Greetings, Agents of Impact!
Featured: Food Systems
Investing to transform food systems in the face of a global crisis. The food crisis has become a global catastrophe. The combined impact of the invasion of Ukraine, climate-related droughts and other disasters and instability has an estimated 323 million “marching toward starvation,” according to David Beasly, head of the U.N. World Food Program. “In response, investors must undertake a shift to create healthy, equitable, and sustainable food systems – much as they did with their work in the energy sector,” Rex Raimond of the Transformational Investing in Food Systems, or TIFS, initiative writes in a guest post. Mirroring the work around climate finance, “investors are increasingly recognizing that a ‘systems approach’ is needed to transform our food economy into one that prioritizes healthy, equitable, and renewable processes.” In a new report, the Global Alliance for the Future of Food and TIFS lift up investment strategies to move food systems towards greater resilience. Among them:
- Blending capital. Don’t limit systems transformation to what’s investible – integrate investment dollars with other financing mechanisms, such as grants or in-kind donations. Sylva Food Solutions in Zambia combined 40% capital and 60% in-kind land, machinery and vehicle purchases with a grant from the World Bank to construct a facility to scale the company’s healthy food-processing business.
- Guaranteed markets. Farmers, particularly those that operate small farms, often grow surplus crops without opportunities for sale, leading to waste and reduced incomes. Investors can support entities that offer guaranteed markets and/or payments to these farmers. In Mexico, Educe Cooperativa leverages organic and Fair-Trade certification to provide its beekeeper members with regular, advance payments of up to 60% of their honey.
- Fair-cost financing. Capital offered should be fair and inclusive in structure and approach. The Northern Co-operative Development Bank, which supports local cooperatives in Sri Lanka’s Northern Province, has solicited grants, zero-interest loans, crowdfunding, and technical and in-kind assistance to provide small amounts of capital to women, farmers and other marginalized groups.
- Shared ownership. Growth and development of food systems should be guided by principles of participatory governance and inclusive ownership. In the United States, Organically Grown Company actively involves its employees, farmers, customers, community allies, and investors in the benefits and structure of its business (for background, see, “Organically Grown Co.: This is what stakeholder capitalism looks like”).
- Procurement dollars. Organizations often have resources already at their disposal to help the transition to sustainable food systems. Copenhagen, for example, leveraged the city’s procurement process to purchase local, healthy, organic, and fresh foods, increasing demand and sending a market signal.
To build health and resilience into our food systems, “we need to bring together policymakers, social entrepreneurs, investors, philanthropic groups and others to work towards these bold goals,” Raimond argues. “The time is now to invest in and strengthen our resilience.”
- Keep reading, “Investing to transform food systems in the face of a global crisis,” by TIFS’ Rex Raimond on ImpactAlpha.
Dealflow: Waste-to-Value
Strella Biotechnology secures $8 million to reduce produce waste. Investments in “demand planning,” to better understand the perishability of food products, for example, are on the upswing, ReFED’s Alejandro Enamorado wrote in a guest post on ImpactAlpha this week (see, “What $8 billion in food waste investments tells us about what’s next”). Philadelphia-based Strella Biotechnology, whose biosensors help measure the ripeness of produce, has raised $8 million in a round led by Millennium New Horizons, with participation from Google Ventures and Mark Cuban. The technology helps growers and retailers monitor and maintain produce freshness from harvest to grocery store shelf. “More and more retailers are making waste reduction their top priority,” said Millennium’s Ray Cheng.
- Circular economy. Other startups are raising capital to create value from waste. Australia’s Scipher Technologies scored $15 million to recycle electronic waste. In Oakland, Calif., SolarCycle snagged $6.6 million to recover vital materials from used solar panels.
- Check it out.
Terra.do scores $5 million to connect global professionals with careers in climate tech. Investors and executives in climate tech are seeing an upswell of talent (for context, see “In Silicon Valley, talent follows the capital — and the optimists — into climate tech”). The U.S. Bureau of Labor Statistics projects significant growth in climate-related occupations by 2029. Through its app, Stanford, Calif.-based Terra.do helps climate tech employers access prospective employees from around the world. Terra.do has connected over 10,000 professionals with more than 100 employers via its virtual job fairs. Hiring partners on the app include Arcadia, BlocPower and Pachama.
- Green jobs. “The current talent funnel for climate- and sustainability-trained professionals is broken, creating a large gap that will need to be filled at Internet scale,” said Anjali Bansal of Avaana Capital, the $150 million climate fund that led Terra.do’s round. BEENEXT, City Light and the TELUS Pollinator Fund for Good participated, alongside more than 150 individual investors.
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Fund news overflow. There were launches, raises and closes all over:
- Sorenson Impact Group launched Enable Ventures to invest in startups building solutions for people with disabilities. The disability fund is one of two new funds that will be managed by Sorenson’s new asset management business, along with one existing fund.
- Dutch impact investor FOUNT and The Hague Institute for Innovation of Law launched the Innovating Justice Fund to back ventures that improve access to justice services for disadvantaged communities in emerging markets (go deeper on investment opportunities in SDG No. 16: Peace, justice and strong civic institutions).
- Atlanta-based o15 Capital Partners secured $10 million from Invesco to make credit and equity investments led by and serving undercapitalized entrepreneurs and communities.
- CEI-Boulos Capital Management raised $10 million from NBT Bank to invest in real estate projects in low- and moderate-income communities.
And two notable deals:
- Greenhouse startup Little Leaf Farms raised $300 million in a round led by TPG’s The Rise Fund.
- Telehealth provider Boulder Care raised $36 million from investors including Qiming Venture Partners, Goodwater Capital, and Laerdal Million Lives Fund to treat patients with substance use disorders.
Agents of Impact: Follow the Talent
Van Jones, founder of social enterprises including Color of Change, Green for All and Dream Corps, and co-founder of Reform Alliance, receives the Nelson Mandela Changemaker Award… Matthew Schick, ex- of Entrepreneurial Equity Partners, joins Creation Investments as chief operating officer. Flor Torres, previously with Harbor Capital Advisors, joins the Chicago-based firm as investor relations manager.
Ontario Teachers’ Pension Plan is hiring a principal of total fund management for responsible investing in Toronto… Blue Haven Initiative is looking for an associate to support its ventures investment portfolio… TBLI is accepting applications for the TBLI Better World Prize for best ESG/Impact measurement system.
