Greetings, Agents of Impact!
Featured: Food Tech
Food banks and food donors get a tech makeover to reduce hunger and food waste. Food donors and hunger-relief organizations have relied on phone calls and hand-drawn routes for picking up and dropping off donations. Software solutions are helping food-rescue organizations improve operations and streamline the experience for their food donors. Case in point: Goodr, which helps businesses donating food maximize their tax incentives and coordinate pickup and delivery. The company raised $8 million earlier this month. Service providers are “working together to expand and improve these customer-oriented technological solutions to get food to the people who need it most,” ReFED’s Alejandro Enamorado writes in a market update for ImpactAlpha. ReFED’s analysis suggests that donation coordination and matching alone can save 144,000 tons of food from going to waste each year, an annual net benefit of nearly $600 million.
- Coordination and access. Nonprofit Feeding America improved its donation process by developing MealConnect to coordinate pickups of donated food to its food banks and nonprofit partners. Similar technologies have been developed by Replate (headquartered on the West Coast) and Philadelphia-based 412 Food Rescue, which created Food Rescue Hero. Bitwise and City Harvest also have developed tech solutions to improve access to food rescue services.
- Demand drivers. “Technology is not a silver bullet,” writes Enamorado. “Is the tech being built scalable and can it address the problem at a systems level?” In businesses with commitments to reduce or divert food surplus rather than dispose of it, “food rescuers are recognizing a revenue-generating opportunity in the build-out of tools that can quantify impact in dollars,” he says. For funders, that means metrics that demonstrate results.
- Keep reading, “Food banks and food donors get a tech makeover to reduce hunger – and food waste,” by ReFED’s Alejandro Enamorado on ImpactAlpha.
Dealflow: Agtech
Gates Foundation-backed Enko raises $70 million for sustainable crop treatments. The Connecticut-based company uses machine learning and drug discovery to develop non-chemical modes of killing agricultural pests and weeds. Its first commercial product will be an herbicide that targets “superweeds” resistant to glyphosate-based treatments, like Roundup, which have been linked to cancer in humans. Agriculture’s widespread use and dependence on chemical fertilizers and pesticides “has led to rampant resistance that is threatening farmer livelihoods and our food supply,” says Enko’s Jacqueline Heard. Enko counts global agrochemical companies like Syngenta and Bayer as partners in developing the treatments. Nufarm, another agrochemical company and existing investor, led Enko’s Series C round.
- Emerging markets. The Bill & Melinda Gates Foundation led the company’s $45 million Series B round in 2020 “to accelerate the development of innovative products that can be made available at an affordable price to smallholder farmers in sub-Saharan Africa and South Asia.” Smallholder farmers in emerging markets historically have had to wait a decade or more for access to new technologies. Enko’s commitment to global access to its technologies “is the center of its agreement with the Gates Foundation,” a spokeswoman told ImpactAlpha. Such “global access agreements” are a linchpin of the charitable purpose of the foundation’s tax-advantaged program-related investments.
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American Forest Foundation’s $10 million green bond connects forest owners to carbon markets. Nearly 40% of forestland in the U.S. is family owned. The American Forest Foundation wants to incentivize such smallholder forest owners to conserve and protect their land by connecting them to carbon markets. The nonprofit, with support from Morgan Stanley and The Nature Conservancy, issued a $10 million green bond to support its Family Forest Carbon Program. The program pays forest owners to learn and implement sustainable, long-term management practices. It then measures and verifies sequestered and stored carbon so that families can sell carbon credits. The program’s goal is to improve management on 55 million acres of forestland in the U.S. and mitigate 90 million tons of carbon annually.
- Equitable access. Two-thirds of family forest owners have household incomes of less than $100,000. “The biggest barrier for many landowners is the large amount of upfront capital typically required by carbon projects,” explained American Forest Foundation’s Rita Hite. A portion of the bond’s proceeds will support underrepresented landowners.
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Village Capital selects 10 tech startups to accelerate innovation in health equity. Miami-based SpeechMD has a voice and language platform for vulnerable patients, including immigrants and the elderly. Chicago-based Scripted connects non-urgent care patients to in-person pharmacies. And InovCares in Silver Spring, Md., provides telehealth services for women of color. The startups are among the new cohort in Village Capital’s Innovations in Health Equity accelerator program that, in partnership with Johnson & Johnson Impact Ventures, supports early-stage startups serving frontline healthcare workers, increasing access to healthcare, and improving the effectiveness of such services. Four out of the ten startups will be peer-selected for a $50,000 grant each; eight out of 10 are BIPOC-led.
- Financial health. Separately, Village Capital made an undisclosed investment in fintech startup LoanSense through its Financial Health Innovation Fund, a $3 million program-related investment fund that it manages on behalf of MetLife Foundation. LoanSense will partner with mortgage lenders to help student-loan borrowers get approved for mortgages. Village Capital is accepting applications for its Innovations in Justice Tech fellowship (for context, see “‘Justice tech’ entrepreneurs look to disrupt the cycle of recidivism”).
- Investing in health. J&J Impact Ventures sponsors ImpactAlpha’s Investing in Health coverage, exploring impact investments in purpose-driven entrepreneurs working to improve health outcomes for underserved communities around the world.
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Dealflow overflow. Other investment news crossing our desks:
- SOURCE Global, which uses solar hydro panels to draw clean water out of the air, raked in $130 million from Breakthrough Energy Ventures, Microsoft’s Climate Innovation Fund, Fifth Wall, Lightsmith Group and others.
- Arable raised $40 million from investors Galvanize Climate Solutions, Prelude Ventures, S2G Ventures and Ajax Strategies to advance climate resilience in agriculture.
- Black woman-led neobank Guava scored $2.4 million to provide financial services to Black-owned small businesses and creators.
Series: Seeding Impact
Impact investors collaborate to amplify the impact of their catalytic capital. Patient, flexible investors are pushing the needle on high-impact transactions with deep developmental impact for vulnerable populations. “I believe that as catalytic investors, we have a responsibility to work collaboratively to ensure a more efficient process for our clients,” argues Dia Martin of the U.S. International Development Finance Corp. in the latest post of ImpactAlpha’s series, “Seeding Impact,” with the Catalytic Capital Consortium. The DFC’s Portfolio for Impact and Innovation, or PI2, has committed more than $300 million to over 50 high-impact investments. Earlier-stage organizations are often juggling fundraising goals along with managing business operations, says Martin. “With a spirit of partnership, we can be engaged, proactive and creative in efficiently supporting the most impactful projects.” Among the collaborative strategies:
- Connect as a community. Each catalytic investor brings its own strengths, resources and idiosyncratic requirements. “We must know each other and proactively build a catalytic investor community that shares knowledge and coordinates in critical areas such as business development, transaction structuring and capital deployment,” says Martin.
- Encourage investor leadership: Some of the most efficient investor consortiums have one or two investors that emerge as the effective leads. “This can result in a more efficient engagement process for clients,” Martin says. “Consistent investor-to-client messaging results in a smoother origination and closing process.”
- Think big and start small. Many initiatives supported by catalytic capital may initially stretch the limits of larger institutional catalytic capital providers. It is easier to get started with a smaller group of investors with more flexible capital mandates to support a proof-of-concept or pilot. Once proven, the pilot can be structured with a framework for scaling over the longer term.
- Keep reading, “Impact investors collaborate to amplify the impact of their catalytic capital,” by the DFC’s Dia Martin. Catch up on the rest of ImpactAlpha’s “Seeding Impact” series.
Agents of Impact: Follow the Talent
Shaun Donovan, who served in the Clinton and Obama administrations, joins Ford Foundation as a senior fellow… Ellen Jackowski, ex- of HP, joins Mastercard as chief sustainability officer… Donna Riley Bebb, formerly of Google, joins Thomas Bravo as head of ESG… Ann Klee, who led ESG efforts at General Electric, joins Energy Impact Partners’ ESG advisory board… Ajax Strategies is hiring a hybrid-remote senior associate in the San Francisco Bay Area.
Acumen seeks an associate in New York… The James B. McClatchy Foundation is looking for an impact associate in Sacramento, Calif… Equitable Facilities Fund is hiring an investment associate in New York… Illumen Capital is recruiting an impact associate… Lincoln Institute of Land Policy’s Legacy Cities Community of Practice is accepting applications from local city leaders through Friday, Sept. 16.
Opportunity Finance Network is accepting nominations for the Ned Gramlich Lifetime Achievement Award for Responsible Finance. OFN’s annual conference convenes in New York City, Oct. 18-21… Black Philanthropy Month U.S. Global Summit takes place Aug. 3-31… Aspen Network of Development Enterprenueur’s annual conference convenes Sept. 15-22 in Washington, D.C.
Thank you for your impact!
– July 27, 2022