Greetings Agents of Impact! ImpactAlpha’s David Bank and Jessica Pothering will be in Amsterdam this week at the GIIN Impact Forum. Roodgally Senatus is in Los Angeles for the annual conference of Opportunity Finance Network. Say hi!
And, don’t miss these upcoming ImpactAlpha partner events:
- Oct. 28-30: SOCAP24 (San Francisco) – use code “s24_ImpactAlpha” to save $250
- Nov. 4-6: 2024 AVPA Conference (Nairobi) – use the code “PdJ&nuq” to access a discounted “Partner” ticket
- Nov. 5-7: FLII CA&C (Costa Rica)
- Nov. 13-15: European Microfinance Week 2024 (Luxembourg) – Click the link to save €200
In today’s Brief:
- Napoleon Wallace’s model for racial wealth building
- TPG Rise Fund’s edtech unicorn
- Microfinance for fragile countries
- Institutional investors drive growth in impact investing
Featured: The Reconstruction
From North Carolina, a playbook for the Reconstruction of Black wealth. Two years. That’s what Napoleon Wallace wanted in order to leave his position as North Carolina’s deputy secretary of commerce and build a network of businesses and social enterprises that together, he thought, represented a path to racial equity through wealth creation for Black families and communities. “He came to me and he asked, ‘Could I have just two years? To do everything I can and put everything I have into getting these businesses started. Can you give me that?’” his wife, Edna Wallace, recounts in a new documentary, Equity and Ownership: Napoleon Wallace and the Reconstruction of Black Wealth, which premieres at SOCAP24 in San Francisco later this month. “So that was our agreement. And it was successful and it was working. And then he got ALS.”
- Narrative voice. Wallace was 38 years old when he was diagnosed in 2019 with amyotrophic lateral sclerosis, a degenerative nerve disease that affects nerve cells in the brain and spinal cord. Five years later, he cannot speak and can hardly move. A tube in his trachea provides oxygen. He communicates with an “eye pad,” controlling a cursor with his eyes as he points to letters and words. He can also use apps, open websites, exchange texts and write emails, and has become a speed typist – with his eyes. Wallace narrates the documentary, produced by ImpactAlpha with support from the Robert Wood Johnson Foundation, through an AI-generated voice clone. Filmmakers Yuri Vaysgant and Tyler Schwartz trained the AI on podcasts and videos that had captured his booming, pre-diagnosis voice.
- Reparative capital. At the SOCAP premiere, Wallace’s partners Micah Gilmer of Activest and Talib Graves-Manns of Partners in Equity will elaborate on what could be called the North Carolina model for racial wealth building. Partners in Equity, which also includes Wilson Lester, is well over halfway to the planned $10 million initial close of its first fund to help Black business owners buy the commercial properties in which they operate. Activest has matured from a “fiscal justice” research outfit to a registered impact advisor that, through its affiliate Next World Partners, has a $50 million mandate from Kataly Foundation to chart an equitable bond strategy. Its first deployment was to a $58 million bond issued by North Carolina Agricultural and Technical State University, a historically black land grant university in Greensboro.
- Third Reconstruction. Wallace’s most provocative line in the film is his indictment of impact investing itself. “It’s clear that impact investing has fallen short of the promise to create substantive change in Black, Brown and modest wealth communities,” he says. Wallace has teamed up with Dorian Burton at the Southern Reconstruction Fund, to raise Fund ONE, for “ownership and new equity,” a fund of funds to invest in emerging impact fund managers with strategies to build Black health and wealth and create self-reinforcing gains in southern cities like Memphis, Birmingham, New Orleans and Charlotte. The new documentary connects today’s Reconstruction with the remarkable success story of Wilmington’s “fusion” politics of the 1890s, before a white supremacist coup in 1898 overthrew the city’s elected government and massacred Black citizens in the streets (listen to our podcast, “Lessons from the Wilmington coup”). “Today, I believe we face similarly troubling divisions,” Wallace told ImpactAlpha. “We will need a new kind of reconstruction—one that invests deeply in our communities and institutions to build a more united, healthy and prosperous future.”
- Keep reading, “From North Carolina, a playbook for the The Reconstruction of Black wealth,” by David Bank on ImpactAlpha. The SOCAP premiere of “Equity and Ownership” is set for Tuesday, Oct. 29. Register for SOCAP24 using the code “s24_ImpactAlpha” to save $250 on your ticket.
Dealflow: Educational Access
TPG Rise Fund leads $150 million investment in Eruditus to expand access to executive education programs. Executive education programs at top universities have long been tapped by employers to groom their executive talent. The prestigious programs can be prohibitively expensive for many aspiring professionals around the world. Mumbai-based Eruditus launched in 2010 to make executive education and other professional development programs cheaper and more accessible for emerging leaders. The company partners with more than 80 universities in the US, Europe, Latin America, Southeast Asia, India and China to offer over 700 programs at a discounted rate via its Emeritus edtech platform. Course topics range from AI and machine learning to impact and sustainability (topics that lately are becoming inseparable). “Eruditus is expanding access to new education opportunities and giving professionals at all stages of their careers the skills they need to advance and succeed in today’s rapidly changing workplace,” said Simit Batra of TPG, which led Eruditus’ Series F round via TPG Rise Fund.
- Edtech unicorn. More than a million professionals in over 80 countries use Eruditus to access the online and in-person programs. Ereditus says nine of 10 professionals who have completed the programs reported a positive impact on their carers. The company will use the injection of capital to fuel growth and invest in AI to enrich the learning experience; it recently introduced AI-powered tutors for students. The round, which values Eruditus at $3 billion, was also backed by existing investors the Chan Zuckerberg Initiative, SoftBank Vision Fund 2, Leeds Illuminate, Accel and CPP Investments.
- Check it out.
Streetwear brand Section 35 lands funding from Raven Indigenous Capital Partners. Section 35’s hoodies, t-shirts and sweats blend Indigenous themes with a streetwear vibe. Founded in 2016 by Justin Jacob Louis, the brand opened its first storefront in Chilliwack, British Columbia last year after selling mostly online and through outlets like Foot Locker. Louis, a member of the Samson Cree Nation, named the brand after a section of the Canadian Constitution Act of 1982 protecting the rights of its Indigenous peoples. The Chilliwack-based company has secured an undisclosed amount of funding from Raven Indigenous Capital Partners, an Indigenous-led and -focused investment firm. “Section 35 represents the future of Indigenous entrepreneurship – innovative, culture-driven, and impactful,” said Raven’s Sean McCormick. “Our investment reflects our belief in Section 35’s ability to reshape perceptions of Indigenous fashion while creating real opportunities for Indigenous artists, creators, and communities.”
- Native fashion. Indigenous fashion designers have been gaining prominence. At New York Fashion Week in September, Edgar Villanueva of Decolonizing Wealth Project hosted his fourth annual event celebrating Indigenous designers such as Kayla Lookinghorse-Smith and Korina Emmerich. Naiomi Glasses, a seventh generation Navajo textile artist, has designed three collections for Ralph Lauren. “I see this as a narrative change opportunity, but also a wealth building opportunity for Natives in this industry and also issues that we care about, like climate sustainability,” Villanueva told ImpactAlpha.
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Microfinance for Senegal and other fragile economies sees capital infusion. Small loans are a lifeline for entrepreneurs, especially in Muslim countries that abide by Islamic financing principles, which eschew interest charges in favor of profit and loss sharing and frown upon excessive risk. Taysir Finance SA,a two-year old Islamic microfinance institution in Senegal that is the predominantly Muslim nation’s first such institution, secured five billion CFA francs ($8.2 million) to lend to local small and midsize enterprises. Sovereign Fund for Strategic Investments, known as Fonsis, a Senegal state-owned strategic investment firm, made the loan to Taysir via its $33 million Islamic Recovery Fund, created to help small businesses after the COVID pandemic. The loan evinces the Senegalese sovereign fund’s “commitment to co-developing innovative financing solutions tailored to the private sector’s needs in collaboration with banks and decentralized financial systems,” said Babacar Gning of Fonsis. Separately, French development financial institution Proparco lent €2 million ($2.1 million) to Microfinance Solidaire, or MFS, an initiative of French NGO Entrepreneurs du Monde that provides financial support to social enterprises and microfinance institutions across sub-Saharan Africa, Southeast Asia and Haiti.
- Catalytic finance. MFS’s new credit line from Proparco marks its third from the French DFI since 2021. MFS will use much of the loan to support women, who make up 88% of its funding recipients, and agricultural ventures, which account for 37% of its loans. Proparco’s Emmanuelle Riedel-Drouin said that MFS “undeniably contributes to reducing inequalities, by supporting microfinance institutions and social enterprises providing access to energy, and by supporting the financing of the agricultural sector, against a backdrop of weakening food security in Africa.”
- Read more.
Dealflow overflow. Investment news crossing our desks:
- Stockholm-based CorPower Ocean landed €32 million ($35.2 million) in a Series B1 round to commercially roll out its flagship product, which captures wave energy and converts it into electricity. (Renewable Energy Magazine)
- Kenya’s Octavia Carbon raised $5 million in a seed round co-led by Lateral Frontiers and E4E Africa for commercial deployment of its carbon removal technology. It expects to capture 1,500 tons of carbon from the air annually and store it underground beginning in 2025. (Techcrunch)
- 500 Global led a $1.3 million investment in Cairo-based Rabbit Mobility to expand the use of electric scooters and bikes in Egypt and enter other North African countries. (Empower Africa)
- King Energy, a Colorado startup that installs solar panels on multi-tenant commercial buildings across North America, raised $10 million from Canada’s Active Impact Investments and other investors. (King Energy)
Signals: Institutional Impact
As the GIIN turns 15, Amit Bouri reflects on ‘the inevitability of impact investing.’ The first trillion is the hardest.In the 15 years since the launch of the Global Impact Investing Network, more than a trillion dollars has been mobilized in the pursuit of financial returns and positive outcomes for communities and the planet. To transition the whole financial system to positive impact means adding another $100 trillion or so. Ambitious? Sure. But some of the world’s biggest asset managers, including insurance giants Zurich and MassMutual and pension fund manager PGGM in the Netherlands, are signaling that they’re no longer thinking of impact investing as just a “carve-out” of their portfolios. “We’re seeing institutional investors starting to think about how they can set a portfolio-level impact goal, and how that cascades into decisions they make across all of their investments,” says the GIIN’s Amit Bouri.
- Bigger tent. As Bouri prepared to kick off the GIIN’s annual investor forum in Amsterdam this week,he spoke with ImpactAlpha’s David Bank about the dual task of convincing more investors to come under the impact umbrella, while ensuring that they all adhere to recognized and meaningful standards as their work grows. “Impact investing is inevitable in terms of its maturation and momentum,” says Bouri. “Part of what we’re doing is helping to shift people’s thinking.”
- Read the full interview.
Agents of Impact: Follow the Talent
The Local Initiatives Support Corp., part of Greenhouse Gas Reduction Fund recipient Power Forward Communities, names John Moon, formerly of Wells Fargo, as president of LISC Green, LLC, LISC’s implementing entity in the fund… Wilmington Trust appoints Sarah Friedman Hersh, previously with Vanguard, to head of sustainable investing.
Zoe Bulger, previously with Summa Equity, joins The California Endowment as impact manager… The Washington Center for Employee Ownership taps Patricia Kwan, previously with Grailed, as director… Vililage Capital promotes Sofía Cándano to global communications and branding director… Latimpacto is recruiting a global markets and partnerships director… IDB Invest seeks a climate and environment managing director.
AXA Investment Managers has an opening for an impact investment manager… Sonen Capital is looking for a business development director… Fordham University’s Gabeli School of Business will host its second annual Good Business Conference this Thursday, Oct. 24 in New York.
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