Greetings, Agents of Impact!
Featured: Rise of the Rest
J.D. Vance, the impact fund manager his partners would rather forget. Before he got Donald Trump’s nod in the Republican primary for Ohio’s U.S. Senate seat, J.D. Vance was – briefly – the face of an impact-oriented venture fund that championed startup investing in America’s heartland. On the strength of Trump’s endorsement, the marine-turned-millionaire venture capitalist and author of Hillbilly Elegy has pulled ahead in next week’s race. Vance’s role as an impact investor represents a chapter of his career that almost all involved would rather forget.
- Billionaire buddies. Vance’s very public ties to tech billionaire Peter Thiel are well known. Vance is less eager to tout his partnership with another billionaire, AOL founder Steve Case, an independent who endorsed Hillary Clinton in 2016. Vance had a prominent role in Case’s Rise of the Rest fund and multi-city bus tour, which focused on startups outside of the Silicon Valley, Boston and New York tech hubs. At Case’s Revolution LLC, the sponsor of the Rise of the Rest fund, Vance worked closely with another partner, Ron Klain, now chief of staff to none other than President Joe Biden.
- Financial elites. In his campaign for Senator, Vance has railed against “American elites” and “woke capitalism.” But for several years, from 2017 to 2020, Vance was raising money for Rise of the Rest from just such elites, contrasting with the hard-scrabble, up-from-poverty image he has parlayed into a book, movie, and now Senate candidacy. The fund’s backers included Trump nemesis Jeff Bezos, hedge fund billionaire Ray Dalio, former Hewlett Packard CEO Meg Whitman and venture capitalist John Doerr, along with members of the Pritzker family, the Waltons, the Kochs and more.
- Political pivot. Vance came to Rise of the Rest as the result of an abrupt strategic pivot by Case following Trump’s surprise election in 2016. Case and many others expected Klain, a long-time Washington insider, to become Clinton’s chief of staff, positioning Rise of the Rest as the kind of “private capital for public good” model that Clinton was expected to champion as president. With the shift in the political winds, Case pivoted to embrace Vance’s celebrity and recruit him to front Rise of the Rest’s investment strategy.
- Woke capitalism. At a Washington, D.C. event last May at conservative think tank The Claremont Institute, Vance sought to look like he is taking on the corporate class. He trolled the Ford Foundation and Harvard University, as well as tech companies like Google and executives like Bezos. Vance’s own ties to the tech and financial elite were left unmentioned. “The biggest businesses, the most powerful institutions, the most powerful banks in this country, have aligned themselves against us,” said Vance. “That’s what woke capital is really about.”
- J.D. who? Case has not discussed his partnership with Vance publicly since Vance launched his Senate campaign; he declined to comment for this article. At least nine other current and former Revolution employees, co-investors, portfolio founders and accelerator partners involved with Vance’s stint at Rise of the Rest declined to comment or failed to respond to emails or phone calls.
- Keep reading, “J.D. Vance, the impact fund manager his partners would rather forget,” by Dennis Price and David Bank on ImpactAlpha.
Dealflow: Climate Tech
TPG seals its Rise Climate Fund at $7.3 billion. With the final close, the climate fund on TPG’s Rise platform reached its hard cap. Recent investments include solar tracking company Nextracker, the merger of Bluesource and Element Markets to create a market for carbon credits, and Tata Motors to electrify passenger mobility in India. The climate crisis is accelerating, says TPG’s Jim Coulter. “As technology opens new markets and methods in everything from batteries to biogas and solar to sequestration, we are energized by the decarbonization opportunities ahead.”
- Scaling climate tech. More than 500 investors joined the fund, including institutions and corporations (for context, see “TPG Rise and Brookfield raise the stakes for climate funds”). TPG says representatives from 28 of the world’s leading corporations will convene at a TPG Rise Climate Coalition meeting next month to share progress on decarbonization strategies.
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Sun King scores $260 million to ramp up off-grid solar access in Africa. The off-grid solar sector in Africa is growing up. Sun King, launched as Greenlight Planet in Chicago 15 years ago. it was one of the earliest makers and distributors of solar lanterns and solar home systems for Africa. The company has stuck to a “direct to consumer” model, selling its products on a pay-as-you-go basis via 15,000 field agents in 40 countries. General Atlantic’s climate investing arm, BeyondNetZero, led Sun King’s $260 million Series D financing round. M&G Investments and ARCH Emerging Markets Partners also participated. Sun King’s Patrick Walsh said the funding allows the company to scale up “so we can meet the needs of the next billion energy consumers.”
- Solar lanterns. Sun King’s products are often the first step on the energy-access ladder for low-income Africans. Solar lanterns are the “backbone of the sector,” accounting for more than 60% of all off-grid solar products, according to the Global Off-Grid Lighting Association. Lantern sales grew through the COVID-19 pandemic, while sales solar home systems dipped and energy access declined overall. Sun King says its products have impacted more than 82 million people, saved consumers $4.4 billion in energy costs and eliminated 22 million tons of carbon dioxide.
- Solar consolidation. U.K.-based BBOXX is in talks to acquire Ghana-based PEG. PEG, which launched in 2013, sells pay-as-you-go solar systems to energy poor households in Ghana, Cote d’Ivoire and Senegal. Half its customers earn less than $3 per day; more than 80% had no access to grid energy or credit. PEG has expanded into new products, like solar irrigation pumps, and new business lines, like providing solar systems for rural health clinics. BBOXX’s products and services reach 2.5 million people in 11 countries; the acquisition would expand its presence in West Africa. A spokeswoman for BBOXX declined to comment.
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Dealflow overflow. Other investment news crossing our desks:
- BlackRock is among the investors in electric-vehicle charging startup FreeWire’s $125 million funding round.
- Florida-based Anuvia raised $225 million from Piva Capital and Riverstone Holdings to produce bio-fertilizers for commercial agriculture.
- The U.S. Department of Energy’s Loan Programs Office committed more than $600 million to two green energy projects: hydrogen storage in Utah and battery graphite production in Louisiana.
- Mumbai-based Truemeds secured $22 million to help chronic disease patients save on healthcare costs through tele-consultations and generic drug prescriptions.
- Indian e-commerce venture OneGreen raised an undisclosed amount of capital to connect consumers to clean, organic and sustainable essential products.
Signals: Proxy Season
Gates Foundation’s Berkshire Hathaway dilemma shines a light on proxy voting by charitable groups. One of the intrigues of this proxy voting season is how the climate and health-focused Gates Foundation will vote on a climate proposal before Berkshire Hathaway shareholders at this weekend’s “Woodstock for Capitalists” in Omaha, Neb. The proposal, flagged by Climate Action 100+, follows a similar resolution last year that garnered significant support from investors. It’s opposed by Berkshire Hathaway’s chief and Bill Gates’ pal, Warren Buffett. After sizable donations from Buffett, the Bill & Melinda Gates Foundation Trust holds more than 33 million shares in Berkshire Hathaway, worth more than $10 billion. Bill and Melinda Gates guide the endowment’s managers in voting proxies “consistent with the principles of good governance and good management,” according to the policy of the Gates Foundation Trust. We may never know how they vote. Unlike asset managers and pension funds with beneficiaries, foundations, family offices and other pooled funds are under no obligation to report how they vote their proxies. “There are significant pools of capital that end up having very significant opacity around their proxy voting,” Majority Action’s Eli Kasargod-Staub tells ImpactAlpha.
- Shareholder voice. More foundations have moved to align their investments with their missions. The Gates Foundation itself faced an uproar in 2007, when reports suggested its investments in polluting fossil fuel companies outweighed – and undermined – its grants aimed at improving health. Retooling portfolios and investment strategies can take years. “Proxy voting can change today,” says Kasargod-Staub. “We’re starting to see more and more philanthropic asset owners wake up to their power and influence.”
- Signals. “Even the mighty Warren Buffett has to be concerned about climate change,” says Danielle Fugere of As You Sow. The Gates Foundations’ support for or against the climate proposal before Berkshire Hathaway is not likely to make or break the vote, since Buffett controls a third of the voting shares. But it would send a signal. “We know where Mr. Buffett stands at this point,” says Kasargod-Staub. “The question is where everybody else stands.”
- Keep reading, “Gates Foundation’s Berkshire Hathaway dilemma shines a light on proxy voting role of charitable groups,” by Amy Cortese on ImpactAlpha.
Agents of Impact: Follow the Talent
Elena Pons is promoted to chief investment officer at MCE Social Capital… Brant Richards is named managing director of climate tech accelerator Third Derivative… Laura Gonzalez is promoted to senior program manager at Los Angeles Cleantech Incubator… Global Partnerships seeks an investor relations officer in Seattle… Calvert Impact Capital is hiring a senior loan officer, impact analyst, and strategy and new product development officer… Helena is recruiting a chief operating officer in New York.
Thank you for your impact!
– Apr. 28, 2022