Greetings, Agents of Impact!
Featured: Impact Management
How one fund manager tech’ed up its data management in search of impact alpha. SJF Ventures believed better, faster and smarter impact data could set them apart. The Durham, N.C.-based impact venture capital firm had outgrown its Excel spreadsheets. Collecting and analyzing impact data from dozens of investments in energy, food, education and health over two decades and four funds had become unwieldy. Worse, the outdated system was hampering the fund’s ability to build more impactful companies. Over the past year, SJF spoke with more than a dozen providers of technology for impact measurement and management and mapped the offerings for alignment with the U.N. Sustainable Development Goals and the Sustainability Accounting Standards Board, as well as for capabilities for benchmarking, visualization and surveys. Among the providers: Aeris Atlas, Impact Delta, Proof of Impact and Tablecloth. SJF gave ImpactAlpha an early look at the resulting report, which chronicles the journey, maps the platforms, and shares the firm’s analysis.
SJF ultimately selected Upmetrics, a San Francisco-based platform originally designed to support nonprofits and foundations. “Impact drives alpha,” SJF’s Emma Sissman tells ImpactAlpha. With better data, the firm can demonstrate to limited partners the impact it is creating per dollar invested. Cleaner data also helps SJF tailor its support for portfolio companies. “The more impactful we can make a company, the more valuable it can become,” she says. The search for a technology partner led to a map that plots the platforms by their focus on ESG objectives versus impact outcomes, and orientation towards public versus private markets. Upmetrics scored on private markets and impact. The step-up by SJF signals the growing importance of quality, verifiable impact data as a differentiator for impact investors. “More and more funds have come to market with specific theses around what impact means to them,” says Sissman. “A core piece of differentiating your strategy is that you need to show that it’s working.”
Keep reading, “How one fund manager tech’ed up its data management in search of impact alpha,” by Dennis Price on ImpactAlpha.
Dealflow: Green Infrastructure
Green infrastructure fund raises $741 million for renewable energy and efficiency in India. The Green Growth Equity Fund will be managed by Mumbai-based EverSource Capital, a joint venture between Indian private equity firm Everstone and BP’s renewable energy arm Lightsource BP. EverSource will invest in renewable energy, energy efficiency, e-mobility, resource conservation, and waste and water management. The company’s goal is to build a portfolio in support of India’s COP26 commitment to develop 500 gigawatts of non-fossil fuel energy capacity by 2030. The U.K.’s CDC Group invested $70 million as part of its billion-dollar climate funding commitment for India by 2026.
- Climate finance. The fund’s portfolio companies include renewable energy developer Radiance Renewables, electric mobility developer Greencell Mobility, and waste management companies EverEnviro and Kathari. “Our investments have the potential of generating more than 450 billion kilowatt-hours of clean energy, avoiding more than 450 tons of CO2 emissions, creating tens of thousands of jobs, and adding over $5 billion to the Indian economy over the next decade,” said EverSource’s Dhanpal Jhaveri.
- Green wave. India’s renewable electricity development is growing at a faster rate than any other major economy, according to the International Energy Agency. This month, Reliance Industries, led by Indian billionaire Mukesh Ambani, said it would invest $80 billion in the state of Gujarat to develop renewable power and manufacturing for solar panels, fuel cells and electrolyzers. In October, TPG Rise Climate teamed up with Abu Dhabi’s ADQ to invest $1 billion in the electric vehicle unit of India’s Tata Motors.
Finclusion Group raises $20 million to become a credit-first neobank. The Singapore-based fintech firm, which offers credit and financial services through consumer brands in Kenya, Tanzania, South Africa and Eswatini (formerly known as Swaziland), says it made $30 million in loans in 2021 and grew its book by 30%. The company is expanding its services to better retain customers. As a credit-first neobank, Finclusion plans to offer savings products, credit cards and buy-now, pay-later options.
- Pan-African expansion. Fintech lender Lendable backed Finclusion last September via its fintech credit fund for emerging market companies (see, “How Lendable parses risks and returns to mobilize capital for inclusive fintech in emerging markets”).The new round of debt and equity was backed by individual investors including Flutterwave’s Lyinoluwa Aboyeji and LendInvest’s Christian Faes, and local funds in Eswatini and South Africa. Finclusion will use the financing to expand into Mozambique and Uganda.
Inventa scores $20 million to connect Brazil’s small retailers with global suppliers. The São Paulo-based company, launched last year, has built a digital marketplace for Brazil’s small businesses to purchase inventory. Inventa provides loans to buy goods, which are repaid after the products are sold. The company is looking to digitalize five million retailers that struggle to access financing for purchasing goods. Local impact-focused venture firm Monashees led the Series A financing round alongside Andreessen Horowitz. Check it out.
Dealflow overflow. Other investment news crossing our desks:
- Farmers Business Network and Environmental Defense Fund launch a $25 million credit fund to incentivize farmers to implement regenerative agriculture practices.
- Factorial Energy rakes in $200 million to commercialize solid-state batteries that it says improve driving range for electric vehicles over lithium-ion batteries.
- New York Life commits $50 million to Century Housing Corp. to provide loans for affordable and workforce housing developers in low-income communities.
- Closed Loop Partners secures $35 million from PepsiCo for a circular economy fund to invest in small-scale, modular recycling facilities in underserved communities.
Podcast: Bridging the Skills Gap
Daniel Pianko, Achieve Partners: Finding the alpha in apprenticeships. “What’s the biggest problem you face?” Pianko likes to ask CEOs. If the answer is, “I can’t find enough trained people to do X,” the company is a good candidate for Achieve Partners. The New York-based private equity firm raised $180 million last year to acquire companies in healthcare, information technology and other industries facing skills shortages. Then it helps them create two-year apprenticeship programs and move newly trained workers into high-quality jobs. “In every company we acquire, we look to train at least 1,000 people a year,” Pianko said on ImpactAlpha’s Agents of Impact podcast. “We can do that across 10 companies, and train 10,000 people every year. And over the 10-year life of the fund put 100,000 Americans in good first jobs.”
- Turning the tables. Pianko, host of the Better Money, Better World podcast, put some questions of his own to ImpactAlpha’s David Bank; the episode is being distributed on both platforms. Better Money, Better World is produced by Impact Capital Managers, an association of more than 70 impact investing funds that manage more than $15 billion. Pianko argued that the term “impact investing” should be reserved for market-rate funds, lest limited partners be scared away by the prospect of concessionary returns. “That was a two or three-year-ago thing,” Bank shot back. With financial institutions and managers falling over themselves to launch impact and ESG products, he asked, “Isn’t now impact the calling card? Isn’t there a premium?”
- Listen to Pianko’s and Bank’s full exchange. And follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
Agents of Impact: Follow the Talent
Jonathan Pershing, a U.S. climate envoy under John Kerry, returns to the Hewlett Foundation to run its environment program, effective March 1… Tayler James, ex- of The Weather Channel, joins The Plug as director of research… Consulting firm FSG names Chirlie Felix, ex- of Teach For All, and Shumeca Pickett, ex- of consultancy Alfred Dewitt Ard, as managing directors.
ChargerHelp and BlocPower partner to provide training and job placement for climate tech jobs in New York… TerraCycle is hiring a sustainability brand ambassador in Portland, Ore… PayPal is looking for a head of treasury impact investing and ESG in Austin… We Don’t Have Time seeks a climate dialogue advisor in Washington, D.C… We Care Solar is looking for a program manager in San Francisco… Airmee is hiring a head of sustainability and innovation in Stockholm.
Thank you for your impact.
– Jan. 25, 2022