Greetings, ImpactAlpha readers! Here’s a short roundup from a short week.
#Featured: The Brief’s Big Five
- A bipartisan morsel in the Republican tax bill (yes, we found one). We’re waiting for the fine print, but the “Investing for Opportunities Act” that is part of the bill could draw significant investment to low-income communities. The provision lets investors temporarily defer taxes by investing their capital gains in distressed areas, roughly defined as census tracts with poverty rates of 20% or median family income below 80% of a state’s median. The Joint Committee on Taxation estimates the provision will cost the Treasury $7.7 billion from 2018 to 2022. Here’s the scoop.
2. A big opportunity to improve financial services for overlooked Americans. These populations, including low income, the elderly and those without credit histories, spent $141 billion in fees and interest in 2016, suggesting a huge opportunity for a new wave of fintech companies. Between 2010 and 2015, $12 billion was invested in financial technology, or fintech, startups worldwide. EverSafe, for example, protects elders against fraud and identity theft. Propel helps food stamp recipients manage their spending. Nova Credit helps immigrants build a credit history. Colleen Briggs and Ryan Falvey spotted patterns in the 1,000 companies reviewed by the Financial Solutions Lab. Read on.
3. Spending political capital to decarbonize New York’s pension funds. Between New York Gov. Andrew Cuomo’s call to end fossil-fuels investment in the $192 billion New York State Common Retirement Fund and New York City Comptroller Scott Stringer’s plan to divest fossil fuel holdings from the city’s five pension funds representing $160 billion in assets, the divest-invest movement picked up some heavyweight support. “The future of the economy and the future of our children is all in clean technology and we should put our money where our mouth is,” Cuomo said. Here’s more on New York’s plans for 2018.
4. The GHIF finds its groove, making its 10th investment. The Gates Foundation and JP Morgan Chase launched the Global Health Investment Fund several years ago to finance more, and more effective, vaccines and drugs for diseases the burden the poor, such as as malaria, Zika, Ebola and HIV. Investors were initially reluctant, and the $108 million fund had a slow start. Now, the GHIF has made its 10th investment, in Vienna-based Themis Bioscience, which has shown promising results with its vaccine for the mosquito-borne chikungunya virus. What’s that?
5. And here are some holiday #dealflow we didn’t want to miss!
- Boston-based Sunwealth closed its Solar Impact Fund, which lets investors back commercial solar projects through bonds and tax equity offerings.
- Mission Driven Finance, in San Diego, made the first loans from its Lotus Credit Fund to Thrive Public Schools, a free public charter school group in San Diego, and All Across Africa, a National City, Calif.-based artisan training and employment network.
- Colombian venture capital firm Odiseo made its first investment — $125,000 — in LiftIt, an on-demand service that matches trucks and drivers with customers looking to move cargo. Pomona Impact invested$250,000 in Energryn, a company in Mexico that manufactures hybrid solar-electric water heaters. Both Odiseo and Pomona Impact are Capria Network investment funds.
- In Dubai, MetLife Foundation awarded grants to three winners from Village Capital’s Middle East financial health competition: mobile-payments startup Bridg, financial management tool Ennota and employee management service 1Clique Systems.
That’s a wrap. Have a great weekend! Please send news and comments to TheBrief@impactalpha.com.