Greetings, Agents of Impact!
ImpactAlpha Podcast: Returns on Investment
Sir Ronald Cohen: ‘We are overthrowing the dictatorship of profit’ (podcast). The popular protests that drove the GSG Impact Summit out of Santiago, Chile, added “a poignant urgency” to the first day of the global gathering of impact investors in Buenos Aires, Sir Ronald Cohen said in a podcast interview with ImpactAlpha’s David Bank. Despite the disruption, the Global Steering Group on Impact Investing gathered nearly 40 delegations committed to building national impact investing ecosystems. “Impact investment is a very powerful approach to deal with inequality,” said Cohen, the British venture capitalist who chairs the GSG. He said the conference’s first day sought ways “to take our efforts to much greater scale, much more quickly, in order to help heal some of the wounds that have been opened in many places.”
The challenges of building a popular constituency for the mobilization of private capital for public good have moved to the very center of the impact investing discussion. Impact investing proponents once touted the bipartisan appeal. Liberal social-change advocates would be eager for additional financing. Conservative business interests would like the market-based models. As it turns out, large parts of the left distrust private investors, while many on the right continue to dismiss the business case. “People advocating for socialism may well reject impact investment, because they don’t understand that although it is using market forces and entrepreneurship and innovation, its intention is markedly different,” Cohen said. “We are overthrowing the dictatorship of profits, and we are putting impact by profit’s side to keep it in its place.”
Keep reading, and listen in to, “Sir Ronald Cohen: ‘We are overthrowing the dictatorship of profit’ (podcast)” by David Bank on ImpactAlpha. Catch up on all our podcasts (and subscribe for free) on iTunes, Spotify, SoundCloud or Stitcher.
- Putting the activist in impact investor. “Trumpeting data on returns on an impact investment might be good news to a skeptical banker, but it’s going to sound an awful lot like profiting off the poor to everyone else,” writes ImpactAlpha contributor Meg Massey. “It’s time for impact investors to speak more like activists.” Dig in.
Dealflow: Follow the Money
Alitheia and IDF Capital raise $20 million for African gender-lens fund. There aren’t many female-led investment funds in Africa, but investors are buying into the few there are. Nigeria-based Alitheia Capital and South Africa-based IDF Capital have scored $20 million for a joint fund to invest in small and mid-size African businesses boosting women’s economic empowerment and financial inclusion. The fund, Alitheia IDF, is aiming to invest half of its capital in women-owned or -led businesses and to mobilize a total of $100 million for women-led businesses. Other targets: creating 5,000 jobs for women in its portfolio’s supply chain and enabling access to essential products and services for 100,000 women. The African Development Bank invested $12.5 million; FinDev Canada kicked in $7.5 million.
- Gender lens in Africa. Nigeria’s Aruwa Capital recently launched is own gender lens fund (see, “Agent of Impact: Adesuwa Okunbo Rhodes, Aruwa Capital Management”). The European Investment Bank’s new SheInvest initiative aims to mobilize €1 billion in investment capital for women’s empowerment in Africa.
- Check it out.
Medikabazaar raises $16 million for India’s medical supply chain. Inefficiency and lack of transparency in the medical supply chain are obstacles to affordable and quality healthcare in India. Mumbai-based Medikabazaar runs a medical supplies marketplace to make healthcare necessities more available, particularly in tier two and three cities and rural areas. The firm raised $15.8 million to support its goal of serving 50,000 hospitals and clinics from 20 fulfillment centers by 2020. Venture capital firm Health Quad re-upped an earlier commitment, and was joined by Belgian impact investing firm Kois Invest and other new and return investors. Read on.
European Commission backs €70 million in guarantees for African impact entrepreneurs. Risk-guarantee schemes with Dutch and Italian development banks aim to unlock €500 million in private investments on the continent.
Ellen DeGeneres and Portia de Rossi back vegan dairy startup Miyokos. The celebrity couple backed Miyokos with an undisclosed amount of funding to support expansion of its vegan cheese and butter product line.
Netherlands’ top banks invest in €21 million women-focused fund. ABN Amro, ING and Rabobank backed Borski Fund, a fund for Dutch women-led startups from entrepreneur network The Next Women and sustainability-focused investor StartGreen Capital.
Impact Voices: Pass the Mic
“Sandboxes for nature” could speed up environmental innovation. Innovation and regulation are often at odds. In regulation-heavy sectors such as finance and energy, “regulatory sandboxes” have opened a space for controlled experimentation by creating temporary exemptions from outmoded regulations and letting startups test new approaches. In a guest post on ImpactAlpha, Phoebe Higgins of the Environmental Policy Innovation Center, argues sandboxes could also help speed up innovation in environmental restoration as well. If regulatory structures are not helping to restore species or habitats, writes Higgins, “Testing new approaches that incorporate the latest technology, even if they don’t fit under current regulation, is worth trying.” Some benefits to Sandboxing Nature:
- Attracting risk capital. Sandboxes can help “move beyond what investors or donors view as un-investable, experimental pilot projects that can’t be replicated,” writes Higgins. In the U.K., more than 40% of the 18 startups that participated in the first finance-focused sandbox in 2017 attracted funding.
- Payments for soil health. The U.S. Department of Agriculture pays farmers and ranchers for adopting conservation practices that improve soil health. A sandbox could test alternatives to USDA’s cumbersome approach, for example, by allowing farmers and ranchers to get paid a set amount based on soil health outcomes rather than practices.
- Stormwater management. Many cities have installed expensive water treatment systems to manage harmful stormwater runoff. New techniques that could be more cost effective face red tape, including multi-year consent decrees and permit renewal processes. A sandbox could “create a quicker path for EPA or states to approve permit amendments and other approvals, and quickly deploy and learn from new techniques.”
- Keep reading, “‘Sandboxes for nature’ could speed up environmental innovation,” by Phoebe Higgins on ImpactAlpha.
Agents of Impact: Follow the Talent
Miriam Warren (Yelp), Tyler Nickerson (Amalgamated Bank) and Alexandra Aquino-Fike (East Bay Community Foundation) join CommonFuture’s board of directors… Rekha Unnithan, a Nuveen impact-investing portfolio manager, and David Haddad, ex- of Olympus Partners, were named co-heads of impact investing at Nuveen… Lemelson Foundation is hiring a chief financial and administrative officer… Media Development Investment Fund seeks two evaluation consultants… Humanity United, the Freedom Fund and UBS Optimus Foundation call for proposals to shift the way investors address forced labor and other forms of modern slavery.
Thank you for reading.
– Nov. 19, 2019
