The Brief | April 18, 2024

The Brief: Participant Media’s impact on film investing

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Greetings Agents of Impact!

In today’s Brief:

  • Participant Media’s impact on film investing
  • Derisking first-of-a-kind climate tech
  • Modernizing development finance at the World Bank

Shutdown of Participant Media challenges other investors to drive impact through film. When Ava DuVernay made her 2019 series “When They See Us” about the five Black teens convicted of a rape they didn’t commit, Participant Media helped her get it in front of tens of millions of Neflix viewers. Alongside the film, Participant collaborated with Color of Change on a directory of local prosecutors to highlight racist practices. Former prosecutor Linda Fairstein, who pressed the “Exonerated Five” case, resigned from two nonprofit boards. News broke this week that Participant is shutting down. The social impact production house backed by billionaire Jeff Skoll was known for social-action initiatives that accompanied films such as “The Help”, “Spotlight” and “An Inconvenient Truth,” one of the most successful documentaries in Hollywood history. “It is the right time for me to evaluate my next chapter and approach to tackling the pressing issues of our time,” Skoll said.

  • Impact storytellers. “I founded Participant with the mission of creating world-class content that inspires positive social change, prioritizing impact alongside commercial sustainability,” Skoll wrote in an email to Participant employees. Over two decades, Participant released 135 films and five series, earning more than $3.3 billion at the box office, but it reportedly struggled to consistently make money amid a shifting entertainment environment. Skoll said he was emboldened by the next generation of impact storytellers and content creators. “More and more individuals and organizations all over the world are recognizing and adopting impact models as core to their approaches.”
  • Impact investing in film. Mission-driven investors are leaning into the power of film and culture as an opportunity for delivering impact at scale. They are going beyond grants, to invest in film to drive social change. For her latest project, “Origin,” the adaptation of the book Caste by Isabel Wilkerson, DuVernay raised funds from Ford Foundation, along with Emerson Collective and the MacArthur and Robert Wood Johnson foundations. Ford’s Roy Swan will interview DuVernay on stage at the Mission Investors Exchange gathering in Los Angeles next month. “It’s very helpful to make something that’s unconventional more conventional,” Swan tells ImpactAlpha. The Kellogg and Libra foundations, along with Ford and Emerson, have invested in Charles King’s Macro. Scott Budnick’s One Community is backed by a Ford program-related investment. Participant’s closure “opens up a significant opportunity for others in the industry to draw inspiration from Participant’s work and innovative approaches,” says Kellogg Foundation’s Cynthia Muller.
  • Campaigns for change. In an interview earlier this month, Participant’s Delvon Worthy said film influences culture and culture enables change. “We believe that a good story well told can change the world,” Worthy, Participant’s director of partnerships, says. Worthy helped Participant organize campaigns alongside its films “in support of movements that are already happening.” A newly launched site documents some of the real-world impacts Participant’s films and campaigns helped achieve. Alongside “Roma,” the Academy award-winning 2018 film, Participant worked with nonprofits to bolster rights for domestic workers globally. The effort resulted in legislation in Mexico that guaranteed the rights of 2.4 million domestic workers to have written contracts with benefits. 
  • New narratives. Participant is one of a family of impact-focused organizations created by Skoll, the former president and first employee of eBay. Others include Skoll Foundation, which supports social entrepreneurs around the world, and Capricorn Investment Group, which manages the billionaire’s fortune. “While today funders and impact leaders speak often about the importance of shifting the narrative and allowing diverse voices to be heard, 20 years ago the transformative power of storytelling was not fully recognized as a lever for change,” Upstart CoLab’s Laura Callanan shares with ImpactAlpha. “Participant Media helped change that.”

Dealflow: Catalytic Capital

Prime Coalition launches Trellis Climate to finance first-of-a-kind climate tech deployments. Boston-based Prime Coalition has spent more than a decade marshaling risk-tolerant capital to bridge funding gaps for early stage climate tech through Prime Impact Fund and Azolla Ventures. With Trellis Climate, the nonprofit is expanding to later-stage climate tech ventures that are building their first commercial plants. These first-of-a-kind projects, or FOAKs, are notoriously hard to finance. FOAKs don’t fit the venture capital model, but are considered too risky for commercial lenders. “This first-of-a-kind funding gap is a big one, and now is the time to solve it,” Trellis Climate’s Lara Pierpoint told ImpactAlpha.

  • FOAK funk. The new direction for Prime grew out of a 2021 study that found a shortage of capital for commercializing and scaling novel climate solutions, (see, “Helping promising climate solutions cross ‘the second Valley of Death’”). FOAK projects attracted funding as climate tech surged. But catalytic capital remains critical to getting such projects off the ground, Pierpoint says. In January, Sweden’s H2 Green Steel raised more than $5 billion in equity and debt for its first green steel plant. A $270 million grant from the EU’s Innovation Fund de-risked the project for commercial investors. In Trellis’s sweet spot are climate tech projects in the $10 million to $100 million range – far too small for most government funders.
  • Additionality. Trellis has made two investments: Ample Carbon repurposes retired coal plants for bioenergy, and Ebb Carbon is an ocean-based carbon removal company. In both cases, Trellis funded engineering plans to speed project development. “We saw high impact potential and, importantly, a case for additionality that we could uniquely support,” said Pierpoint. Trellis will focus more on project construction financing and explore insurance and other ways to de-risk projects. Areas of interest include industrial decarbonization, long-duration energy storage, and carbon dioxide removal. Most projects are in the US, but Pierpoint sees potential in emerging markets, where country risk is a persistent obstacle to financing.
  • More. 

Medulance scores $3 million for medical emergency response in India’s smaller cities. New Delhi-based Medulance deploys emergency management technology, a fleet of 7,500 fleet of GPS-enabled ambulances, and a network of trained paramedics to cut emergency response times to under 15 minutes. Indian healthtech investor Alkemi Growth Capital led the $3 million Series A investment, with participation from several entrepreneurs and investment bank Dexter Capital. Medulance plans to double its coverage to 1,000 cities by 2026, with a focus on India’s underserved areas. More. 

Dealflow overflow. Investment news crossing our desks:

  • Verod-Kepple Africa Ventures, an early-stage VC firm investing in African tech startups, closed its first fund at $60 million with backing mostly from Japanese investors. (Verod-Kepple)
  • Dublin-based GridBeyond raised €52 million ($55.5 million) from Alantra’s Energy Transition Fund, Klima, Energy Impact Partners, Mirova and others to connect “latent power sources,” like batteries, to smooth energy grid demand and efficiency. (EU-Startups)
  • Rubio Impact Ventures backed HealthStage, a Dutch startup that uses AI to manage patients’ data and streamline health provider services. (Rubio Impact Ventures)
  • Bangalore-based Varthana Finance, a non-banking finance company that provides loans to affordable private schools, raised $10 million from BlueOrchard Finance. (YourStory)

Signals: Development Finance

Spring Meetings yield green shoots of development finance reform at the World Bank.  It’s been less than a year since Ajay Banga took over as president of the World Bank; he immediately faced intense pressure to modernize the bank’s policies and operations to facilitate more and fairer capital flows for emerging economies’ intensifying development and climate needs. At the annual Spring meetings of the World Bank and International Monetary Fund in Washington, DC, this week, even bank critics saw signs of progress on financial system reforms, sovereign debt distress and development finance impact transparency. “This agenda at the World Bank is starting to bear some real fruit and reforms,” observed Alexia Latortue, the US Treasury’s assistant secretary for international trade and development. Among the developments: an update to the bank’s mission statement to include “ending extreme poverty and boosting prosperity on a livable planet.” An agreement to offer debt repayment suspensions to the most vulnerable countries in the event of a natural disaster. And an overhaul of the bank’s guarantee business with the goal of tripling guarantees to unlock private investment in emerging economies by 2030.

  • Suspending payments. The wealth gap between the poorest countries and wealthiest is widening. The annual funding gap to meet the 2030 Sustainable Development Goals has grown to $4.2 trillion. Low and climate-vulnerable countries are paying out more in interest on their debt than development finance institutions are sending in. Relatively straightforward policy changes can have an enormous impact, Mick Sheldrick of Global Citizen tells ImpactAlpha. The advocacy nonprofit’s new report, “Where is the money?” offers a half-dozen ways to scale financing for climate and development. In Barbados, debt repayment suspension in the event of a natural disaster could unlock $700 million, or 15% of the Caribbean nation’s economy, Sheldrick says. “That’s far greater than any amount of humanitarian aid or loan that [Barbados] might get from the World Bank.”
  • Debt-climate conundrum. The “Vulnerable 20” group of what are now 68 countries dialed up its demands for “a fairer global system with global financial safety nets that work for the most climate-vulnerable countries.” V20 countries are getting battered by high sovereign debt loads, which makes it harder for them to borrow for resilience efforts, ImpactAlpha’s Andrea Riquier reports. A paper from the Intercontinental Exchange Inc. introduces Physical Risk Scores, which model the link between climate risk and sovereign default. “Our goal is to inform market participants and stakeholders about the implications of climate risk for international debt markets, with a particular focus on the challenges facing the world’s most climate-vulnerable countries,” the authors write. Go deeper.
  • Keep reading, “Spring meetings yield green shoots of development finance reform at the World Bank,” by Jessica Pothering on ImpactAlpha.  

Agents of Impact: Follow the Talent

Former Shell CEO Ben van Beurden joins KKR as a climate senior advisor… Novata appoints Joel Raha, former VP of engineering at Alloy, as chief technology officer, and Jeanne Lee, previously with Coursera, as head of sales in the Asia Pacific region… Christina Shih, previously with the News Revenue Hub, joins Press Forward as associate director… American Family Insurance promotes Nyra Jordan to vice president of community and social impact associate.

Patricia Zerega, who recently retired from Mercy Investment Services, wins the Interfaith Center on Corporate Responsibility’s 2024 Legacy Award… GitLab is hiring a remote volunteerism and social impact manager… Spearmint Energy has an opening for a project finance associate in Miami… MIT Solve is on the hunt for a climate officer in the Boston area… BIP is looking for a sustainability and circular economy officer in Rome… Twip Impact Ventures is recruiting an impact analyst in Germany. 

The World Green Building Council seeks a policy research and engagement manager and candidates for other roles… Bezos Earth Fund is accepting proposals from practitioners, researchers, NGOs and private companies for its $100 million Climate and Nature Grand Challenge… Publish What You Fund is seeking comments on its proposal for how development finance institutions can better measure and disclose private capital mobilization. 

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– April 18, 2024