Greetings, Agents of Impact!
Featured: Impact Voices
Three ways to invest in upskilling workers for the post-COVID economy. Among the reasons for the post-pandemic labor shortage: a dissatisfaction with frontline, poorly paid work. New financing mechanisms are helping workers upgrade their skills, occupations and industries. Investors can deploy capital through “career impact bonds” and funds dedicated to bridging the skills gap to benefit both workers and employers. “Investment funds that support the most disenfranchised individuals with the skills necessary for long-term success, offer a unique approach to meaningful economic and labor market recovery,” writes Capshift’s Adam Rein in a guest post on ImpactAlpha. “The private sector has an opportunity to put capital to work and help retool and reskill individuals for the shifting job market.”
- Risk shift. Boston-based Social Finance pioneered social impact bonds. Its UP Fund has raised $36 million for career impact bonds that cover upfront training and support services to reduce risks for workers preparing for new careers. Students repay the program costs with a percentage of their income, up to a cap, once they have a new job (hear Social Finance’s Tracy Palandjian on ImpactAlpha’s Agents of Impact podcast, “Career impact bonds transfer risk to investors as the future of work arrives“). Investors can also back Pursuit’s Bond 2.0. The Long Island City-based nonprofit focuses on technology training for low-income individuals without college degrees and blue collar workers in New York City.
- Good jobs. Rather than relying on “education up,” Achieve Partners’ Putting America Back to Work Fund works from the “employer down.” The fund acquires middle-market business services and staffing companies, helps them provide entry-level training, and places newly-skilled workers with businesses with identified skills gaps.
- Keep reading, “Three ways to invest in the upskilling of workers for the post-COVID economy,” by Adam Rein on ImpactAlpha.
Boston’s Ujima Fund demonstrates the (investment) power of neighborhood democracy. Nia Evans had had enough of racial inequities and the neglect of communities of color even before Boston’s tech and real estate booms started pushing out low-income residents. “We had been playing on the terms of city leaders and economic developers for too long. We needed to try something new,” said Evans, the former head of Boston’s NAACP who became executive director of the Boston Ujima Project. The Ujima Fund is one of the first “democratic investment funds” in the United States, write Ben Wrobel and Meg Massey in the third of three excerpts from their book, Letting Go: How Philanthropists and Impact Investors Can Do More Good By Giving Up Control. Six years on, Ujima Fund is still touted as the community investment fund model – because few communities have been able to replicate the model (see, “Centering community voices and power in investment processes”). Wrobel and Massey say that by surfacing more voices, funds like Ujima can elevate residents’ voices and make better investment decisions.
- Community-driven. The “community loan fund with a twist” brought together residents of Boston’s underserved Dorchester, Roxbury and Mattapan neighborhoods to vote on and invest in local businesses. The fund “was unlike anything I’ve ever gone to in Boston,” one attendee, Phuong Luong, told Wrobel and Massey. “They were intentionally lifting up the voices of the people attending, not just the leadership. It was class-integrated. There were people in wheelchairs; there were old-lady anarchists.” Ujima’s first investment was in Cooperative Energy, Recycling, and Organics, or CERO, a small composting startup founded by Josefina Luna, an immigrant from the Dominican Republic.
- Letting go. Catch up on earlier excerpts from Wrobel and Massey, “How investors are giving up control to democratize finance” and “Outsiders get the bulk of venture capital in Africa. Peer-selection can change the game.”
- Keep reading, “Boston’s Ujima Fund demonstrates the (investment) power of neighborhood democracy,” by Ben Wrobel and Meg Massey on ImpactAlpha.
Sponsored by BlueMark: Making the Mark 2021 (webinar)
Making the mark. The second annual “Making the Mark” report from BlueMark, a Tideline company, will provide an in-depth look at best practices in impact management, based on insights from 30 independent impact verifications across asset classes and investor types. BlueMark’s Christina Leijonhufvud will dig deeper in “How to be an impact leader,” with Tomi Amosun of Summit Africa, Elizabeth Boggs-Davidsen of U.S. International Development Finance Corp., Cecilia Chao of Bain Capital Double Impact, Maria Kozloski of the Rockefeller Foundation, and Jeremy Rogers of Big Society Capital. Join BlueMark’s free webinar Thursday, May 13, at 11am ET. Register today.
- Background reading. Catch up with “Why independent verification should be part of every investor’s impact management journey,” by BlueMark’s Sarah Gelfand.
Dealflow: Follow the Money
Mexico’s Graviti raises $2.5 million to help unbanked Latin Americans pay for appliances. The Mexico City-based “buy now, pay later” company launched in 2019 to help low-income and unbanked families in Latin America purchase sustainable appliances. Families that cannot afford to pay upfront “have no access to loans because they are unbanked,” Graviti’s Yusef Jacobs told Crunchbase. The seed investment will help Graviti offer a new product every two months, including washing machines, dryers, solar heaters and refrigerators. Graviti offers loans without credit checks or initial payments, and doesn’t charge interest on late payments.
- Seed investors. San Antonio-based Active Capital led the round, with participation from Mucker Capital, Clocktower Technology Ventures and angel investors. Inclusive fintech accelerator and investor Catalyst Fund backed the company last year (see, “Catalyst Fund announces new inclusive fintech cohort”).
Something Better Foods secures $500,000 to bring plant-based foods to underserved communities. The Oakland, Calif.-based company aims to make plant-based foods affordable and accessible, particularly for Black and Brown communities. Something Better develops plant-based meat alternatives, including meatballs, steak, fried fish and chicken, for chefs and restaurants under the Better Chew brand. The investment will enable Black-owned Something Better to “provide meaningful employment opportunities for the local community,” says Chef GW Chew.
- Closing wealth gaps. Oakland’s ICA is a community development financier that invests in companies working to close the racial and gender wealth gap. Its investment in Something Better Foods was made via its Growth Fund, which makes growth equity investments of up to $1 million in companies in the Bay Area.
- Dig in.
Dealflow overflow. Other investment news crossing our desks:
- Bangalore-based Teachmint raises $16.5 million to help teachers across India conduct online classes.
- Copper Cow Coffee, a sustainably-focused and Vietnamese-American led coffee company, raises $8.5 million from Cultivian Sandbox and Arborview Capital.
- Neobank Alt.bank secures $5.5 million to provide financial services for unbanked Brazilians.
- Vancouver’s CubicFarm Systems, founded by farmers, scores $1.5 million to farm livestock feed indoors.
Agents of Impact: Follow the Talent
Ommeed Sathe, ex- of Prudential Financial, joins Lafayette Square as head of strategy (hear Sathe on ImpactAlpha’s Beyond Tradeoffs podcast, “An 80/20 rule helps an institutional investor manage its risks, returns and impact”)… Chris Tsakalakis, ex- of Vivino and StubHub, is the new CEO of Kiva, succeeding Neville Crawley. Affirm’s Silvija Martincevic joins Kiva’s board… Deborah Gallegos, previously with the New York City Comptroller, joins Palladium Equity Partners as managing director… Brandon Kelly, ex- of Home Bank, joins Square as Community Reinvestment Act officer.
Jomayra Herrera, previously with Emerson Collective, joins Reach Capital as partner… Steve Chung, ex- of Green Climate Fund, joins Reinvestment Fund as senior director for clean energy and sustainability… Jorge Cruz, ex- of New Jersey Community Capital, joins LISC Greater Newark as executive director… Former CFTC chair Timothy Massad joins Ethic as strategic advisor… Pathik Shah, ex- of Bain Capital Double Impact, joins Two Sigma Impact as a senior associate… ReFED is looking for a vice president of data and insight products… Harmony Labs is hiring a senior data scientist… The City of Philadelphia is recruiting a senior manager for climate mitigation.
Trust Neighborhoods seeks an operations associate in Kansas City, Mo… Rhia Ventures is hiring a senior program associate… BLCK VC is hosting “Startup Neo-colonialism? Exploring the bias of VC investment on the African continent,” with Lewam Kefela of Village Capital, Olugbenga Agboola of Flutterwave, Rebecca Enonchong of AppsTech, Toni Campbell of Kinfolk Venture Capital, Kolade Aderele of Access Ventures, and Ibrahim Balde of Base Ventures, Thursday, May 13 (see, “Outsiders get the bulk of venture capital in Africa. Peer-selection can change the game”).
Thank you for your impact.
– May 5, 2021