Greetings, Agents of Impact!
🤝 Catch up with ImpactAlpha’s Amy Cortese and Jessica Pothering this week at the GIIN Investor Forum in The Hague and with David Bank, Zuleyma Bebell and Dennis Price at next week’s SOCAP conference in San Francisco.
Featured: Climate and Culture
Klean Energy Kulture aims to bring swagger to climate to activate Black communities. Climate action needs some swagger. A hip-hop super producer and a “community organizing nerd” are teaming up to give the climate movement a lifestyle rebrand and activate Black and Brown communities, in particular. Out: Melting glaciers, shuttered coal plants and Birkenstock-clad hipsters. In: cultural icons, ownership stakes, good jobs and block parties for climate action in sustainable drip (or style, in hip-hop slang). The message: Clean energy is a lifestyle – and an economic opportunity to be seized by individuals and communities across the country. “Clean energy never felt this dope,” reads the tagline of Klean Energy Kulture, a new campaign and nonprofit that’s stepping up to spearhead the climate makeover.
- Movement makeover. Founders Corey Dennard, aka Mr. Hanky, a multi-platinum producer who grew up in Atlanta, and Michael Hawthorne, a “Beyond Coal” campaigner with the Sierra Club, plan to socialize the climate opportunity in the Black community by engaging influential hip-hop artists and entertainers as cultural translators. “If we don’t frame what clean energy culture looks like, we are well aware of what it looks like when someone else has framed it for us,” Hawthorne told ImpactAlpha. “You start mentioning economic opportunities [in the clean economy], that really perks people’s ears up,” adds Dennard. Climate tech investor Taj Eldridge is a Klean Energy advisor.
- Klean Kulture. Black communities in the U.S. too often face the brunt of climate change while having little say in utility planning or local and federal policymaking. A wave of Black-led climate ventures, celebrity rappers as climate investors and hundreds of billions in Inflation Reduction Act investment set to flow from Washington together present a unique opportunity to flip the narrative. Klean Energy Kulture, with “Ks” rather than “Cs,” is a nod to hip hop’s history of creative spelling and a signal to Black and Brown communities to join the clean energy movement.
- Black clean-tech. The organization will kick-off with a series of “block party” experiences next summer. The tour of historically black colleges and universities, or HBCUs, will leverage music, gaming and sustainable fashion to promote clean energy brands and opportunities as a way of life. The campaign will include climate innovation symposiums to highlight opportunities at Black-led climate ventures, and coordination with grassroots organizers to activate participants for lobbying and voting at key policy making moments. The goal is to accelerate the transition, says Hawthorne. “With that comes the opportunity to reinvest in communities and the clean economy.”
- Keep reading, “Klean Energy Kulture aims to bring swagger to climate to activate Black communities,” by Dennis Price on ImpactAlpha.
Dealflow: Returns on Inclusion
Common Future shifts from investee to investor and takes a stake in SOCAP. Common Future, the Oakland-based nonprofit focused on economic inequality, has taken a stake in SOCAP, or Social Capital Markets, the venerable impact investing conference that returns to San Francisco next week after a two-year pandemic hiatus. Fortified with seven-figure unrestricted grants from MacKenzie Scott and the Skoll Foundation, Common Future has been making the shift from convener and investee to partner and investor. SOCAP was restructured earlier this year by Sorenson Impact (for context, see “Sorenson takes over SOCAP to restructure its finances and produce its flagship event,”). Common Future’s “substantive stake,” alongside majority shareholder Sorenson, offers a way to “level up our influence via ownership,” Common Future’s Rodney Foxworth told ImpactAlpha. “We’re trying to demonstrate that hey, there’s a different way that impact investing can operate.
- Buying spree. In September, Common Future acquired Seattle-based nonprofit lender Community Credit Lab; the organizations have worked together on character-based lending initiatives. In May, Uncharted, the nonprofit social impact accelerator spun out of the Unreasonable Institute, merged with Common Future. With Uncharted, Common Future launched a policy incubator to help entrepreneurs and activists develop policies to broaden their impact (for context, see “Policy entrepreneurs’ are scaling up local innovation to drive inclusive growth”). CommonFuture also advises foundations on ‘participatory investing.’ “You should consider Common Future as a partner for your impact investments,” Foxworth says.
- Money + meaning. “There’s been a lack of inclusion, ownership and visibility for leaders of color who are central to advancing strategies, narratives and positions within the broader impact investing field,” says Foxworth, who will take a seat on SOCAP’s board. “We’re looking at the opportunities for really interrogating how the impact investing field operates. Is it just making capitalism more tolerable and removing the sharp edges? Or are we creating a new form of economy?”
- Read on.
Amazon Catalytic Capital to invest $150 million in underserved founders. Amazon Catalytic Capital will invest in at least 10 venture capital funds, as well as accelerators, incubators and venture studios. Amazon will deploy the capital over the next year to support more than 200 early-stage startups led by Black, Latino, Indigenous, women and LGBTQIA+ founders. “We’ve seen incredibly innovative ideas from entrepreneurs – from companies offering inclusive health services for women to startups helping companies mitigate climate impact for underserved communities,” said Amazon’s Peter Krawiec. “We want to ensure that these companies and their founders have the same access to capital as anyone else.” The Amazon initiative has backed four funds to date, including Black-owned Collide Capital and Energy Impact Partners’ Elevate Future Fund, which invests in underrepresented founders with low-carbon solutions for underserved communities. Elevate will partner with Amazon’s Climate Pledge Fund to invest in emerging climate tech companies.
- Returns on inclusion. Amazon Catalytic Capital is the latest initiative from the e-commerce giant targeting early-stage entrepreneurs from underrepresented backgrounds. Amazon in April launched AWS Impact Accelerator with $30 million to support early-stage startups led by women and minority founders. Last year, Amazon committed $150 million through its Black Business Accelerator to help Black business owners succeed as sellers on its online store.
- First-time fund managers. First-time impact fund managers tend to outperform more experienced peers. MassMutual is looking to invest $100 million in first-time Black, Latinx and Indigenous fund managers via its First Fund Initiative. The insurance company launched the program last year with $50 million. Investments include funds from Latino-owned venture firm L’Attitude Ventures and Black woman-led Impact America Fund. MassMutual also launched a $50 million MM Catalyst Fund last year to catalyze capital from other institutions in Black-led businesses based in its home state of Massachusetts.
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Dealflow overflow. Other investment news crossing our desks:
- Energy Capital Ventures closed its inaugural fund at $61 million to invest in tech companies driving the decarbonization, sustainability and digitization of the natural gas industry.
- Sustainable online shopping platform EcoCart snagged $14.5 million in a Series A round led by Fifth Wall Climate to help customers make climate-friendlier purchases.
- India’s BioPrime Agrisolutions scored $1.1 million in pre-Series A funding from investors, including agrifood impact investor Omnivore, to develop low-cost biotech-based products to make crops climate resilient.
- Tienda Pago raised an undisclosed amount in Series B funding to provide low-cost working capital loans for micro and small enterprises in Latin America, particularly those led by women.
Impact Voices: Catalytic Capital
Gawa Capital’s Huruma Fund: A case study in blending finance for farmers’ financial inclusion. An investment 18 months ago in Ecuador-based microfinance institution FACES has provided 3,500 smallholder farmers with access to financial services. The backers included several large private investors that once rejected the idea of investing in smallholder agriculture in emerging markets. The key to pulling in private capital was a blended-finance fund backed by multiple layers of catalytic capital, writes Luca Torre of Madrid-based impact investor Gawa Capital, which facilitated the investment through its €120 million Huruma Fund. “Blended finance can be a tremendous tool to attract private investors and to maximize impact,” Torre writes. Structuring blended-finance vehicles can be cumbersome, she warns, without support by catalytic capital providers. In a guest post on ImpactAlpha, Torre offers tips for fund managers building blended capital funds.
- Design discipline. Gawa zeroed in on smallholder farmers’ financial inclusion, articulated a theory of change and identified the type of financing needed, Torre explains. Commercial investors in Gawa’s prior funds initially declined to invest in the Huruma Fund because they were unfamiliar with farmer finance. “Our early stumbling blocks with Huruma revealed that we needed capital to reduce investors’ risk and capital to support investees in expanding their services to farmers,” Torre says. Huruma Fund leveraged €10 million in first-loss funding from the E.U., along with €20 million of subsidized debt from the Spanish government agency, FONPRODE, to raise €90 million from private investors including Spain’s CaixaBank and insurance company Allianz.
- Keep reading, “Gawa Capital’s Huruma Fund: A case study of blending finance for farmers’ financial inclusion,” by Gawa’s Luca Torre on ImpactAlpha.
Agents of Impact: Follow the Talent
Skoll Foundation seeks a managing director for its convening programs remotely or in Palo Alto, Calif… Morgan Stanley is hiring a sustainability reporting project manager… World Education Services is looking for a remote impact investing manager in New York… Spring Point Partners is recruiting an associate director of impact investments remotely in Philadelphia… One Project seeks a remote postcapitalist economic system architect.
The NYC Department of Consumer and Worker Protectionis looking for a director of legislative affairs… Palladiumis hiring a gender-smart investing specialist in Washington, D.C… Bitgreenseeks a project finance specialist in New York… The Pan American Development Foundationis recruiting a program associate in Washington, D.C… International Finance Corp.transfers the role of host of the Operating Principles for Impact Management to the Global Impact Investing Network.
Thank you for your impact!
– Oct. 11, 2022