Greetings, Agents of Impact!
🎙️ Hop on today’s Call, “The employee-ownership edge.” Join Mosaic’s Ian Mohler, World Education Services’ Smitha Das, Apis & Heritage’s Todd Leverette, Common Trust’s Zoe Schlag and Anna-Lisa Miller of Ownership Works, today at 10am PT / 1pm ET / 6pm London (no RSVP necessary, but you will need to sign in to your Zoom account). Zoom right in.
- Catch up quickly. “Financing transitions to employee ownership delivers wins for workers – and investors”
Featured: GIIN Impact Forum
Elevating our collective leadership and accelerating our shared momentum. The Global Impact Investing Network’s Amit Bouri is preparing his keynote address at next week’s Impact Forum in Copenhagen. “I’ll be focused on a critical element of our work: collective leadership,” Bouri writes in a guest post on ImpactAlpha. That means building the industry’s infrastructure for data-driven decision-making, Bouri says, “to create a race to the top for impact performance and crowd in new investors.” And it means designing novel, catalytic approaches to scale climate solutions and activate capital towards impact. “Now is the time we reorient impact so that every financial decision, whether it involves individual retail investors or large institutions, is evaluated through an impact lens,” Bouri writes.
- On the ground. ImpactAlpha is a media partner for the GIIN forum in Copenhagen, as well as for the GSG Global Impact Summit in Spain next week. We’ll report back on panels on climate solutions for the low-income consumers, scaling the circular economy, and asset-owner approaches to impact. And we’re bringing together Agents of Impact at side events in Málaga on Monday with SVX Mexico (see, “Stewarding capital for Mexico’s regenerative economy”) and in Copenhagen on Tuesday, with Oxford’s Saïd Business School and Founders Factory Africa (see, “Healthcare innovation in Africa”), and Wednesday, with Tideline and BlueMark (see, “Creating a benchmark for impact integrity”).
- Impact insights. Among the promising trends identified in the GIIN’s 2023 GIINsight survey is the growing commitment to impact investments by pension funds and insurance companies. Capital from such institutional investors grew at a compound annual growth rate of 32% between 2017 and 2022, making it the fastest-growing source of impact capital, according to the survey. And after several years of hiding out in developed markets, many impact investors plan to boost their allocations to emerging markets. Investors surveyed said they plan to allocate more capital to Africa (56%), Latin America and the Caribbean (48%), Southeast Asia (42%) and South Asia (40%).
- Keep reading, “Elevating our collective leadership and accelerating our shared momentum,” by the GIIN’s Amit Bouri on ImpactAlpha.
Dealflow: Good Jobs
Secha Capital inks $15.8 million to back South Africa’s growing businesses. Unemployment in South Africa, the worst in the world, remains stubbornly high. Secha Capital is working to strengthen the country’s key jobs creator: small businesses. The firm operates as a holding company, taking equity stakes in companies and providing operational support for their growth. “We’ve identified a gap in the market,” said Secha’s Rushil Vallabh. “We invest in companies at an inflection point in their growth trajectory.” Secha has invested in 10 companies that now collectively employ 500 people.
- Job creation. Secha has raised 300 million rand ($15.8 million) for its second fund, which has a 650 million rand target. The venture arm of Rand Merchant Bank, 27four Investment Managers and Caleo Capital invested alongside SA SME Fund, a jobs-focused fund of funds that backed Secha for its “track record of job creation, transformation, growth and exits,” said SA SME Fund’s Claudia Manning. The four portfolio companies in Secha’s second fund have created 200 jobs. Secha’s Brendan Mullen told ImpactAlpha the firm intends to make 10 more investments to support the creation of 1,000 jobs in the next five years.
- Check it out.
Kern Tec lands $12.8 million to make dairy alternatives from upcycled produce. The one-third of grown food that goes to waste is an enormous lost opportunity. It’s also an environmental liability, accounting for as much as 10% of global greenhouse gas emissions. Austria’s Kern Tec is redirecting and processing a portion of Europe’s 550,000 tons of discarded fruit seeds, such as cherry and peach pits, into oils and pulp for alternative dairy products and cosmetics. Its Series A round was backed by Telos Impact, PeakBridge VC and the European Innovation Council.
- Alt-milk fad. Dairy milk consumption still far outpaces plant-based alternatives. But alt-milk consumption is growing at a faster rate, in part because of the relatively lower environmental footprint. Kern Tec touts its apricot seed milk, available in Austrian grocery stores, as cheaper and less water intensive than almond milk, a popular dairy alternative.
- Food waste. Separately, Mill Industries in the US raised $70 million for a subscription food waste collection service. The company provides food scrap bins to households, then collects the scraps for processing into chicken feed. The round was backed by Prelude, Lowercarbon Capital, GV, Breakthrough Energy Ventures and Energy Impact Partners.
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Dealflow overflow. Other deals crossing our desks:
- Omidyar Network, Open Society Foundations, the Skoll, Hewlett and Kellogg foundations, and other philanthropies committed $50 million to BuildUS to make grants to accelerate state and local efforts to utilize federal climate investments. The foundations aim to empower workers to engage in the clean energy transition and overcome obstacles to climate-focused solutions. (Hewlett Foundation)
- Common Future invested $1 million in Philadelphia-based Kensington Corridor Trust and New Orleans-based Jane Place to advance community-owned real estate and access to affordable rental housing. (Common Future)
- Fifty Years invested in Elicit, which is using AI to “automate the brute force task of plowing through the world’s compendium of scientific knowledge” on climate change, health and other challenges dependent on science and engineering solutions. (Fifty Years)
- Pexapark secured €20 million ($21 million) from Telstra Ventures, Swisscom Ventures and A&G Energy Transition Tech Fund for its software that helps renewable energy investors gauge market dynamics and assess project risk. (PV Magazine)
Short Signals: What We’re Reading
🇬🇧 Growth of UK impact investing. Social impact investing in the UK grew by 18% last year, increasing to £9.4 billion ($11.4 billion), from £7.9 billion in 2021. Investment in the sector has increased more than ten-fold since 2011. (Big Society Capital)
💸 Greening corporate cash. Corporations’ cash holdings can significantly add to their total greenhouse gas emissions depending on how their banks manage their holdings. A new guide outlines seven actions climate-leading companies can take to assess and curtail emissions. (Exponential Roadmap Initiative)
⚡ 20 million heat pumps. A coalition of more than two dozen US governors announced a push to deploy 20 million heat pumps by 2030. That would represent a quadrupling from 2020 of the number of installed heat pumps. (CNBC)
Agents of Impact: Follow the Talent
Generation Investment Management’s Just Climate names Eduardo Mufarej, ex- of Good Karma Ventures, co-chief investment officer at and head of the firm’s newly launched natural climate solutions… Christian Friend, ex- of Thrive Chicago, joins Tides as senior director of justice, equity, diversity and inclusion… Carbon Equity is looking for a head of sales to lead commercial operations in Belgium, the Netherlands and Luxembourg… Elemental Excelerator seeks a remote director of innovation… The Global Impact Investing Network has an opening for an impact principles director in New York.
Thank you for your impact!
– Sept. 27, 2023