Greetings, Agents of Impact!
Featured: Policy Corner
Impact investors show how ‘supply-side’ policies can leverage private capital for public good. With no shortage of demand, the Biden administration in the U.S. is taking a fresh look at the other side of the economic equation: supply. With President Biden’s Build Back Better plan stalled in Congress, the floor is open for new approaches to deliver on social and environmental priorities, without massive government outlays and without accelerating inflation. Some of the supply-side mechanisms and market dynamics may look familiar to impact and sustainable investors, who for decades have been honing investment practices to expand the supply of good jobs, affordable housing, clean energy and regenerative agriculture. “Modern supply-side economics prioritizes labor supply, human capital, public infrastructure, R&D, and investments in a sustainable environment,” Treasury Secretary Janet Yellen said in Davos last month.
Among the tools in the supply-side toolbox: catalytic capital in the form of first-loss and loan guarantees, expanded access to credit for small businesses and disadvantaged communities, expanded research and development (and commercialization of same), and risk-taking grant capital. Agents of Impact might counsel that such policies also prioritize impact measurement and reporting, accountability and intentionality. “What we need is market shaping, not just market fixing,” economist Mariana Mazzucato told The New York Times’ Ezra Klein. “We need to see the crowding-in effect, not just the crowding-out effect.” At the Department of Energy, Jigar Shah is starting to deploy $40 billion from the loan programs office, which has provided catalytic funding to companies scaling energy technologies, including electric vehicles (think Tesla), modular nuclear reactors and fusion. The U.S. Innovation and Competition Act, pending in Congress, would help unsnarl supply chains, expand international development finance, and establish regional innovation hubs – all good ways to build back better.
Keep reading, “Impact investors show how ‘supply-side’ policies can leverage private capital for public good,” by Dennis Price on ImpactAlpha.
- Call No. 38: Public policy. Private capital. Public good. Agents of Impact will key in on the upcoming rule-making by the SEC around ESG disclosure, climate risk reporting and human capital management. Join the U.S. Impact Investing Alliance’s Fran Seegull, former ESG advisor at the SEC and EPA Satyam Khanna, and Cambria Allen Ratzlaff of the UAW Retiree Medical Benefits Trust and the Human Capital Management Coalition, Tuesday, Feb. 22 at 10am PT / 1pm ET. RSVP today.
Dealflow: Growth Markets
Ibtikar’s second fund raises $15 million for Palestinian tech. The Ramallah-based fund is building on the thesis of its first fund in 2016: that Palestinian tech entrepreneurs building regional and global businesses are an undertapped VC opportunity. “Technology is borderless. You can build a tech company from here, you can support markets anywhere from here, and it can be done profitably and effectively,” Ibtikar’s co-founder Ambar Amleh told ImpactAlpha. The Bank of Palestine anchored Ibtikar’s second fund, which is targeting a $30 million close later this year. The Dutch Good Growth Fund kicked in $6 million. The International Finance Corp. and a number of Palestinian investors also participated. A portion of the IFC’s commitment is tied to the Women Entrepreneurs Finance Initiative, or We-Fi, a World Bank-led effort to mobilize $3 billion for women entrepreneurs in emerging markets.
- Track record. Amleh launched Ibtikar with Habib Hazzan and Reem Qawasmi to help promising businesses in the West Bank and Gaza graduate from startup accelerators to seed and Series A financing. “There was a lot of intense effort at the ideation stage of business, and then nothing,” she explained. Ibtikar has made 26 investments, including in Mashvisor, a provider of global real estate investment data, and Tawazon, an Arabic language meditation app. Women lead 40% of Ibtikar’s portfolio companies. “It’s so important to have women around the investment committee table,” Amleh says.
- Read on.
Nigeria’s Flutterwave rakes in $250 million at a $3 billion valuation. The Lagos-based company launched in 2016 to help banks and businesses in emerging markets transact across borders and currencies. With more than 900,000 business users in 34 African countries, Flutterwave has facilitated over 200 million transactions worth more than $16 billion. “We set out to build a platform that would simplify payments for everyone, and today our solutions are used around the world to connect Africans to the world and the world to Africans,” said Flutterwave’s Olugbenga Agboola.
- Digitizing Africa. The Series D round, which nearly tripled Flutterwave’s $1 billion valuation from its last round, was led by Alta Park Capital, with participation from Tiger Global, Salesforce Ventures, Lux Capital and others. Flutterwave itself has backed inclusive tech companies including Bankly, a digital payments company for unbanked Nigerians; Disha, a payments platform for digital creators; and most recently CinetPay, an online payments processing company in francophone Africa.
- Check it out.
Global Cleantech Capital raises $75 million for growth-stage clean energy companies. The Amsterdam-based venture capital firm is on the hunt for future leaders in decarbonization and financing for the energy transition. Portfolio companies are “leveraging industry infrastructure ‘hiding in plain sight’ for faster, cheaper scaling,” said GCC’s Christie Franchi. Investments include Houston-based Nacero, which makes low-carbon gas from renewable natural gas in solar and wind-powered facilities; Lake Prime, a London-based company aiming to build sustainable infrastructure for decentralized computing; and Crowdz, a San Francisco-based fintech venture managing a financing marketplace for small businesses. Share this post.
Dealflow overflow. Other investment news crossing our desks:
- Crowdforce raises $3.6 million in pre-Series A funding to improve access to cash withdrawal ATMs for Nigerians in underserved communities.
- Novoloop scores $11 million in Series A financing to upcycle plastic waste into materials used in footwear, apparel, sporting goods and electronics.
- The Growth Collective, a Black woman-owned advocacy group and investment firm, receives $450,000 in grants to help Black developers in Philadelphia raise capital.
Agents of Impact: Follow the Talent
Kiva is hiring a senior director of impact in Portland, Ore., or San Francisco… UBS seeks a head of community impact programs in New York… Environmental Resource Management is looking for a U.S.-based senior environmental justice / impact assessment consultant… Powell Tate seeks an accounts director for social impact in Washington, D.C… Dropbox is recruiting a social impact and sustainability program manager… Propel seeks a vice president and chief financial officer… ImpactAlpha is hiring a director of subscription growth… The Collective Network and 17 Asset Management are hosting “Philly Forward: Driving Change through Holistic Real Estate Development,” today at 10am ET.
Thank you for your impact.
– Feb. 17, 2022