The Brief | April 1, 2020

The Brief: Online education breakout, MedGenome’s South Asian DNA, LISC’s COVID relief, Marshall Plan for emerging markets, topping up Main Street funds

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Greetings, Agents of Impacts!

The Call: Small business stabilization and liquidity. Join the Collaborative for Frontier Finance and Accion Venture Lab’s Tahira Dosani, GroFin’s Brienne van der Walt, Inyosi Empowerment’s Evan Jones, Courageous Capital’s Laurie Spengler and others to explore COVID recovery financing for small and growing businesses in emerging markets, on ImpactAlpha’s Agents of Impact Call No. 14, tomorrow, Thursday, April 2 at 11am PT / 2pm ET / 7pm London / 9pm Nairobi (note time change). RSVP today.

Featured: Impact Voices

Investments in edtech platforms are powering online learning in the age of COVID. Online education grew steadily through 2015, when it topped out at about a third of the U.S. student population. Now the COVID-19 pandemic has scrambled the plans of more than 14 million students at thousands of U.S. higher education institutions. For at least the rest of the semester, online learning is the only option. “We may see half, or even more, of U.S. students enrolling in online courses much sooner than anticipated,” writes Achieve Partners’ Daniel Pianko in a guest post on ImpactAlpha. The coronavirus could be “more of a catalyst for online education and other ed-tech tools than decades of punditry and self-serving corporate exhortations,” Goldie Blumenstyk wrote in The Chronicle of Higher Education.

The pandemic has accelerated disruptions from healthcare to fintech to alternative meat and the low-carbon economy. For slow-moving higher education, the unprecedented change is taking place at an unprecedented pace. Key to the transition: often-unsung platforms that are helping schools respond quickly and effectively, says Pianko, who manages a portfolio of online learning and human-capital investments (including some mentioned here). That includes proctoring tools like Examity, online discussion tools like Packback, and communication tools like AdmitHub’s COVID-19 chatbot. Edtech companies are mounting a rapid response to the COVID-19 outbreak. Credly’s digital badges are helping individuals showcase their skills. Tutoring startups like Study Edge and Write Lab are increasingly critical with in-person writing centers closed. PeopleGrove and Riipen are helping students and alumni connect with job opportunities and build their professional networks in the absence of in-person job fairs. The corona crisis will “be remembered as a watershed moment for the potential of online higher education,” Pianko writes, “thanks in large part to the work of technology providers working to keep the engines of learning running smoothly.”

Keep reading, “Investments in edtech platforms are powering online learning in the age of COVID,” by Achieve Partners’ David Pianko on ImpactAlpha.

Dealflow: Follow the Money

LeapFrog leads $55 million investment in MedGenome to expand genetic testing. The Indian subcontinent makes up about 20% of the world’s population but only 0.2% of the DNA sequences in global genetic databases. Bangalore-based MedGenome is expanding early disease risk detection, inherited disease prevention, and health care personalization to India’s smaller cities and other emerging markets, “where the burden of many inherited and complex diseases is even higher than in western markets,” says MedGenome’s Sam Santhosh. LeapFrog’s Felix Olale added, “Genomic sequencing will anchor the future of medicine, and we must include other underrepresented genomes not only because it drives access, but also because it improves the accuracy for everyone.” LeapFrog last year closed a $700 million fund for healthcare and financial services. Existing investors Sofina and Sequoia also participated in MedGenome’s round. More.

Qarnot raises $6.5 million to use data servers to heat buildings. Data centers consume a lot of energy and throw off a lot of heat. French startup Qarnot makes data servers that repurpose that heat for buildings. The heater-server devices are used in 1,000 social housing units; residents control them like a normal thermostat, TechCrunch reports. The company’s funding round was backed by Banque des Territoires, Caisse des Dépôts, Engie Rassembleur d’Énergies, A/O PropTech and Groupe Casino.

Gilde Healthcare raises €416 million to back affordable healthcare companies. Gilde, based in Cambridge, Mass. and Utrecht, Netherlands, invests in healthcare companies offering affordable “patient-centric” and “value-based” care in the U.S. and Europe. Backers of its fifth fund include Royal Philips, KfW Capital, the Belgian and Danish Growth Funds and the European Investment Fund.

With a temporary pivot, Via ride-sharing platform raises $200 million. The Uber- and Lyft-alternative offers shared rides and partners with city transit agencies, school districts and other transport providers in 70 cities. Amid COVID, it is transporting essential workers, goods and medical supplies. Its Series E funding round was led by EXOR.

LISC is raising a $100 million fund for COVID relief. The LISC COVID-19 Relief and Resiliency Fund will help LISC’s partners “on the front lines of this crisis” disburse fast loans and relief funds to small businesses in the communities they serve and shore up their own operations with grants, working capital, and technology needed for remote work. Verizon and U.S. Bank are early backers of the fund.

Signals: Ahead of the Curve

Scaling up economic responses to COVID-19 disruptions. It’s hard to think big enough or fast enough in response to the economic fallout of the coronavirus pandemic. A growing chorus of voices are calling for government relief efforts that are both bigger and more local.

  • Marshall Plan for emerging markets. Development finance institutions are scraping together billions in relief packages for healthcare and small businesses. The U.N. is calling for a $2.5 trillion package to backstop emerging market economies. The package would include a $1 trillion liquidity injection from the International Monetary Fund, massive debt relief, and a $500 billion “Marshall Plan” for health recovery. Developed countries could cover the cost by meeting their foreign-aid target of 0.7% of national income, says the U.N. conference on trade and development. Even before COVID-19 arrives in full, developing economies are facing capital flight, rising interest rates, currency devaluation, and lost export earnings.
  • Top up Main Street funds. The New Localism co-author Bruce Katz, along with Drexel’s Nowak Metro Finance Lab and Accelerator for America are calling on the federal government to appropriate $25 billion to dozens of local emergency funds that have popped up to support small businesses in cities and states across the country. That amount is roughly 50 times the current size of the funds (about $500 million) and should be in addition to the $800 billion in Small Business Association and Federal Reserve efforts to reach businesses directly, say proponents. One advantage of the local funds is their ability to reach micro-businesses owned by people of color that operate outside the mainstream banking system. The city and state funds were envisioned as a stop-gap until the larger federal relief packages arrived. “Rather than giving way to federal relief, local efforts will need to persist and grow substantially as the crisis unfolds.”
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Agents of Impact: Follow the Talent

Paul Munday joins S&P Global Ratings’ Sustainable Finance team in London… Rodney Sampson, founder of Atlanta’s Opportunity Hub, joins Draper Goren Holm as venture partner… The Aspen Network of Development Entrepreneurs seeks an executive director in Washington, D.C.

Thank you for reading.

–Apr. 1, 2020