The Brief | July 12, 2021

The Brief: Kinder capital, business digitization in the U.S. and Kenya, solar tech SPACquisition, KKS Advisors gets acquired, fungi-based protein

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

Greetings, Agents of Impact! 

Featured: The Reconstruction

Kind and usable: Two takes on the restructuring of finance and investment. Systemic flaws in traditional finance have left Black entrepreneurs and other founders of color with limited access to capital to grow their businesses, hire workers and build wealth. By rewriting underwriting, changing the definition of value, and providing support beyond capital, investors are reinventing investing to expand who and what gets funded in the third Reconstruction.

  • Practicing kindness to disrupt venture capital and deepen diversity (podcast). Can venture capital be kind? That question is at the heart of impact investing firm Kind Capital and its founder John Duong. Duong joins the latest episode of The Reconstruction podcast to share how investors can rethink venture capital by focusing on bold, long-term impact, wrap-around support for talented entrepreneurs – and authentic kindness. “This might sound a little fluffy. But I think, as at the individual level, we need to be kinder to ourselves and to each other,” he says. “It’s not a play on our firm’s name. I really believe that.” Read “Practicing kindness to disrupt venture capital and deepen diversity,” by Monique Aiken and Anjali Deshmukh, and listen to the podcast on The Reconstruction.
  • How usable capital can unleash Black business growth. Carter Transportation Group landed a large corporate contract with FedEx, but the minority-owned freight delivery service lacked a track record with traditional banking to secure insurance and financing to seize the opportunity. By relying on community relationships rather than collateral, San Diego-based Mission Driven Finance extended flexible financing that enabled Carter to take the contract. The firm now expects to add eight new trucks and hire more drivers. “This barrier to capital for Black-owned businesses hurts us all,” CapEQ’s Tynesia Boyea-Robinson writes in a guest post. Boyea-Robinson is spearheading The Path to 15|55, a plan to grow the American economy by $55 billion. “Black business ownership is a proven path to wealth and job creation that concurrently stimulates the U.S. economy.” Keep reading, “How usable capital can unleash Black business growth and close racial gaps,” by Tynesia Boyea-Robinson on ImpactAlpha.

Dealflow: Digitization 

Clearco secures $215 million from SoftBank to finance online businesses. Founders Andrew D’Souza and Michele Romanow launched Clearco (then Clearbanc) in 2015 to back e-commerce, mobile and software startups. The Black and woman-led business has provided $2.5 billion in inventory, revenue-based and other non-dilutive financing to 5,500 companies using a “20-minute term sheet.” SoftBank led the Toronto-based company’s Series C extension via its second Vision Fund. Clearco raised $100 million in April. Early investors include Founders Fund and Social Capital.

  • Inclusive capital. The company says it backs eight-times as many women-founded companies as the venture capital sector; 13% of its portfolio companies have BIPOC founders. Clearco “is fiercely dedicated to democratizing access to capital and a full suite of services that serve the founder journey,” said SoftBank’s Kristin Bannon.
  • Alt-finance. Other trade, supply-chain and inventory financing platforms, including U.S.-based Crowdz, Brazil’s Weel (now BS2) and South Africa’s The People’s Fund and Lulalend, are addressing gaps in business lending worldwide. Clearco is ramping up on data and advisory services that support its businesses’ growth.
  • More

Kenya’s MarketForce raises $2 million to digitize small businesses and streamline supply chains. The pandemic inspired a wave of enterprise technology providers to help businesses go online (see, “Helping small businesses in emerging markets survive and thrive in 2021“). A growing number of platforms are offering one-stop shopping for inventory and logistics. Nairobi-based MarketForce operates RejaReja, a business-to-business marketplace to help informal and small retailers procure food products and other essentials. MarketForce last month acquired Digiduka to help small retailers offer money services, like bill payments and money transfers. The Y Combinator startup raised its pre-Series A round from P1 Ventures, Launch Africa, V8 Capital, Future Africa, GreenHouse Capital, Rebel Fund and Remapped Ventures.

  • Essential businesses. Most emerging market consumers rely on informal and mom-and-pop shops for food, health and other daily needs. MaxAB last week raised $40 million for a business-to-business e-commerce platform for Egypt’s small retailers. Nigeria’s TradeDepot provides inventory sourcing and financing for informal retailers. Field Intelligence helps Africa’s independently-owned pharmacies forecast, stock and pay for their drug inventory. Twiga and East Africa Fruits offer inventory and logistics services for food retailers in East Africa.
  • Read on.

DuPont spinoff acquires George Serafeim’s ESG consultancy KKS Advisors. The chemical giant spun out DuPont Sustainable Solutions two years ago as an industrial consultant. Boston-based KKS is DuPont’s second acquisition, after last year’s purchase of mining consultancy Lodestone Partners. “We believe that managing risks and improving operations are fundamentally linked to sustainability and societal impact,” said DSS’s Davide Vassallo

  • ESG expertise. Serafeim, a professor at Harvard Business School, will continue to co-lead KKS’s 20 consultants in London and Athens as well as Boston (see, “Q&A with Harvard’s George Serafeim”). “The combination with DSS will allow us to focus not just on sustainability strategy, but also on implementation to ensure the clients we work with are supported on their full ESG and impact journeys,” KKS’s Anuj Shah told ImpactAlpha . Shah is an advocate for impact-aligned compensation frameworks.
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Dealflow overflow. Other investment news crossing our desks:

  • Woman-led blank check company Athena Technology will take public solar tech venture Heliogen.
  • Colorado’s fungi-based alt-protein company Meati secures $50 million for its goal of launching a commercial product next year.
  • German agri-marketplace Agrando raises $12 million from Munich-based Yabeo Impact AG, Sony Innovation Fund, Investbridge and prior investors.
  • Atlanta’s Cloverly raises $2.1 million to help companies measure and offset carbon emissions. 

Agents of Impact: Follow the Talent

Stanford University’s undergraduate program seeks a director of equity and inclusion… CITI Impact Fund is hiring a vice president for its spread products investment technologies (“SPRINT”) group… Circulate Capital is looking for a partner for Latin America and the Caribbean… Solstice is recruiting a director of operations… Spring Point Partners seeks a program officer for social justice in Philadelphia… And a special birthday wish to ImpactAlpha’s co-founder and agent of impact, Zuleyma Bebell.

Thank you for your impact.

– July 12, 2021