The Brief | August 31, 2020

The Brief: Lessons from Chadwick Boseman’s Wakanda, COVID financing in California, BlueOrange in Brazil, secondary markets for crowdfunding, greenhouse-in-a-box

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Greetings, Agents of Impact! 

ImpactAlpha joins the chorus of voices celebrating the life of actor Chadwick Boseman. Wakanda, the mythical African country led by King T’Challa, Boseman’s character in Black Panther, “is a magnificent vision of a black technological and economic power, absent of financial hardship, and designed to realize the immense potential of each of its inhabitants,”  Impact America Fund’s Stefanie Thomas declared in introducing an investment framework inspired by the movie (see, “Wakanda’s on-screen lessons for ‘inclusion alpha’). “It presents a compelling statement on where the black community could be, had it not had to endlessly contend with the continuing legacies of racism and white supremacy.” The cultural power of Bosemen’s portrayal of T’Challa (and of Jackie Robinson and Thurgood Marshall, among others) demonstrates the potential returns on investment in powerful artistic voices: impact at scale. The Black Panther story, Thomas says, “shares with us a central belief that the seeds of a dynamic black future already exist within the minds of those among us—as long as, together, we are willing to step forward and author it.” Rest in peace, Chadwick

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California Rebuilding Fund strengthens regional community development financing infrastructure. With small business relief funding efforts bogged down in Washington, a growing network of state governments and private funders are stepping up to back community-based lenders and provide critical capital for small businesses trying to recover from the COVID crisis. The California Rebuilding Fund, green-lighted by state officials last week, will boost the lending capacity of community development financial institutions, or CDFIs, to make low-interest, flexible loans to truly small businesses. San Francisco-based micro-lender Kiva will manage the fund, which is anchored by a $25 million commitment from the state’s Infrastructure and Economic Development Bank. The California fund is modeled after the New York Forward Loan Fund, launched in May by New York Gov. Andrew Cuomo (see, “New York’s $100 million loan fund for small businesses is a model for a $1 billion national fund). Both funds were designed with help from Calvert Impact Capital in Bethesda, Md. and Minneapolis-based Community Reinvestment Fund, which piloted the concept in Chicago in March as the COVID shutdowns began. A similar effort is underway in the Southeast.

The goal is to create a national program backstopped by the federal government. The “community recovery vehicles” are designed to get more capital flowing through financial capillaries that serve hard to reach businesses. The California fund will buy loans off of CDFIs’ books to free up capital for further lending to businesses with fewer than 50 employees and less than $2.5 million in annual revenue, with an emphasis on those in historically underserved communities. “From the beginning, the goal was to create this kind of infrastructure for CDFIs so they can more proactively lend in this moment,” Calvert Impact’s Beth Bafford told ImpactAlpha. The country’s most populous state has some four million businesses with fewer than 500 employees, and up to 40% of are at risk of failing in the wake of COVID, particularly businesses owned by entrepreneurs of color. Said Luz Urrutia, CEO of Opportunity Fund, one of the participating CDFIs, “If we do not act quickly and intentionally, this multi-layered crisis may wipe out an entire segment of California’s economy – very small businesses.” 

Keep reading, “California Rebuilding Fund strengthens patchwork infrastructure for community development finance,” by Amy Cortese on ImpactAlpha.

Dealflow: Follow the Money

Blue Like an Orange invests in ‘transitional’ health care in Brazil. The $200 million structured debt fund extended 30 million reals (about $5.5 million) to Placi Cuidados Extensivos, which is developing the market for “transitional” health care in Brazil. Placi offers an alternative between acute hospital care and homecare, a new concept in Brazil, for patients needing rehabilitation and palliative care. In the COVID crisis – Brazil is second only to the U.S. in the number of cases – Placi is treating recovering patients who are not well enough to go home, freeing up hospital beds for critical cases. The funding will help Placi quadruple its patient load. “As an impact fund, making healthcare more inclusive and more humane is suddenly a big factor for us in the region,” Blue Orange’s Cristina Penteado told ImpactAlpha. “Placi has the potential to be a leader in the transformation.”

  • Latin America focus. Blue Like an Orange closed its first fund at $200 million in June. The firm was founded by former World Bank CFO Bertrand Badré to marshal private capital for the U.N.’s Sustainable Development Goals. It has backed small business lender Produbanco, ride hailing company Cabify, small business IT services firm Cimcorp/Qintess, and fintech venture Movii. The Placi financing is Blue Like an Orange’s second deal in Brazil and first in the healthcare sector. 
  • SDG targets. BlueOrange earlier this year released its framework for evaluating investments against the SDGs (see, Blue Like an Orange offers a report card for the Sustainable Development Goals”). The firm did not disclose Placi’s baseline ratings, but Suprotik Basu told ImpactAlpha the deal “comfortably cleared our minimum investment threshold” and scored particularly well on SDG 3.8 (“Achieve universal health coverage…”) and 3.c (“Substantially increase health financing…”). Basu said the deal will be evaluated annually on quality indicators, including rates of hospital-acquired infection and re-hospitalization.
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Crowdcube’s secondary market aims to give exits to equity crowdfunding investors. The U.K.-based equity crowdfunding platform isn’t exclusively focused on impact. But its new offering, which allows early investors to sell their stakes to other interested investors, could help more entrepreneurs raise capital by drawing more investors to the platform (see, Equity crowdfunding changes who gets financed). U.K.-based equity crowdfunding site Seedrs also hosts a secondary-market. 

ABC Fund backs INSOTEC to finance Ecuador’s small farmers. Quito-based INSOTEC provides loans and credit to Ecuador’s micro-business owners and smallholder farmers. Its $58 million loan book serves roughly 18,000 borrowers. A $3 million investment from the Agri-Business Capital Fund, or ABC Fund, will aid farmers in the COVID recovery (see, “Emerging markets Agri-Business Capital Fund secures €50 million). Check it out.

Acumen backs indoor farming startup Kheyti. Acumen invested alongside family office Ceniarth in Kheyti’s “greenhouse-in-a-box” solution, which serves 300 farmers in the state of Telangana with farm inputs, access to markets and financial and technical support.

Agents of Impact: Follow the Talent

Veris Wealth Partners appoints Richard Chen and Stephanie Cohn Rupp as managing partners to lead the firm’s impact investing strategy. Veris partners Steve Fahrer and Anders Ferguson are retiring… Santhosh Ramdoss, ex- of Skoll Foundation, joins Gary Community Investments as vice president of impact investing… Brian Negendra, ex- of Living Cities, joins Spring Point Partners as associate director of impact investments… Franciscan Missionaries of Divine Motherhood becomes the first U.K. signatory to the Catholic Impact Investing Pledge. 

Skoll Foundation is recruiting a chief operating officer… Nia Impact Capital is hiring a client services and operations manager and a financial analyst in Oakland… The Initiative for a Competitive Inner City seeks an associate in Boston… Unreasonable Group is looking for a press and communications manager in London, New York or Boulder, Colo… 17 Asset Management seeks a sustainable finance fellow in New York… Impact Entrepreneur hosts a virtual fireside chat with Blue Haven Initiative’s Liesel Pritzker Simmons on Thursday, Sept. 3.

Thank you for reading.

–Aug. 31, 2020