Greetings, Agents of Impact!
Featured: Overhead at SOCAP23
Gender lens investors look beyond ‘the business case’ to move capital to women. Don’t ask for permission, ask for forgiveness. That adage captured the mood shift among gender-lens investors at this week’s SOCAP23 in San Francisco. Investors from the US and Colombia to Ghana and Singapore are done with being asked to provide proof that investments in women outperform or are “just better business.” That case has been made, they argue. What they’re doing instead: Disrupting boys clubs that give men access to deals. Building the financial acumen of women. And getting on with the business of pooling and investing capital… in women.
- Power and proximity. “We have built so much evidence that we don’t need anybody to ask more questions about the performance of women,” said Hamdiya Ismaila of Accra-based Savannah Impact Advisory. Last month, Savannah was named the fund manager of a $75 million fund of funds to unlock local pension fund capital for West African ventures and small businesses. “We have to change the fundamental system in which we’re operating at this level,” added Jacki Zehner, who founded Utah-based SheMoney to advance women’s financial wellness and agency. “It’s micro and macro. It’s power and proximity.” Patricia Saenz of Bogatá-based EWA Capital says she has passed the midway point of raising her second gender-lens, early stage venture fund for Colombian entrepreneurs.
- Orange bonds. IIX has mobilized more than $128 million in a series of five “orange bonds” for investments in gender equality and underserved communities around the world – with no losses to date. “That says something,” said IIX’s Durreen Shahnaz in Monday’s opening plenary. “You are reducing financial risk, and you need women to be front and center.” The impact investing firm is readying its next bond at $100 million, the largest. Shahnaz dubs the instruments “orange” for the color of Sustainable Development Goal No. 5, which promotes gender equality.
- Climate + gender. Women are disproportionately affected by climate change and pollution. From plastics pollution to the blue economy, they are also key to solutions. A climate and gender focus is a critical piece of addressing inequities in Southeast Asia, one of the most vulnerable regions to climate change. “We are seeing great opportunities to invest across these issues,” says Priya Thachadi of Villgro Philippines, which runs a gender-smart incubator. In waste collection and recycling, a largely informal economy, women toil in low-paying jobs. “How do we bring more capital and enable women entrepreneurs in the region to leapfrog?” asks Regula Schegg of Singapore-based Circulate Capital. Thachadi and Schegg, along with Ayaka Matsuno of Sasakawa Peace Foundation, will join ImpactAlpha’s Amy Cortese at 4:30pm PT today to discuss opportunities to invest in women and climate in Asia.
- Measure better. Impact measurement and management in gender-lens investing is moving beyond standard metrics collection to capture beneficiary voices, real world outcomes, and other meaningful data to improve the impact and financial performance of investments. Pro Mujer’s Carmen Correa, Ellie Turner of 60 Decibels, and Marlene Molero Suarez of Elsa join ImpactAlpha’s Dennis Price for “Measuring beyond standard metrics: Evaluating impact in gender lens investing,” also today at 4:30pm PT.
- Keep reading, “Overheard at SOCAP23: Gender lens investors look beyond the ‘business case’ to move capital to women,” by Dennis Price and Amy Cortese on ImpactAlpha.
Dealflow: Returns on Inclusion
UnitedHealth Group backs Enable Ventures to invest in disability solutions. New funds are emerging to invest in positive impact for the global disabled population, which often face ableism, discrimination, poverty and exclusion. UnitedHealth Group, the largest health insurer in the US by revenue, will allocate $5 million from its balance sheet to Enable Ventures. Enable, a market-rate impact venture fund, was launched last year by Sorenson Impact’s Jim Sorenson and former disability rights lawyer Regina Kline to close the disability wealth gap (see, “Regina Kline: Agent of Impact”). Just one in five disabled individuals is employed. Enable invests in disabled entrepreneurs as well as in technology to assist people with disabilities at work. “Employment directly equates to improved health outcomes,” UnitedHealth’s Catherine Anderson told ImpactAlpha.
- Investing in health. UnitedHealth is looking to advance health equity by addressing the social determinants of health, including the quality and availability of affordable housing, food systems and other social services. In May, the insurer invested $25 million in Healthy Neighborhoods Equity Fund’s $42 million round to finance inclusive housing in Massachusetts, Connecticut and Rhode Island. UnitedHealth has also backed Invest Appalachia, which promotes economic inclusion, health equity and climate resilience in the Central Appalachia region of the US.
- Growing ecosystem. “Unlike other minority groups, disability is the only one that many of us can become a part of at any point in time,” said Diego Mariscal, a Mexican-American paralympic athlete who is raising a fund to prove that having a disability can offer a competitive business advantage. Mariscal’s 2Gether-International, a Washington, DC-based impact accelerator, supports a pipeline of nearly 600 disabled founders. Christopher McKelvy, a grandson of Patricia Kennedy Lawford, is raising a $35 million fund to invest in startups that provide services for disabled Americans.
- Dive deeper.
Spearmint Energy secures $92 million in tax equity financing for Texas battery storage. The injection of capital will support Spearmint’s Revolution, a 300 megawatt-hour battery storage project in West Texas scheduled to begin operations this year. Greenprint Capital Management, a New York-based firm that specializes in renewable energy tax credit investments, made the investment. The Revolution project will be one of the largest batteries in the US and could bolster Texas’ electric grid against extreme weather conditions (see, “Building a smart and resilient grid moves up the to-do list after Texas power failures”). In June this year, Spearmint raked in $200 million in debt from Aiga Capital Partners to finance its larger portfolio that includes Revolution and three other battery energy storage developments.
- Tax equity pipeline. The deal marks one of the first applications of the Inflation Reduction Act’s Investment Tax Credit, or ITC structure, for standalone battery storage. Earlier this month, Greenprint formed a joint venture with funds managed by AllianceBernstein’s AB CarVal to deploy more than $2.5 billion in tax equity capital to clean energy and storage project developers and sponsors over the next two years. Nonprofits and other tax-free entities can also make use of the tax incentives by selling their credits (see, “How the IRA’s ‘direct pay’ provision is driving community ownership and resilience”).
Dealflow overflow. Other investment news crossing our desks:
- Swedish electric truck maker Volta Trucks filed for bankruptcy last week, citing supply chain failures, which made it difficult for the company to raise capital. The company had raised over $300 million and had an order book of more than 5,000 vehicles. (Reuters)
- Germany’s FarmInsect snagged €8 million ($8.5 million) in a round co-led by the Minderoo Foundation’s Strategic Impact Fund and other European investors to make sustainable livestock feed. (Tech.eu)
- JKCC General Supplies, a Ugandan trading company sourcing coffee beans from local smallholder farmers, scored €800,000 ($852,000) from ABC Fund. (ABC Fund)
Impact Voices: Catalytic Capital
Embracing the spectrum: Investors of catalytic capital seek outperformance – on impact. On the spectrum from “market rate” to “catalytic,” many impact investment funds fall in the middle. A new study from the Impact Finance Research Consortium, a collaboration of the Wharton School, Harvard Business School, and the University of Chicago Booth School of Business, found that of 200 impact investing fund managers around the world, 41% invest both catalytic and market-rate capital. The finding could have implications for catalytic investors struggling to build blended-finance capital stacks, writes Wharton’s Maoz Brown in a guest post on ImpactAlpha.
- Connections and coordination. For catalytic investors to create lasting impact they must partner with the broader capital markets. “In practice, however, we find that catalytic investors often struggle to attract and collaborate with co-investors,” says Brown. Impact funds that deploy investments across the returns spectrum could be the key to bridging the gap. “Building out and spotlighting such mission-aligned investment networks should be a critical priority for our field if we hope to realize the full potential of catalytic capital,” writes Brown.
- Keep reading, “Embracing the Spectrum: Investors of catalytic capital seek outperformance – on impact,” by Maoz (Michael) Brown on ImpactAlpha.
Agents of Impact: Follow the Talent
Chelsea McDaniel, ex- of Activest, joins Common Future as director of impact investments… Pacific Community Ventures seeks a director of development… Social Venture Partners Dallas is hosting a lunchtime discussion on workplace equity and employee ownership, Wednesday, Oct. 25 in Dallas… New Private Markets’ Impact Investor Summit North America takes place Oct. 31-Nov. 1 in New York… The European Venture Philanthropy Association is hosting its Impact Week in Torino, Italy, Nov. 22-24.
Thank you for your impact!
– Oct. 24, 2023