The Brief | June 9, 2020

The Brief: Nigeria’s healthcare opportunity, Ghana’s smallholder farmers, e-bikes in Latin America, ESG quants

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Greetings, Agents of Impact!

Agents of Impact Call No. 18: Managing for impact in the time of COVID. Case studies in the International Finance Corp.’s new report, “Growing Impact,” show how impact investors are monitoring their impact. On ImpactAlpha’s Agents of Impact Call No. 18, David Bank and the IFC’s Neil Gregory will talk with Symbiotic’s Safeya Zeitoun, Finance in Motion’s Lloyd Stevens, DEG’s Julian Frede, Blue like an Orange’s Bertrand Badré and other Agents of Impact about how they are responding to the COVID crisis. Join The Call, Thursday, June 11 at 10am PT / 1pm ET / 6pm London. RSVP today.

Featured: Impact Voices

COVID recovery offers opportunities to invest in Nigeria across the healthcare value chain. The health sector in Nigeria was in a crisis before COVID-19. The pandemic is revealing years of neglect and waste in Africa’s largest economy. “As part of the recovery, innovative approaches to decision-making, investments and solutions are needed to ensure that Nigerians have access to quality and affordable care, while helping to build a robust healthcare system,” writes Sterling Bank’s Ayotunde Aladejana in a guest post on ImpactAlpha. A local lens, he says, can help parse opportunities in primary, secondary and tertiary healthcare, as well as pharmaceuticals and health tech.

A flurry of investments and projects since the COVID crisis began demonstrate the opportunity. Last month, Nigerian telemedicine startup Helium Health raised $10 million to help healthcare professionals meet growing demand. Genomics research firm 54gene raised $15 million to ensure genetic data used to develop therapeutics includes people with African ancestry. More directly, medical supplies delivery company LifeBank partnered with the Nigerian Institute of Medical Research to launch drive-thru COVID testing sites. And the state of Lagos commissioned a 118-bed facility at Gbagada General Hospital to help manage COVID cases. “Our mission in the health sector has not changed since the COVID-19 pandemic,” Aladejana says. “The only difference is the renewed drive to get all stakeholders involved at a critical time like this.”

Keep reading, “COVID recovery offers opportunities to invest in Nigeria across the healthcare value chain,” by Ayotunde Aladejana on ImpactAlpha.

Dealflow: Follow the Money

Dragon Farming secures loan to expand smallholder reach in Ghana. Ghana-based Dragon Farming produces sustainable soy-based feed for poultry and aquaculture farms. An €800,000 loan from Agri-Business Capital Fund will enable Dragon to procure soy beans from 14,000 regional smallholder farmers and grow its production by as much as 40% this year. Agri-Business Capital Fund, a blended-capital fund managed by Bamboo Capital and Injaro Investments, originated the loan to help the company weather COVID disruptions.

  • Supporting livelihoods. Without access to funding, the pandemic, “will make it hard, if not impossible, for these agribusinesses and cooperatives to thrive,” warned Injaro’s Jerry Parkes. “In times like these, it is imperative that we provide the needed funding to support these livelihoods through sustaining the operations of agribusinesses across the continent.”
  • Dig in.

Tembici raises $47 million to expand e-bike sharing in Latin America. Brazil’s Tembici is riding the trend toward green, sustainable mobility in fast-growing emerging market cities. The company raised its Series B round from Valor Capital, Redpoint eventures, Joá Investimentos and the International Finance Corp. to expand its shared electric bike services to new cities. “Sustainable means of transportation will play an important role in the next-normal across the globe,” said Valor’s Scott SobelHop on.

Tajir raises $1.8 million to help mom and pop shops source and manage inventory. Startups from India to South Africa to Mexico are building out digital and logistics services to serve small but essential neighborhood shops. Tajir’s platform is helping Pakistan’s small retailers go digital. The company, which serves 15,000 stores, raised the funding from Pioneer Fund, Golden Gate Ventures, Fatima Gobi Ventures, Karavan and VentureSouqTechCrunch reports.

Blue Finance and Ocean Outcomes receive funding to structure blended-finance solutions. The firms will use the design-stage grants from Convergence’s Asia Natural Capital Window to develop new financing models for the sustainable management of marine areas and fishing practices.

Signals: Ahead of the Curve

Can quant strategies improve ESG performance? You could almost hear the collective sigh of relief when environmental, social and governance funds outperformed the broader market during the COVID downturn. In the first real test for ESG funds in a major market slump, responsible investment funds suffered massive losses – just slightly less massive than the broader market. (See, Focus on workers, customers and governance drive ESG outperformance amid COVID uncertainty). From 2010 to 2019, ESG equity funds have slightly underperformed the market. “Our view is that ESG can and should do better,” says Welton Investment Partners’ Basil Williams. While ESG can help avoid “idiosyncratic,” company-specific risk, he says, long-only ESG funds are subject to broader market trends. Welton’s ESG Advantage, launching this week, combines quantitative models with ESG screens to protect responsible investors from market upheavals. “The COVID crisis has refocused people on the fact that there is investment risk, and it’s often highly unpredictable,” Williams told ImpactAlpha.

  • Market signals. Welton’s algorithms track macro indicators including interest rates, commodity prices, global currencies and price-earnings ratios that can flag turbulence. When its models detected falling interest rates and sinking prices for crude oil in January, the firm took short positions starting in February. Welton’s quantitative investment approach gained 12.5% in the first quarter, according to eVestment, while the S&P 500 plummeted nearly 20%. The Knights of Columbus, a faith-based investor, is the seed investor in ESG Advantage.
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Agents of Impact: Follow the Talent

Monique Aiken and Anjali Deshmukh of Mission Investors Exchange are hosting a Twitter chat to help the impact investing community mobilize around racial justice. Use #RacialEquityImpInv on Friday, June 12, from 2-4pm ET… Boston-based entrepreneur Kristina Liburd launches the Black Startup Collective, which is compiling a directory of Black-owned ventures to support their exposure and access to capital and resources… Arabella Advisors is hiring a senior director of strategy and strategic implementation services… HIP Investor is hosting “Solutions for racial justice + equity” today at 5pm ET.

Thank you for reading.

–June 9, 2020