Greetings, Agents of Impact!
Featured: Deal of the Day
Temasek commits $500 million for a stake in LeapFrog Investments. Singapore’s state-backed investment arm will become part-owner in the pioneering emerging markets impact private equity firm and anchor its future funds. The commitment pushes LeapFrog’s capital raised past $2 billion. The investment is a “a trajectory-changing moment” for impact investing, LeapFrog’s Andy Kuper told ImpactAlpha. “We have confirmed that this is the largest ever single commitment to an impact investor. I am hopeful it marks a new era of scale and success for the global impact investment industry.” The Global Impact Investing Network’s Amit Bouri said the Temasek deal signals that “investors are prioritizing measurable impact alongside financial returns, demonstrating that each can enhance the other.” He called on investors to “step up the scale.”
- Impact pioneer. LeapFrog launched in 2007 with a then-unique mission to invest in companies delivering financial services (and later, healthcare) to the rising global consumer class. Investments in companies like remittance services provider WorldRemit, pension manager ARM Pension, pharmacy chain Goodlife, and insurance provider BIMA have provided services to more than 212 million, mostly low-income people worldwide. “The rise of these individuals, and their increased ability to access essential services, via technology-enabled solutions, are secular trends that will not go away,” Kuper said. Last year, LeapFrog expanded its health focus, backing genetic testing company MedGenome. LeapFrog is one of a few impact investors with a sizable roster of exits and partial exits—more than 10.
- Podcast interview. “Impact investing has to be the lever that’s long enough to move to this world,” Kuper said last year on ImpactAlpha’s Agents of Impact podcast (see, and listen to, “Leapfrog’s Andy Kuper on impact, exits and scaling growth in emerging markets through the COVID crisis”). “This world has four billion low-income people in it. So we really need to focus on those companies that are going to serve tens of millions of people with quality, affordable products and make sure they get the support they need.”
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Dealflow: Follow the Money
Vertical farm provider Infarm snags $100 million for produce grown in-store. The Berlin-based company makes small indoor vertical farms for herbs and vegetables that it sells to grocery stores to allow shoppers to pick their own produce. Infarm has operations in 10 countries and 33 cities, and partners with retailers such as Amazon Fresh, Kroger Co. and Whole Foods. Infarm has raised $400 million to date, including a $170 million Series C round led by LGT Lightstone in September.
- Specialty produce. The equity and debt funding will help the company meet demand for produce, especially in urban areas, which spiked during the COVID pandemic. Infarm will start growing mushrooms, tomatoes and chilies, Erez Galonska told Bloomberg.
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Dealflow overflow. Other investment news crossing our desks:
- Israeli cleantech venture H2Pro raises $22 million from Breakthrough Energy Ventures and IN Venture to scale green hydrogen production.
- Omidyar Network India invests in Mumbai-based insurance tech venture Riskcovry’s $5 million round.
- Kinara Capital secures 520 million rupees ($7.1 million) from IIX via its Women’s Livelihood Bond series (see, “IIX raises $27.7 million for third Women’s Livelihood Bond”).
- Nuru raises $1.2 million to develop solar mini-grids in the Democratic Republic of the Congo.
Signals: Ahead of the Curve
Six financial innovations for a sustainable recovery in Africa, Asia and Latin America. Voluntary and mandatory carbon markets are starting to drive sustainable investments around the world. Energy Peace Partners’ Peace Renewable Energy Credits, or PRECs, offer a way to bring such investments to 27 countries in Africa, the Middle East and South Asia that face a triple threat of climate vulnerability, energy poverty and conflict. Microsoft in November purchased the first PRECs issued by Energy Peace Partners for a commercial solar-plus-storage project underway in the Democratic Republic of the Congo to install 35 micro-grid connected street lights. The PREC concept is among a half-dozen ideas selected by the Global Innovation Lab for Climate Finance, an accelerator for sustainable finance innovations. The solutions, which span sustainable food systems, energy access and infrastructure, can help “enable a true transition as the world recovers from the pandemic,” said Barbara Buchner, who heads the Lab. The Lab has helped mobilize $2.4 billion for 49 instruments since 2014.
- Energy access. Women-led Nithio leverages data and AI to expand renewable energy lending to borrowers who lack credit scores, and combines that with cash flow-backed debt financing to improve energy access. The Brazilian Biogas Association is creating a fund that will provide financial guarantees required by banks for biogas projects. African infrastructure investor and asset manager ARM-Harith is developing a blended-currency vehicle with credit enhancements to scale up climate infrastructure investment in West African cities.
- Sustainable food. A Smallholder Resilience Fund proposed by One Acre Fund would deploy “synchronized investments” across the value chain of climate-friendly crops in Kenya and Rwanda. Brazil’s Maua Capital is providing upfront finance for sustainable supply chains based on customer commitments.
Reliable digital media is fertile ground for Media Development Investment Fund. The push: Government-backed media outlets and oligarch-vested interests are pushing down trust in journalism around the world. The pull: The rise of subscriptions, memberships and audience willingness to pay have created workable models for digital media. “Those that build businesses around the mission of providing reliable, quality, usable information – that’s a very attractive business model,” Media Development Investment Fund’s Peter Whitehead told ImpactAlpha. The New York-based nonprofit investor has fully deployed its $12.9 million private equity fund in nearly a dozen media outfits in India, Brazil, Indonesia and other countries hostile to a free press. MDIF closed the Emerging Media Opportunity Fund in early 2019.
- Independent voices. The independent media portfolio includes Sheroes, an India-based social media platform for women with 22 million users; Josh Talks, another India-based media platform mobilizing youth for good; and Suara, an Indonesia-based news outlet. Earlier investments include one of India’s leading digital news publishers Scroll.in; Indonesia’s Katadata, a data-driven business and finance news publisher; and Colab, a platform in Brazil that helps citizens hold local governments accountable.
- Media impact. The ventures reach a combined audience of more than 118 million. More impact investors understand the case for independent media, says Idriss Nor of the DOEN Foundation, which anchored the fund. Free and pluralist media is “crucial to an environment where education will become better, but also economies.” The Dutch foundation challenged MDIF to tie its carried-interest compensation to a range of mission-aligned indicators, including responsible exits.
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Agents of Impact: Follow the Talent
Andrew Steer, former head of the World Resource Institute, joins the Bezos Earth Fund as president and CEO… Former Massachusetts Gov. Deval Patrick, who founded Bain Capital’s Double Impact Fund, and Lauren Smith of the CDC Foundation join the board of Social Finance… BlackRock is hiring a director for its private market impact investor team in New York… BTG Pactual Timberland Investment Group seeks a senior associate/associate director in Seattle… B Lab is recruiting a senior director of community (location flexible)… Applications are open for Google.org’s Impact Challenge for Women and Girls.
Omidyar Network’s Aniyia Williams and Sarah Drinkwater are convening “The Tech Worker Labor Movement,” with organizer Adrienne Williams, Logic Magazine’s Ben Tarnoff, Karla Monterroso of Code2040 and Build Tech We Trust, and Coworker’s Liz Fong-Jones, Tuesday, Mar. 16… The Catholic Impact Investing Collaborative is hosting “A Just Transition,” with Jake Barnett of Wespath Institutional Investments, Christina Cobourn Herman of Interfaith Center on Corporate Responsibility, and Antonio Lopez of Chicago Frontlines Funding Initiative, Monday, Mar. 29… CASA is hosting “Making Inclusivity Work: A role for legal empowerment” with Empowering Producers in Commercial Agriculture, Wednesday, Mar. 31.
Thank you for your impact.
– Mar. 10, 2021