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The Brief: Today’s Call, spectrum of justice, barbershop tech, philanthropy’s COVID bonds, crowd-financing community solar, Nestlé vs. Danone



Greetings, Agents of Impact!

Zoom into The Call. How are emerging markets investors safeguarding impact in the COVID crisis? On today’s Agents of Impact Call No. 18, the IFC’s Neil Gregory, Symbiotic’s Safeya Zeitoun, Finance in Motion’s Sandra Abella, DEG’s Julian Frede, Blue like an Orange’s Bertrand Badré and other Agents of Impact will detail their approaches to impact monitoring and crisis response. Join The Call today, Thursday, June 11, at 10am PT / 1pm ET / 6pm London. Haven’t RSVP’d? Zoom right in.

  • Join the conversation. We’ll keep the channel open after today’s call for networking and discussion. Share your thoughts before, during or after today’s call on ImpactAlpha’s #management-measurement Slack channel. Not yet on Slack? Sign up and click “channel browser” in the left column.

Signals: Ahead of the Curve

Spectrum of companies, capital and creatives aim for justice. Protests in the streets continue to challenge systemic injustices. Agents of Impact at this week’s Spectrum conference, produced by SOCAP, presented a vision for systemic inclusion. Media producers can hold up stories told by Black, Indigenous and other communities of color. Entrepreneurs can tap the economic potential of changing lives in marginalized communities. Investors can seek impact alpha in inclusion. Overheard at the virtual event: 

  • Change narratives. “Representation matters,” says actress Erika Alexander, co-founder of Color Farm Media. Alexander’s onscreen character, Maxine Shaw in Living Single, has inspired leaders like Stacey Abrams, Marilyn Mosby and other politicians, judges and teachers. “If you want to really change policy, if you really want to influence culture,” she said, “you should tell the story.” Untold stories of communities of color are not only important but valuable. “This isn’t charity,” she says. Investors should expect “a valuable return on investment inside of a community that needs it.”
  • Value stakeholders. Don’t extract value, be valuable, says Diishan Imira, who founded Mayvenn to financially empower Black hair stylists. “There’s tremendous amount of untapped potential in terms of returns in companies whose aim and mission is to really change people’s lives.” Recognize the value of key stakeholders, says Kesha Cash of Impact America Fund, a Mayvenn investor. Mayvenn “is built around the value of the hairstylist,” she said. CareAcademy, another Impact America investment, “is being built around the value of the direct care worker.”
  • Close capital gaps. MacArthur Foundation has become the largest investor in Impact America’s second fund. MacArthur’s Debra Schwartz said funds like Impact America are part of a next wave of intermediaries “building a more just, equitable and inclusive world through purposeful investing and finance.” The investment was made as part of the Catalytic Capital Consortium (see, Indispensable element in many impact investments: ‘catalytic capital’). “We need capital that aims for justice,” said Schwartz.
  • Access to equity. Black and Latinx entrepreneurs in Chicago face a gap of at least $146 million in venture capital, according to “The Equity Capital Gap,” from Next Street. “This is a business opportunity,” said Next Steet’s Charisse Conanan JohnsonNeeded: Equity-like capital products that meet the needs of moderate-growth businesses. Revenue-based investment platform Founders First, which last year raised $100 million, is expanding to Chicago from San Diego, Dallas and Austin. Says Johnson, “Now is a time for large institutions to use their wealth and use their platforms and use their power to make different decisions about where capital goes.”
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Dealflow: Follow the Money

Squire secures $34 million for financial services for barbershops. High-contact businesses like nail and hair salons, barbershops and spas have been crippled by COVID, with many workers losing income for months. To reopen, they have “been forced to modernize overnight, where scheduling and digital payments have become imperative to their operations and livelihood,” observes Reid Christian of early-stage tech investor CRV. Squire’s business-management platform helps small, independent barbershops with online scheduling and contactless transactions. CRV led the barbershop tech startup’s Series B round. Tiger Global, the San Francisco 49ers, and former Infor CEO Charles Phillips joined, along with existing investors Trinity Ventures, Catalyst Fund, Y Combinator and others.

  • Recovery and growth. Squire’s round includes $7 million in debt financing to offer financial services for barbershop owners to retool for new social distancing requirements and reclaim financial losses. “Small businesses are hurting right now,” Squire’s Songe LaRon said. “Fortunately, barbershops are well-positioned to thrive in an economic downturn since people will always need haircuts.”
  • Take a spin.

Ford, MacArthur and other foundations to issue bonds to scale up COVID relief. Ford Foundation expects to issue $1 billion in long-term bonds, according to a report by The New York Times. “There’s never been such an existential challenge to the future of the nonprofit sector,” said Ford’s Darren Walker.

  • COVID bonds. The foundation plans to issue 30- and 50-year bonds and distribute proceeds to nonprofits over the next two years. Ford gave out $520 million in grants last year. “It occurred to me that the cost of borrowing for highly rated institutions would have to be very low,” Walker said. MacArthur Foundation will start with a $125 million bond offering. Doris Duke Charitable Foundation will issue bonds as well. Kellogg and Andrew W. Mellon foundations also are working on financial plans to increase their giving, according to the Times. The Carnegie Corporation is among foundations that declined to pledge to spend more.
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Sun Exchange closes $4 million round to crowd-finance community solar. The Cape Town-based startup identifies schools, nature reserves and other locations ripe for solar power generation and crowdfunds the capital to install solar panels. Then, community users repay funders for the power they consume—all on blockchain. The company says it has facilitated solar installations for 31 schools, businesses and organizations in South Africa. ARCH Emerging Markets Partners led the round through its Africa Renewable Power Fund. Alphabit, a hedge fund focused on blockchain and cryptocurrencies, previously backed the company.

Harambe Entrepreneur Alliance launches relief fund for COVID-affected African startups. The entrepreneurship leadership network is making $1 million in low-interest loans to tech startups founded by its members. Nigerian ride-hailing company Max.ng and agtech venture Releaf have each secured $100,000.

Series: Impak Battles

Corporate impact face-off: Nestlé vs. Danone. The global food powerhouses have been buffeted by the COVID storm: long lines for food, flour shortages and other supply-chain disruptions, and pressure to improve wages, benefits and working conditions for low-wage food workers now considered essential. How do Nestlé and Danone stack up on sustainability and impact? Impak Battles, a new ImpactAlpha series with impak, a Montreal-based impact ratings agency, assesses the positive and negative impact of corporate operations. Each month, the agency will use its impak Score rating methodology in a head-to-head assessment of two representative companies. Kicking off the series: a comparison of the two European agri-food giants. Let the battle begin! Face-off.

Agents of Impact: Follow the Talent

500 Startups is hiring a director for the Middle East and North Africa in Riyadh, Saudi Arabia… New Media Ventures is recruiting a head of investments… JPMorgan Chase seeks an ESG specialist for its Global Index Research Group in New York… Phenix Capital needs an impact investing intern in Amsterdam… Blue Access is looking for a water justice intern in New York.

The University of Cape Town’s Bertha Centre for Social Innovation and Entrepreneurship has openings for innovative finance consultants… New American Economy is recruiting a part-time senior policy fellow in New York… MovingWorlds Institute is seeking early- and mid-career professionals for its Global Fellowship… Responsible Investor is holding its Summer 2020 Digital Festival, June 15-19.

Thank you for reading.

–June 11, 2020

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