The Brief | October 12, 2020

The Brief: Tugende’s motorcycle loans, Aristata’s impact litigation, Black-owned neobank, JPMorgan’s racial justice pledge, hydrogen-powered trucks

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Double Feature: ImpactAlpha Originals

Tugende helps Uganda’s motorcycle taxi drivers survive the lockdown – and raises $6 million to grow again. This was looking like a stellar year for Tugende, the Kampala-based social lender that helps thousands of motorcycle taxi drivers in Uganda and Kenya go from renting to owning their “boda bodas.” Then came Uganda’s severe COVID lockdown. The company immediately faced a 90% drop in loan collections. Tugende – the name means “Let’s go!” – moved quickly to offer emergency grants to borrowers, pause repayments and defer staff salaries. “We understood that, however hard it was for us, it was worse for our clients,” Tugende’s Michael Wilkerson tells ImpactAlpha. Tugende’s crisis response went against the grain – and succeeded. This month, the company closed $6.3 million in Series A financing, led by Toyota Tsusho’s Mobility 54 venture fund. Tugende’s rebound, and its prospects for growth, provide a window into the risks and opportunities facing micro- and small-business lenders, and the businesses they support, as emerging markets emerge from COVID-caused disruptions.

Keep reading, “Tugende helps Uganda’s motorcycle taxi drivers survive the lockdown – and raises $6 million to grow again,” by Jessica Pothering on ImpactAlpha.

  • Agents of Impact podcast. Hear Tugende’s Michael Wilkerson recount the company’s origin story in a 2016 interview. Tune in.

Aristata Capital looks for social benefits and lawsuit payouts with an impact litigation fund. It was only a matter of time before someone put an impact spin on litigation funds, which in recent years have attracted billions in investor capital. The draw: the rich returns in lawsuits that have the potential to rake in big awards. That’s the idea behind Aristata Capital, one of the first to apply the model to legal cases that generate environmental and social gains in addition to payouts. A £10 million (about $13 million) investment from Capricorn Investment Group, which manages money for billionaire Jeff Skoll, will anchor the fund. Capricorn’s Ion Yadigaroglu acknowledged that litigation financing evokes a whiff of “ambulance chasing,” but told ImpactAlpha that the firm is attracted by “the strong and unique impact that litigation finance can deliver.” As the climate crisis heats up and inequality grows around the globe, says Aristata’s Rob Ryan, “We need to be using every tool possible.”

Keep reading, “Aristata Capital looks for social benefits and lawsuit payouts with impact litigation fund,” by Amy Cortese on ImpactAlpha.

Dealflow: Follow the Money

Greenwood raises $3 million for a digital bank for Black and Latinx customers. The ‘neobank,’ founded by former Atlanta mayor Andrew Young, rapper Michael ‘Killer Mike’ Render, and Bounce TV’s Ryan Glover, provides online banking services and ways to give back to Black and Latinx causes. “It’s no secret that traditional banks have failed the Black and Latinx community,” Glover said in a statement. “We needed to create a new financial platform that understands our history and our needs going forward.” Glover told CNN that Greenwood has a waitlist of tens of thousands of customers. The venture did not disclose its angel investors.

  • Black Wall Street. The bank’s name pays homage to the prosperous “Black Wall Street,” in Tulsa’s Greenwood District in the early 1900s. The new venture will provide donations to Black causes with each sign up and card swipe and a $10,000 grant each month to a Black or Latinx small business owner. It will make deposits to help strengthen historically black banks. Share this post.

JPMorgan commits billions to build Black and Latinx wealth. The U.S. bank is touting $30 billion in commitments to close the racial wealth gap. JPMorgan Chase will add $8 billion to the $4.2 billion pledged last year for mortgage lending to Black and Latinx households over the next five years. The bank also will boost lending to Black and Latinx small businesses by $2 billion in order to extend an additional 15,000 loans. And the bank will tie executive pay to diversity targets and spend $750 million on Black and Latinx suppliers. 

  • Racial justice pledges. JPMorgan’s commitment follows its pledge to align its financing strategy with the Paris climate agreement. Since the May police killing of George Floyd, financial institutions including Citi, Bank of America and Mastercard have made commitments to close racial wealth gaps. Share this post.

French oil giant Total backs hydrogen-powered truck maker Hyzon Motors. The investment from Total Carbon Neutrality Ventures is the oil company’s latest investment in cleaner energy, including electric-vehicle batteries and biofuels. A recent CarbonTracker analysis found that European oil companies are ahead of U.S. oil majors in preparing for an energy transition. Hyzon has raised more than $15 million to make hydrogen-powered big rigs, buses and coaches. Other investors include Ascent Hydrogen Fund, Hydrogen Capital Partners and Audacy Ventures Ltd. 

Agents of Impact: Follow the Talent

Women of Renewable Industries and Sustainable Energy names Norton Rose Fulbright’s Becky Diffen, US Bank’s Lan Adair Sasa, BlackRock’s Daniela Toleva and Goldman Sachs’ Yoomin Hong to its board of directors… Congruent Ventures is looking for an analyst/associate in San Francisco… Volunteers of America seeks a senior manager of social impact development in Alexandria, Va… Adasina Social Capital and Activest are hosting “Advancing Racial Justice through Municipal Bonds,” Thursday, Oct. 15.

Thank you for reading.

–Oct. 12, 2020