding’ to protect itself from the risks of climate change.”
  • Keep reading Behar’s latest installment of Fiduciary Future. Have a reaction or dispatch of your own? Drop us a note

Agents of Impact: Follow the Talent

Nick Chaset, formerly of Ava Community Energy, joins Octopus Energy Group as executive vice president for North America… Co-founder Phyllis Kurlander Costanza has left OutcomesX. “It’s extremely bittersweet,” Costanza wrote on LinkedIn. She declined further comment… Croatan Institute welcomes Duy Nguyen, Zaina Maqbool and Stephanie Silva as its new BIPOC Leaders Advancing an Inclusive and Sustainable Economy interns.

James Gifford steps down as head of sustainable and impact advisory at UBS… The Children’s Investment Fund is looking for a climate analyst in London… Moody’s is hiring an ESG associate in New York… The Solar and Energy Loan Fund has multiple openings in Florida and Georgia… The Opportunity Finance Network is accepting nominations until Friday, June 21 for its annual Ned Gramlich Lifetime Achievement Award for Responsible Finance.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– June 20, 2024