The Brief: Rodney Foxworth on reparative investing (podcast), SunFunder’s solar transformation, equity crowdfunding in Africa, celebrating international women

The team at

ImpactAlpha

Greetings, Agents of Impact! 

Featured: The Reconstruction

Rodney Foxworth on reparative investing for shared power in a common future (podcast). Foxworth, CEO of Oakland-based Common Future, gets personal in conversation with host Monique Aiken on The Reconstruction, the new podcast series from ImpactAlpha. Their conversation ranges from the need to confront power, the possibilities for reparative investing, and the role of empathy in a time of division. Reparative investing builds on concepts of restorative economics developed by Kataly Foundation’s Nwamaka Agbo and others. “For me, it always starts with who has the power? How can that power get disrupted?” Foxworth tells Aiken. “And how can more people, particularly those who have been most adversely impacted by these challenges, actually have power and assert that power for themselves?” Building new systems, Foxworth says, requires “a reckoning with how white supremacy and patriarchy… weakened democracy, weakened our political apparatus, weakened investments into infrastructure, weakened our ability to really take on climate issues.”

Foxworth has led Common Future, the 20-year-old network of local leaders formerly known as BALLE, since 2018. Through the pandemic, Common Future moved quickly to deploy about $5 million in capital through its network in more than 100 communities. Now, Common Future is stepping up its role as a capital intermediary with two funds. Its Character-Based Lending Fund will offer flexible loans averaging $30,000 apiece to BIPOC entrepreneurs in Minnesota, New Mexico and Ohio – without credit checks or collateral. A separate Community Investment Fund, seeded with $1 million from Common Future itself, will make investments “that serve as proof of concept and models for how reparative and non-extractive investments can be accomplished.” Aiken asks Foxworth what characteristics are key for constructing that “next normal.” Foxworth’s response: Deeper empathy. “And I don’t say this in a way to let off folks who have problematic ideas and who wield power in really problematic ways,” he explains. “However, I think without empathy, it’s impossible for us to move forward, particularly when you think about this multiracial coalition-building that I think is so important.”

Listen in to Rodney Foxworth’s conversation with Monique Aiken, “Reparative investing for shared power in a common future,” on The Reconstruction, a podcast series from ImpactAlpha. 

  • The series. The Reconstruction is chronicling the people and projects centering Blackness in the service of economic liberation for all. Catch up on all the podcast episodes on Spotify, Apple or Anchor.
  • On the beat. Scan The Reconstruction’s landing page for podcast summaries and original coverage, including dealflow, features and Agents of Impact.

Sponsored by BlueMark: Impact Due Diligence 

Why institutional investors are adding independent verification to their impact due diligence. As asset owners allocate more capital to impact funds, they are looking for reliable ways to identify best-in-class managers. “This is where impact verification comes in,” writes Christina Leijonhufvud of BlueMark, a Tideline company. “A statement from a third-party impact verifier can provide confidence that a fund’s representations of its impact practices are accurate, while also identifying potential areas of impact risk for future monitoring.” Nearly half of the 115 impact investors that have signed the Operating Principles for Impact Management have published the required verifier statements. Leijonhufvud expects impact verification to become the de facto best practice for impact fund managers seeking to raise capital, “especially as prudent asset allocators rely on insights from impact verifications to reduce impact risks and enhance impact results.” 

Dealflow: Follow the Money

SunFunder reaches $70 million close for Solar Energy Transformation fund. The off-grid solar finance company’s blended-finance fund backs solar companies improving energy access across Africa and Asia. It closed the fund with investments from OeEB, the development bank of Austria, Swedfund, Bank of America, Mercy Investment Services, the Schmidt Family Foundation and members from the Toniic impact investor network. 

  • Third fund. The nine-year debt fund aims to back 50 solar energy companies serving three million people. The fund’s investment focus includes distributed commercial and industrial solar projects, a growing segment of emerging markets’ off-grid energy sector (see, “CrossBoundary Energy’s fund exit is a proof point for Africa’s commercial solar market – and catalytic capital). SunFunder has facilitated $100 million in debt financing since 2012. It also invests from a $47 million Beyond the Grid Solar Fund and a $30 million managed account for the Kenya Ministry of Energy. 
  • Blended finance. The Solar Energy Transformation fund’s $42.5 million first close in 2019 included $25 million in debt from the U.S. International Development Finance Corp., or DFC, and a $5 million catalytic grant from IKEA Foundation. Calvert Impact Capital and Ceniarth also participated. 
  • Plug in

Microtraction backs African equity crowdfunding platform Raise. Equity crowdfunding platforms that have taken off in the U.S. and Europe allow everyday investors to support promising entrepreneurs. Raise wants to enable more Africans to back African startups the same way. Early-stage tech investor Microtraction backed the company with a $25,000 investment. 

  • Home-grown. Most African startups that have succeeded with crowdfunding campaigns have used U.S. and European platforms; most have secured debt, not equity. Raise is looking to serve entrepreneurs and investors across the continent. In South Africa, Up.Raise is an equity crowdfunding platform focused on South African investors and entrepreneurs; The People’s Fund, also in South Africa, offers purchase-order financing, a type of working capital. 
  • Early bets. Lagos-based Microtraction is an early-stage venture capital firm with a Y Combinator-like model: it invests $25,000 for a 7% stake in each of its portfolio companies. Among its investments: African biobank 54gene, which last year raised $15 million; wealth management app Cowrywise, which raised $3 million in January; and education finance venture AllPro, which later became a Y Combinator venture.  
  • Check it out

Dealflow overflow. Other investment news crossing our desks:

  • Education fintech venture FutureFuel.io secures $10 million in a UBS-led round to help student borrowers repay debt
  • Tunisia’s ATL raises $12 million from Sanad Fund to help the country’s pandemic-impacted small businesses cover real estate and equipment rental needs 
  • Venture capital firm LongJump launches to back Latinx and other under-represented founders in Chicago, amid a boom in new Chicago-based investment funds 

Signals: Ahead of the Curve

Celebrating women, internationally. The caregiving and economic burdens of the COVID pandemic have fallen heavily on women, who have lost jobs at nearly double the rate of men. Women have stepped up, organizing and mobilizing for political change, combating climate change, and investing in one another. Today, and every day, we salute the leadership and power of international women. Here are a few of the International Women’s Day activities we’re tuning into: 

  • UN Women is hosting “Women in leadership: Achieving an equal future in a COVID-19 world on the way to the Generation Equality Forum,” today at 10am ET. The forum, more than 25 years after the 1995 World Conference on Women in Beijing, starts in Mexico City, March 29–31, and ends in Paris in June and aims to secure “concrete, ambitious, and transformative commitments to achieve immediate and irreversible progress towards gender equality.”
  • The Madan Sara Project hosts an online screening of “Madan Sara,” a film centering Haitian women’s voices, today at 6pm ET. Watch the trailer here
  • The International Fund for Agricultural Development is hosting “Leading the change: women at the forefront to build a better future,” today at 8:30am ET.  
  • SheEO, the Toronto-based investing network, is holding its virtual summit today and tomorrow (see, “Women’s investment community SheEO commits $500,000 to five entrepreneurs).
  • Aavishkaar Group’s 2020 impact report explores how the Mumbai-based enterprise, with more than $1 billion in assets under management, has catalyzed entrepreneurship in the Global South and supported more than 55 million women (see, “Building businesses for the next three billion middle-class consumers”). SOCAP is presenting “Impact Conversations with Aavishkaar Group” today at 8am ET. 
  • High Water Women’s call to action kicks off with opening remarks by 1863 Ventures’ Melissa Bradley, Tuesday, Mar. 16 at 5pm ET. 
  • And a special shoutout to Zuleyma, Jessica, Amy, Monique, Lyneka, Beth and Imogen – the women of ImpactAlpha.

Agents of Impact: Follow the Talent

BlocPower’s Donnel Baird and Future Earth’s Stephanie Shepherd join the board of directors in Al Gore’s Climate Reality Project… Andy Moniz, ex- of Putnam Investments, joins Acadian Asset Management as director of responsible investing… Emerson Collective is recruiting a portfolio support analyst in Palo Alto, Calif… Cartica Management is recruiting an ESG engagement manager in the Washington-Baltimore area. 

Global Partnerships is looking for a research and impact officer in Nairobi… Lightship Capital is hiring a program manager in Tulsa Okla… LOCUS Impact Investing seeks a technical consultant… Tideline’s Ben Thornley hosts “Climate Investing with True Impact,” with Nuveen’s Allison Spector, Prime Impact Fund’s Amy Duffuor, Brookfield Asset Management’s Natalie Adomait and Rede Partners’ Jeremy Smith, tomorrow, March 9. 

Thank you for your impact.

– Mar. 8, 2021