Greetings, Agents of Impact!
Featured: Impact Voices
Philanthropy can do more to catalyze private capital for public good. Less co-investing. More more willingness to take lead, early, junior and gap-filling positions that draw additional capital to solutions that matter. Many foundations are doing more intentional impact investing but too few are seizing the catalytic potential of their capital to mobilize private capital for public goods (see, “The supply of catalytic capital is bigger than expected. Demand is even bigger”). “Philanthropy’s goal should not be to invest alongside SoftBank or TPG,” writes David Lynn of San Diego-based Mission Driven Finance in a guest post on ImpactAlpha. “Foundations should instead be working to entice the SoftBanks of the world to invest where it will have the most impact.” Case in point: With the Freedom100 Fund, Mission Driven Finance is raising $1 million in 3% notes on top of $250,000 in donations to help immigrants post bond and get out of detention facilities at no cost – a leverage ratio of 4:1.
For starters, more foundations need to measure such capital leverage. “Philanthropy only has to measure one thing,” says Lynn: how much capital followed your investment? The approach puts the focus on finding good solutions that scale and attracting more capital from private and public sources (see, “Blended finance is mobilizing billions, not trillions, for the global goals”). The move to such a mission-first stance may require foundations to reconstruct their investment committees. Perhaps the program-grants and investment committee meetings should be combined, he suggests. Investment policy statements might include a target or allocation to capital leverage. “These concessionary investments do outperform when you zoom out to a global view or expanded time-horizon,” he says, “and often enable deeper impact by the investee.”
Keep reading, “Philanthropy can do more to catalyze private capital for public good,” by David Lynn on ImpactAlpha.
Dealflow: Follow the Money
True Balance closes $23 million to expand mobile payments to rural India. The Gurgaon and Seoul-based startup launched in 2014 to help prepaid mobile customers in India check their cellular data usage and balance. It discovered mobile customers also lacked the ability to make utility payments and to access small loans and other products, such as “mosquito insurance” against mosquito-borne diseases. The app has been downloaded 70 million times, primarily by mobile users in India’s smaller cities. A roster of Korean investors backed the company’s $23 million Series C round to help it expand to India’s rural areas. True Balance says its mission is aligned with the government’s Digital India policy to “promote inclusive growth that covers electronic services, products, devices and job opportunities.” Check it out.
Gig economy insurer Verifly rebrands as Thimble and raises $22 million. The founders of Verify picked a niche demographic – drone pilots – when they launched the insurance company in 2016. They expanded their focus last year with insurance products for contract and part-time workers and expect to sell 100,000 policies by year’s end. Now operating as Thimble, the company offers job-by-job liability insurance policies for handymen, landscapers, beauticians, and dog walkers for as little as $5. Customers can extend the policies for an hour at a time. Three out of four policyholders are first-time business-policy buyers. AC, Slow Ventures, AXA Venture Partners, and Open Ocean backed the company’s Series A round. Gig and contract workers now make up one-third of the U.S. workforce. Read on.
French responsible investment firm Mirova acquires former Althelia fund. The affiliate of Natixis Investment Managers first picked up a 51% stake in Althelia Ecosphere, a sustainable land and ocean-focused fund manager, in 2017. Now called Mirova Natural Capital, the firm has been fully acquired by Mirova.
Caribu secures $3 million for family learning app. The Miami-based startup’s app lets parents, grandparents and friends play learning games with kids from a distance. The seed round includes $1.7 million in crowdfunded equity on top of backing from Rise Of The Rest, AT&T, Halestreet Investments, and Be Curious Partners.
Papa raises $10 million to help seniors combat loneliness. The startup, also from Miami, raised funding for its platform that links isolated seniors to college students. A similar platform, Mon Ami, last week raised $3.4 million.
Signals: Ahead of the Curve
New Zealand impact investments could grow six-fold over five years. Just 1% of New Zealand’s private assets under management, or $889 million, are in impact investments, according to the first in-depth study of the country’s impact investing market. Last year, an Impact Enterprise Fund in the country fell short of its fundraising target. Still, “There’s high interest and demand for impact investments from all investor groups, spanning diverse asset classes and areas of impact,” said Simon O’Connor of the Responsible Investment Association Australasia. RIAA and the University of Auckland surveyed 100 investors representing $83.5 billion in assets under management. Respondents said they planned to allocate $5.9 billion to impact investing over the next five or so years, with $3.4 billion coming from active impact investors and $2.5 billion from newcomers to impact. The biggest barriers to growth: a lack of investable deals and the need for more evidence of social and financial performance.
- Sovereign impact. New Zealand’s $42 billion Super Fund, a sovereign wealth fund, was separated from the data to avoid distorting results. The fund has $3 billion, or 7% of its AUM, in sustainable and impact investments in sectors including sustainable forestry, clean energy, affordable housing and health, and asset classes including pay for performance instruments, private debt and equity, and infrastructure.
- Indigenous values. Maori community principles such as kaitiakitanga, or guardianship and sustainability, have a natural affinity with impact investing. Maori investors are expected to invest up $2 billion per year over the next ten years. “There is an opportunity and indeed increasing momentum for Maori notions of impact to become a fundamental part of New Zealand’s national impact investment identity,” write the authors. One example: TAHITO, an ethical investment fund slated to launch by year-end, will apply Maori values to its public equities selection. Share this.
Agents of Impact: Follow the Talent
Mercy Corps appoints Beth deHamel, the organization’s chief financial officer, as interim CEO, succeeding Neal Keny-Guyer, as the organization wrestles with the fallout from a sexual abuse scandal involving its late co-founder. DeHamel also sits on the board of Mercy Corps Ventures, the nonprofit’s social impact investing arm… The New Economy Project seeks two attorneys to join its legal team in New York… Also in New York, Veris Wealth Partners is looking for an impact investment research intern.
Thank you for reading.
– Oct. 16, 2019
