Greetings Agents of Impact!
In today’s Brief:
- Climate tech entrepreneurship in India
- Impact exits through acquisitions and secondaries
- Disruptive ‘impact enablers’
- The dark money donors behind attacks on climate action and ESG
Featured: Climate Tech
As India gets hotter, its climate tech ecosystem has become cool. A booming clean energy sector is propping up China’s economic growth. In the US, the Inflation Reduction Act is spurring an investment and manufacturing boom, while decarbonizing the economy. Europe has its own Green Deal. The market to watch in the green transition? India. Economic and cultural factors including Narenda Modi’s robust economic plans, the pivot from China as a cleantech supplier to the West, and the sheer scale of India’s own transition are converging to make climate tech the place to be for the country’s startup entrepreneurs. Sweating through the climate disruptions already roiling India, the world’s most populous country and third-largest carbon emitter aims to peak carbon emissions by 2045 and reach net zero by 2070. A raft of new incentives for businesses and consumers to develop and adopt renewable energy and electric vehicles could accelerate the timelines and the country’s (eventual) exit from coal. “Now an entire ecosystem around climate change is getting funded,” Divya Pinge of the Impact Investors Council in Delhi tells ImpactAlpha contributor Shefali Anand. In a sign of the times, a handful of India’s climate tech entrepreneurs even pitched TV venture capitalists on the country’s hugely popular version of “Shark Tank” this spring, as Ryan Jones reports from Delhi. A preview of our two dispatches:
- Diversification of innovation. India’s new class of climate entrepreneurs and investors are building popular momentum for the clean energy economy. More than 90% of India’s climate finance in recent years has been going to electric vehicles and energy startups, making India the second-largest market for electric two-wheelers after China. Entrepreneurs are branching into supportive infrastructure, like battery charging, swapping and recycling, as well as financial services to drive adoption, reports Anand, a longtime correspondent for The Wall Street Journal (see, “Impact investors brave Delhi’s smog to champion climate finance in India“). Other ventures are helping decarbonize and climate-proof India’s agriculture sector, which employs 130 million farmers and their families. Post-harvest storage and finance venture Arya last week raised $29 million in growth equity from Blue Earth Capital, Asia Impact SA and Quona Capital. Indian investors and entrepreneurs are seeing climate impact and opportunity all around them. “Even people who are wanting to set up new funds – they are talking about climate,” says Girish Aivalli of the Impact Investors Council. Shefali Anand on climate tech deals and the trends.
- Pop climate. The hoopla around a Shark Tank “ecopreneur” special was seen by local climate entrepreneurs as a cultural marker for the country’s burgeoning climate tech ecosystem. Indian startups pitched carbon footprint calculators, yarns made from agricultural waste, and wastewater management software. The show “glamorized” climate tech startups, Sayesha Dogra, a KPMG consultant turned climate industry connector, told Jones over a chorus of rickshaw honks outside of Delhi earlier this spring. Climate founders, she says, are “riding the wave of entrepreneurship in India.” Dogra has a bird’s eye view of the growing grassroots enthusiasm among India’s professional class as founder of The Climate Party, a roving meet-up for Indians working or interested in the sector. In just over 12 months, The Climate Party has grown from a small gathering in New Delhi to monthly events across major Indian cities. “Everyone thinks [climate change] is a very distant problem, but it is also a very close problem,” observed Namita Thapar, a judge on Shark Tank India. Ryan Jones on India’s climate tech future through a pop culture lens.
Dealflow: Impact Exits
Exits for impact VCs Active Impact and Lightrock. A strong venture capital market requires a smooth exit market. But the slowdown in mergers and acquisitions and IPOs has made exits rare, complicating VC managers’ efforts to return capital to their investors. Active Impact Investments, based in Vancouver, has achieved three exits in its venture capital portfolio in the past month. The firm, a certified B Corp, notched an exit with Canada’s Keela, which was acquired last month by Aplos, a Fresno, Calif.-based software developer for nonprofit and faith-based organizations. Active invested in Keela through its first $10 million venture fund in 2018. The company has helped thousands of global nonprofit organizations raise $2 billion from donors since 2013. Another Active Impact portfolio company, New York-based Sustain.Life, was acquired in a $100 million deal last month. Sustain.Life builds software to help businesses track and report emissions from their operations and supply chains.
- Alternative exits. Separately, Lightrock, the impact arm of the royal family of Liechtenstein’s asset management group, exited Ummeed Housing Finance, which provides loans to low- and middle-income families and small businesses in India. Lightrock invested in Ummeed via its $900 million impact tech fund. Ummeed raised $76 million in a late-stage equity round last month, giving an exit to Lightrock through a secondary sale.
- Seeding secondaries. US-based North Sky Capital, which launched the world’s first impact secondaries fund in 2019, closed its ninth impact secondaries fund last week with $250 million. “Market conditions are terrific for secondaries buyers right now, especially in impact sectors,” said North Sky’s Tom Jorgensen. For the fund’s strategy, “there is a large and expanding universe of investable companies that meet our impact parameters and need our growth capital,” he added.
- Check it out.
Trill Impact targets life sciences and green technologies with €90 million venture fund. Stockholm-based Trill Impact has raised €1.3 billion ($1.4 billion) since 2019 across impact private equity, venture capital and microfinance strategies. Its inaugural $98 million Ventures Fund will invest in clean energy, smart mobility, advanced materials, and life sciences technologies focused on historically overlooked patients and markets. The Ventures Fund targets “impact enablers” – disruptive technologies that reduce emissions, resource consumption, waste or costs. Trill’s portfolio includes German smart-home energy startup Tado and UK-based Open Cosmos, which uses small multi-sensor satellites to collect data on climate change and humanitarian disasters.
- Impact management. Trill Impact’s Johanna Levander acknowledged the challenging environment for venture capital, “with a cautious sentiment and lower risk appetite across markets.” The Ventures Fund is backed by European institutional investors, including the Nordic financial services group Nordea and the $6 billion Swedish venture capital manager Saminvest. Trill Impact made BlueMark’s leadership board for how it manages the impact of its investments (see, “10 fund managers that are outperforming – in managing impact”). The firm helps portfolio companies develop environmental, social and good governance practices throughout the value chain.
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Dealflow overflow. Investment news crossing our desks:
- Calvert Impact secured a $140 million line of credit from Goldman Sachs’ Urban Investment Group for its Access by Calvert Impact’s national program, which leverages government funding from the State Small Business Credit Initiative to catalyze private investment in the smallest businesses in the US. (Calvert Impact)
- BlueOrchard’s second InsuResilience Investment Fund, which is targeting $100 million to increase access to affordable climate insurance in emerging markets, clinched a €5 million ($5.5 million) commitment from the Luxembourg-EIB Climate Finance Platform. (APEN)
- Black-led fund manager Zeal Capital Partners backed JISEKI, a California–based labor marketplace that connects employers and immigrants for good jobs with benefits. (Zeal Capital)
Impact Voices: Fiduciary Future
How oil barons and right-wing billionaires are manipulating the free market to extend fossil fuels. Professional investors understand that the long-term future of fossil fuel is bleak. To make the short term last as long as possible, “desperate fossil fuel majors have sued shareholders and funded trade associations, propaganda campaigns and politicians working to stunt the energy transition,” says As You Sow’s Andy Behar in his latest Fiduciary Future column. With threatening letters and subpoenas, the Republican-led House Judiciary Committee has tried to chill investor action on climate (for background, see, “On hearings and being heard“). The crusade is more than just a pet project of Republican Congressmen Jim Jordan and Thomas Massie, Behar says. “The ‘antitrust’ allegations are the latest smoke screen in a dark money crusade led by a handful of oil barons and right-wing billionaires using elected officials to manipulate the free market and ban information that investors need to make smart decisions,” he writes.
- Listening to Leo. Anticipating the November election of Donald Trump, oil executives are busy drafting ready-to-sign executive orders pushing natural gas exports, cutting drilling costs and expanding offshore oil leases. Right-wing billionaires have “piggybacked on efforts to insulate fossil fuels and added their own social agendas by attacking sustainable investing,” Behar says. At the center of the networks are conservative legal activist Leonard Leo and political donor Barre Seid. Leo funds a shadow network behind the Heritage Foundation’s Project 2025, the blueprint for a new administration that Trump embraced before he disclaimed it.
- Follow the money. Other organizations that Leo has funded include the American Legislative Counsel, the State Financial Officers Foundation, and the Republican Attorney Generals Association – the workhorses of the campaign to demonize environmental, social and governance, or ESG, investing. “ALEC drafts model anti-ESG bills, SFOF members ram those bills through red state legislatures, and RAGA provides the legal threats to silence opposition,” Behar asserts.
- Keep reading, “How oil barons and right-wing billionaires are manipulating the free market to extend fossil fuels,” by As You Sow’s Andy Behar on ImpactAlpha.
Agents of Impact: Follow the Talent
People moves
Ryan Bowers, a cofounder of Activest, joins the Decolonizing Wealth Project as vice president of finance and operations… Laura Hohenberger, previously with Leading Cities, joins Lafayette Square Institute as a data analytics and policy associate… Sarah Spencer-Workman, formerly with CBRE, joins energy transition software venture Sparkfund as executive vice president of customer solutions.
Donna Daniels of Possibility Labs joins the board of World Education Services… Leah Armstrong is stepping down as chairperson of First Australians Capital. Jocelyn King, FAC’s founding CEO, has taken the role of chair. Abhilash Mudaliar will represent FAC as deputy chairperson… Carolyn Ezelino is promoted to managing director and head of research at Sonen Capital.
Job openings
International Corporate Governance Network is on the hunt for a policy executive in London… Ananda Impact Ventures is recruiting for a venture capital investment manager in Munich and other roles… MCE Social Capital seeks an investment analyst focused on Africa… Draper Richards Kaplan Foundation has an opening for an associate of pipeline and partnerships in Boston.
Reinvestment Fund seeks a director of clean energy and sustainable finance lending… IDB Invest is recruiting a director of the Andean Region for its financial institutions division in Bogotá… The sustainability office at GIC, Singapore’s sovereign wealth fund, is hiring a sustainable investment strategy analyst.
Events
The Transformative 25 is hosting “Investing for racial equity,” with Aisha Weeks of Dearfield Fund, Napoleon Wallace of FundOne, Donna Daniels of Possibility Labs, James Wahls of Revolve Fund, and Sean Robinson of Radix Innovation Capital, Wednesday, July 17… Capshift will host “The rise of digital health and AI: Opportunities for health (in)equity,” with Kimberlee Cornett of the Robert Wood Johnson Foundation, Erika Seth Davies of Rhia Ventures, Rachel Nishimoto of Parnassus Investments, and CapShift’s Jordana Pleat, Thursday, July 18.
World Resources Institute is hosting “Discover climate data: From attribution to target setting,” with Climate Central’s Andrew Pershing, Climate Watch’s Leandro Vigna, and Cathline Nagel of Systems Change Lab, Thursday, July 25… ImpactAssets is hosting “Investing for climate resilience,” with Spencer Glendon of Probable Futures and ImpactAssets’ Margret Trilli, Thursday, Sept. 12… Accion Venture Lab is hosting its Fintech for Inclusion Global Summit in London, Thursday, Sept. 12. ImpactAlpha subscribers get 20% off with the code IMPACTALPHA20OFF.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– July 15, 2024