Greetings, Agents of Impact!
You may be pleased to learn that our new artificial intelligence overlords are hip to impact investing. Take a look at how OpenAI’s new ChatGPT bot answered queries such as: “How do I measure the social impact of an investment?” “How can I make impact investments in my personal portfolio?” and “What’s the difference between ESG and impact investing?”Our favorite: “What’s the best website for impact investing news?”
“The best website for impact investing news is ImpactAlpha.com. The website provides in-depth coverage of impact investing topics, such as sustainable investing, ESG investing, and impact investing. It also features interviews with experts, news, and analysis of the latest trends in impact investing.” Love those bots! (Share.)
Featured: The Liist
The Liist: Seven impact funds that are raising capital now (December 2022). It’s been a difficult year for run-of-the-mill tech funds seeking fresh powder. Fundraising for impact funds has been more resilient, as managers lean into urgent challenges and emerging opportunities. From climate tech to gender-lens vehicles, many funds are surpassing their fundraising targets (for context, see “ImpactAlpha Deal Spotlight: Oversubscribed impact funds”). Some funds on this month’s Liist, compiled in partnership with Realize Impact, are nearing their fundraising targets; others are fresh out of the gate.
Better Ventures. The Oakland, Calif.-based venture firm helps mission-driven companies focused on sustainable food, workforce resilience and “electrification of everything” get over early fundraising hurdles.
- I2I Ventures. The women-led and women-focused VC fund backs early-stage tech startups in Pakistan. The firm was an early investor in Abhi, a fintech firm supporting gig workers that went on to raise $17 million in Series A financing this year.
- Deetken Impact. Costa Rica and Canada-based Deetken Impact invests in businesses delivering sustainable energy and improving livelihoods in Latin America and the Caribbean. It’s raising a third Sustainable Energy fund and a fourth Alternative Finance fund.
- New Way Homes. The Santa Cruz, Calif.-based nonprofit provides affordable loans for inclusive real estate development. It partners with nonprofits, including Black churches, that own properties and development sites but lack access to affordable financing.
- Acumen LatAm Impact Ventures. ALIVE, as the Colombia-based firm is known, launched in 2018 with backing from Acumen. The gender-focused fund invests in education, livelihoods and daily essentials in Latin America.
- Amazonia Impact Ventures. Amazonia makes sustainability-linked loans to enterprises that protect Amazon forestland and support livelihoods in Indigenous communities.
- Sangam Ventures. The early-stage venture firm invests in tech companies providing access to sustainable energy and resource productivity solutions for India’s underserved populations.
- For more details, keep reading, “The Liist: Seven impact funds that are raising capital now (December 2022),” by Jessica Pothering on ImpactAlpha. See 28 other funds that have been raising capital recently in earlier editions of The Liist.
Sponsored by BlueMark
Raising the bar for impact reporting. Impact verification firm BlueMark has been helping shape and define best practices for impact reporting. After 18 months of research and interviews with more than 50 impact investing experts, BlueMark is ready to share its framework for evaluating the completeness and reliability of impact reporting. Margot Brandenburg of Ford Foundation, Philipp Essl of Big Society Capital, Ka-Hay Law of TELUS Pollinator Fund for Good, Impact Engine’s Roger Liew, and Impact Frontiers’ Mike McCreless will join BlueMark’s Sarah Gelfand and Tristan Hackett in a discussion, “Raising the Bar 2.0: Introducing BlueMark’s Framework for Evaluating Impact Reporting,” Tuesday, Dec. 13. RSVP today.
Dealflow: Gender Smart
Mastercard Foundation’s $200 million Africa Growth Fund invests at the intersection of gender lens and good jobs. An African consortium led by Mennonite Economic Development Associates, or MEDA, will manage Mastercard Foundation’s new $200 million fund of funds, which is aiming to drive gender equity and good jobs in Africa. Others in the consortium include I&P, Entrepreneurial Solutions Partners, Genesis Analytics and the Criterion Institute. The fund will provide financing to small and mid-sized enterprises, primarily through women-led funds in Africa. A quarter of the fund is earmarked for technical assistance and administrative costs. Less than 10% of investment goes to women-led investment vehicles and women-led businesses. “We want to make sure that there are opportunities for women-led investment vehicles that can support women small and medium enterprises,” Africa Growth Fund’s Samuel Akyianu told ImpactAlpha.
- Gender smart. Nigeria’s Aruwa Capital, Africa Growth Fund’s first portfolio investment, raised more than $20 million this week for its first fund. Aruwa is among the gender-lens funds in Africa having fundraising success despite the challenging climate. In September, African Women Impact Fund secured $60 million from investors, and Janngo Capital raised €34 million ($35 million).
Investors warm up to wildfire prevention. Wildfires unleash as much as one-fifth of global carbon emissions each year and cause billions of dollars in insured losses, according to OroraTech, a satellite-based intelligence provider. The German startup has raised €15 million ($15.8 million) from Belgium-based climate impact fund Edaphon, the state of Bavaria, and the European Space Agency for its space-based thermal cameras that can detect wildfires worldwide. OroraTech has one camera operating and plans to launch 99 more to monitor surface temperatures.
- Remote management. San Francisco-based Earth Force snagged $8.6 million to prevent and contain fires with tele-operated machinery and remote sensors that manage vegetation in hard-to-reach areas. In 2020, California’s wildfires released almost twice as much carbon as the state cut from 2003 to 2019 through its emissions-reduction strategy.
- Read on.
Dealflow overflow. Other investment news crossing our desks:
- Idaho-based KORE Power clinched $75 million from investors including Siemens Financial Services to build a lithium-ion battery plant in Phoenix, Ariz.
- Black-led sustainable materials company Aja Labs raised $2.5 million from Impact America Fund, Better Ventures and SOSV’s IndieBio for its plant-based hair extensions.
- Como, Italy-based 3Bee secured €5 million ($5.3 million) to help beekeepers monitor the health of their hives.
- Octopus Energy acquired solar energy developer Zestec Renewable Energy to expand rooftop solar installations on U.K. business sites.
Signals: Overheard at Mission Investors Exchange
Foundation leaders take aim at their own investment committees. Foundation presidents may have the titles, but their investment committees hold the purse strings and often pose obstacles to aligning philanthropic endowments with philanthropic missions. “You just mentioned two words that are the elephant in the room: investment committee,” Ford Foundation’s Darren Walker said to Shanaysha Sauls of the Baltimore Community Foundation at the opening plenary of this week’s Mission Investors Exchange conference. Walker recounted the “legalese” invoked by investment committee members at both the Rockefeller and Ford foundations, “that they interpreted as not allowing some of the very practices that are needed to achieve real equity and real impact.” (For background see, “Darren Walker takes on opponents of impact investing – including his own trustees.”) ImpactAlpha’s David Bank and Jessica Pothering report from Baltimore:
- Term limits. California Wellness Foundation’s Judy Belk said she met with the head of her investment committee soon after she became CEO in 2014. “I noticed in your interview you talked about mission-related investing,” she said he told her. “I’m totally opposed to it.” She said she went to the chair of her board of trustees, who advised, “The most effective tool that you have in your toolkit is term limits.” From an initial $50 million carveout, Belk has moved 92% of the foundation’s $1 billion endowment toward mission alignment; more than 60% of its managers are diverse. An exception is the Baltimore Community Foundation’s investment committee chair Patricia Baum of RBC Wealth Management, who leads the foundation’s impact investing initiative. “Who is this prototype?” Walker asked, identifying Baum in the audience. “There are a whole lot of investment committee meetings where you need to be in the room.”
- Disrupting the status quo. Arkansas-based Winthrop Rockefeller Foundation has moved more than 60% of its $140 million endowment into mission-aligned investing. Grant-making wasn’t doing enough to upend systemic racial inequality, said Sherece West-Scantlebury, who heads the foundation. “We want to fund disruptors and those who want to kick over the table and do things differently.” West-Scantlebury spotlighted the foundation’s support for community development financial institutions and a Covid-relief loan fund for Black and Brown-owned businesses in Arkansas (see West-Scantlebury’s post, “Investors must make noise so BIPOC entrepreneurs don’t have to make do”). She said by now there is ample evidence and guidance for foundations to adopt mission-related investing. “If you’re not doing this right now—and doing it in earnest—it’s because you don’t want to, not because the data’s not there.”
- Racial equity targets. The urgency of addressing racial equity barriers was the topic of a 2014 report from the Annie E. Casey Foundation. “We thought we were doing that report for everyone else, and we realized we had to read it ourselves and accept that we have got work to do,” said Lisa Hamilton, president of the $3.4 billion foundation. “Universal strategies” were not advancing the well-being of kids of color, she said. Casey now targets racial equity across its operations, including investment decisions and selection of asset managers. “Today more than half of our social investment portfolio–about $50 million–has an explicit racial equity component,” Hamilton said. “Universal strategies don’t get you where you need to go. You’ve got to be intentional and targeted.”
- Keep reading, ”Foundation leaders take aim at their own investment committees,” by David Bank and Jessica Pothering.
- ICYMI. ImpactAlpha is the media partner for this week’s Mission Investors Exchange conference. Catch up on our series, including, “Real estate developers in Baltimore test strategies for inclusive growth and community wealth,” “How the MacArthur Foundation is leveraging the ‘full continuum’ of capital to address the climate crisis,” and, “How The California Endowment is investing for health and racial equity.”
Agents of Impact: Follow the Talent
The Earthshot Prize, launched by Prince William, announced its list of 2022 winners, which includes Kenya’s clean cookstoves manufacturer Mukuru Clean Stoves, India’s climate-smart agriculture startup Kheyti, and U.K.-based sustainable packaging startup NOTPLA. Winners will receive £1 million ($1.2 million) each.
The Environmental Defense Fund seeks a remote energy transition policy manager… The Utah Nonprofits Association is looking for a remote programming and advocacy manager… Wakefern Food Corp. is hiring a manager of corporate social responsibility in New Jersey… The Rockefeller Foundation is recruiting a regenerative agriculture manager in New York… World Food Program USA seeks a corporate partnerships manager in Washington, D.C.
Fran Seegull of the U.S. Impact Investing Alliance, Cambria Allen-Ratzlaff of JUST Capital and other field leaders will make the case for S.E.C. action on mandated, standardized human-capital management disclosures for corporations at the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets hearing, which will be held today at 2pm ET. Watch live.
Thank you for your impact.
– Dec. 6, 2022