The Brief | November 18, 2019

The Brief: Managing mission drift, future of work at Impact Engine, selling .ORG, robot recyclers, transition at Nuveen

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Greetings, Agents of Impact!

Featured: Impact Voices

Managing mission drift and driving impact in emerging markets: a roadmap. The impact of mission-driven companies can change with business circumstances, or disappear altogether. In Kenya, food distributor Twiga Foods last month moved to reduce costs by shifting sourcing away from smallholder farmers toward larger, commercial producers. Andela, which trains and deploys software developers, is concentrating on senior developers, laying off as many as 420 entry-level developers and closing training hubs in Nigeria, Kenya, and Uganda. The evolution of ventures’ impact strategies poses challenges for fund managers. “When a company chooses profit over impact, sometimes it’s for survival and sometimes it reveals an entrepreneur who used impact as a red herring to raise capital,” writes Uma Sekar of Capria, which has seeded a network of first-time impact fund managers in emerging markets.

In a guest post on ImpactAlpha, Sekar lays out the Impact Management Roadmap that Capria uses to benchmark funds. “Even if individual portfolio companies drift from impact, impact funds must stay true to their impact thesis,” Sekar writes. The roadmap provides guidance for embedding impact into term sheets, policies, shareholder agreements, investor pitch decks and agreements with portfolio companies. Qualitative alignment might include mapping to the U.N. Sustainable Development Goals. An example of quantitative alignment, Sekar writes: “Each investee has the potential to impact at least 100,000 base-of-the-economic-pyramid families.” A robust impact roadmap signals to investors that fund managers have “boots on the ground” experience, Sekar says. “Fund managers with a roadmap for proactively managing evolving impact and impact drift have a competitive advantage in capital markets.”

Keep reading, “Managing mission drift and driving impact in emerging markets: a roadmap,” by Uma Sekar on ImpactAlpha.

Dealflow: Follow the Money

Impact Engine focuses on the future of work with $25 million second fund. The Chicago-based accelerator-turned-fund-manager has raised a second impact fund to back entrepreneurs preparing and upskilling the U.S. workforce. The women-led benefit corporation will cut checks of up to $400,000 to software makers like Fixer, an on-demand home maintenance service that employs people from disadvantaged backgrounds; KickUp, which connects teachers with professional development opportunities; and Glimpse K12, which helps school districts deploy early education resources more effectively. Impact Engine is investing in other sectors too, like health (CancerIQ), financial services (Climb Credit) and housing (PadSplit), but sees the most opportunity in tech companies “straddling economic empowerment and education” to shape the future of work, partner Tasha Seitz told ImpactAlpha. Impact Engine’s $10 million first fund invested primarily in health and edtech startups. The new fund drew backing from Trillium Asset Management, the Illinois Growth and Innovation Fund, ImpactAssets, family offices and foundations. Learn more.

Ethos Capital to buy the registry that manages the Internet’s ‘.ORG’ domain. The nonprofit Internet Society was established 27 years ago to promote internet standards. One of its initiatives, Public Interest Registry, manages the .ORG domain, which has more than 10 million registrations worldwide. The registry is being spun off and sold to tech-focused investment firm Ethos Capital. Ethos committed to continuing the registry’s community and education programs.

AMP Robotics raises $16 million to automate recycling sorting. The Colorado-based company uses imagery and machine learning to pick recyclable goods out of municipal waste. Sequoia Capital backed the company, alongside Closed Loop Partners, BV, Congruent Ventures, and Sidewalk Infrastructure Partners, a spin-off of Alphabet’s Sidewalk Labs.

Agents of Impact: Follow the Talent

Nuveen’s Vijay Advani moves to executive chairman as Jose Minaya steps up to CEO (see, “Agent of Impact: Nuveen’s Vijay Advani”)… Wealthspire Advisors engages Align ImpactAcumen Latam Capital Partners seeks a senior portfolio associate in Bogotá… Oikocredit is hiring an investment officer in Amersfoort, Netherlands… Convergence is recruiting in Toronto and Hong Kong for an interim communications lead, a senior associate or manager of knowledge and a managing director or associate director of Asia.

Thank you for reading. 

– Nov. 18, 2019