The Brief: Systemic risks at Silicon Valley Bank, women-led businesses in LatAm and Asia, SPAC deal on deadline, catalytic capital grants, US SIF’s new chief

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Greetings, Agents of Impact!

Featured: Systemic Risk

Climate tech and other startups exhale after the U.S. backstops Silicon Valley Bank depositors. At the end of a nervous weekend, disaster was averted for Silicon Valley’s ecosystem of climate tech, health tech and other startup companies and venture capital funds. With the federal government stepping in to assure access to their deposits at Silicon Valley Bank, tens of thousands of companies should be able to make payroll and pay other bills this week. “Startup innovation in America is saved!” BlocPower’s Donnel Baird tweeted after the emergency measures were announced late Sunday. Baird and others had warned that the bank’s meltdown threatened to set the thriving climate tech ecosystem back by a decade or more. Silicon Valley Bank was a leading provider of loans to pre-revenue startups based on their ability to raise equity rather than cash flow, also known as venture debt. “There was no other bank, regional or national, that was as deeply involved or as good a partner as Silicon Valley Bank,” says Todd Johnson of Activate, the network of fellows spun out of the U.S. national laboratories. All of our allies in venture, in startups, in climate were heavily working with Silicon Valley Bank in one way or another,” adds Johnson, who is also a member of ImpactAlpha’s board of directors.

If Thursday’s extraordinary run on the bank and Friday’s seizure by state and federal regulators exposed systemic risks in the banking system, the weekend’s mobilization also highlighted the resourcefulness of a distributed network of lenders, fund managers and advocates. “The longer term effect of losing that impact capital at a time when fundraising was already becoming more difficult would slow progress significantly toward our dual goals of limiting climate change and reducing inequality,” said Caroline Bressan of Open Road Alliance, who fielded calls from frantic founders and fund managers all weekend. Open Road was prepared to provide bridge loans against receivership certificates issued by the U.S. Federal Deposit Insurance Corporation (see, “Short-term loans are a safety net as social enterprises face an ‘unexpected OMG moment’”). Other initiatives ready to raise philanthropic and other capital for dedicated relief funds include Prime Coalition, Enduring Planet and Brex. “A lot of this machinery has been really well developed by our field already,” says Shu Dar Yao of advisory firm Lucid Capitalism. “Impact investors were very willing to work with founders that needed help over the weekend. It left me feeling heartened about the community we’ve built.”

Sponsored by CalCEF Innovations

Seeking proposals for a China climate ETF or mutual fund. California Clean Energy Fund (CalCEF) Innovations, a nonprofit public benefit corporation, is seeking proposals from sustainable financial advisors and fund management companies that specialize in the development of climate-aligned exchange-traded funds and mutual funds, as well as the marketing of those investment products to U.S.-based retail and institutional investors. The purpose of the request for proposals is to expand China-focused, climate-aligned investment product offerings for the U.S. market through the development of a climate-friendly fund product – in the form of an ETF, index fund or mutual fund that tracks a designated climate index. The RFP will offer a sponsorship of up to $300,000 to deliver the fund. All work required for regulatory approval must be concluded by Oct. 31, 2023.

  • How to apply. Proposals must be submitted by Friday, Mar. 31. For more information read the full RFP.

Dealflow: Financial Inclusion

Accial Capital secures $35 million to finance women-led businesses in Latin America and Asia. The Miami-based investment firm provides debt to startups and financial institutions serving businesses and consumers. Its portfolio includes fintech ventures like Avista in Colombia, which provides payroll and pension scheme-backed financing to rural and small-city borrowers. Accial provided $22.5 million in debt to Avista earlier this month. It has also provided venture debt to Mexico-based Minu, which partners with employers to provide financial education and financial health services to employees. Calvert Impact invested $10 million in Accial’s latest funding round. The U.S. International Development Finance Corp. and Symbiotics also invested.

  • Gender lens. The company says its portfolio has disbursed $1 billion through 700,000 loans. Accial’s Jared Miller added that the company plans to “expand our investments with responsible fintech lenders, increase access to credit in emerging markets, and deepen our focus of supporting women borrowers that account for close to half of the dollar value of our portfolio.”
  • Check it out.

Off-highway vehicle electrification company ZeroNox to go public via SPAC as deadline looms. Special purpose acquisition companies, or SPACs, took the market by storm in 2020 and 2021. Nearly 250 SPACs with a total value of $83 billion were brought to market in 2020. The first quarter of 2021 alone topped all of 2020’s SPAC activity. Their downfall came just as swiftly: last year saw the highest number of withdrawn SPAC deals on record. Now, hundreds of SPACs holding roughly $18 billion in cash are facing deadlines to get deals done, request an extension, or return their cash to shareholders. Among the latest deals: California-based ZeroNox, which is electrifying off-highway vehicles ranging from wheelchairs to garbage trucks, last week announced it will go public via a transaction with The Growth for Good Acquisition Corp., a SPAC that raised $253 million in December 2021. The deal would value ZeroNox at $306 million. Upon closing, the company’s common stock is expected to trade on the Nasdaq under the ticker symbol ZNOX.

  • Electrify everything. ZeroNox makes zero-emission electric powertrains for off-highway vehicles and provides infrastructure for electric vehicle charging stations and batteries. Electrifying the off-highway vehicle market is a $1.3 trillion opportunity, says ZeroNox. The company has generated $20 million in revenue in the past two years, delivering 800 vehicles to customers. The company says it has $180 million under contract for 2,000 units in three years.
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Catalytic Capital Consortium provides grants to three organizations. The C3 collaboration between the MacArthur and Rockefeller foundations and Omidyar Network is supporting Zambia’s impact investing national advisory board to develop financing pathways for small businesses, and Total Impact Capital to deploy its “impact notes.” The Coalition for Green Capital is working to build a retail network to deploy capital from the U.S.’s Greenhouse Gas Reduction Fund (for context, see, “‘Green Bank’ in climate bill to provide catalytic capital for renewable energy and community resilience”). Catch up on all of ImpactAlpha’s coverage of catalytic capital, sponsored by C3.

Dealflow overflow. Other investment news crossing our desks:

  • Patagonia’s food and beverage group, Patagonia Provisions, acquired climate-friendly snack company Moonshot.
  • Denmark’s Copenhagen Infrastructure Partners acquired a controlling stake of South African renewable energy developer Mulilo.
  • Bank of America invested in the BFM Fund, for Black Founders Matter. The Portland-based, seed-stage venture fund said BofA became a “significant investor” in its first close.
  • Berlin’s Trawa raised €2.4 million ($2.6 million) to help Europe’s small and medium-sized businesses switch to clean energy. 

Agents of Impact: Follow the Talent

US SIF names Maria Lettini as its chief executive officer. Lettini, currently executive director of FAIRR Initiative, will succeed Lisa Woll starting May 15… Jessica Brooks, ex- of Sunwealth, is named chief development officer for Capital Link. Brooks will remain a Sunwealth advisory board member (see, “Agent of Impact: Jessica Brooks”)Federico Mambelli, ex- of Sagana, joins Lendable as a quantitative data associate. 

EY promotes Michelle Davies to global sustainability legal services leader, a new role… responsAbility is hiring a climate finance investment analyst in Mumbai… Acumen is looking for a program associate for its Acumen Academy in London… Fidelity Investments is looking for an ESG research lead in Bangalore… Root Capital seeks an East Africa portfolio manager in Nairobi and a Ghana portfolio manager.

Alinea International seeks a contractual executive director for its Aliados de Impacto initiative in Lima, Peru… Sagana Capital seeks a remote investment manager and a remote consulting directorGenZero is recruiting an ESG and impact measurement senior associate and several other roles in Singapore… Also in Singapore, GIC is recruiting an assistant vice president for sustainable investing research. 

Women’s World Banking is hiring a remote global head of brand, marketing and communications… Accion seeks a director of public relations and communications… The San Francisco Employees’ Retirement System has an opening for an ESG investment officer… Nia Impact Capital is hiring a remote operations and communications associate.

Thank you for your impact.

– Mar. 13, 2023