The Liist | July 11, 2023

The Liist, July 2023: Green twists on inclusive, place-based investing

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, July 11 – Diverse clean tech founders in Los Angeles. Shopping centers in Chicago. And diverse, women-centered neighborhood real estate nationwide. 

Fund managers on this month’s Liist of impact funds currently raising capital are financing underserved communities and founders, climate justice and the green transition.

In Los Angeles, the third largest metro economy in the world behind Tokyo and New York, the LA Cleantech Incubator is raising its second fund to support diverse-led cleantech ventures that participate in its accelerator programs. Its portfolio includes ChargerHelp, a Black women-founded business that trains low-skill workers to become electric vehicle charger repair technicians and helped establish certification for the job (see, “Agents of Impact: Evette Ellis and Kameale Terry”).

In Chicago, Chicago Trend is promoting community ownership and wealth creation for Black residents by co-investing in shopping centers, renting space to Black-owned businesses and contracting with Black service providers. Part of its strategy focuses on community climate resilience through solar installations, landscaping and energy efficiency. The firm’s new fund is expanding the strategy to Black urban neighborhoods across the US. 

In underserved communities across the US, Enterprise’s Community Loan Fund provides flexible real estate financing for affordable housing and community facilities, paying special attention to diverse- and women-owned developer borrowers (listen to our podcast conversation with Enterprise’s Lori Chatman).

Climate investing is a focus for all of the funds on this month’s Liist. Prethvi Ventures in New York is raising a second early-stage climate tech fund. It wants 60% of its portfolio to be women-led companies. Unitus Capital in India launched its planned $50 million UC Impower Fund to invest in growth-stage climate ventures, as well as inclusive fintech ventures. BIX Capital in the Netherlands provides working capital tied to impact ventures’ certified climate receivables in order to bolster the climate resilience of low-income and rural households in the Global South. Ultra Capital Energy Transition Fund is investing in early-growth stage companies building sustainable infrastructure and supporting adoption of clean energy.

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(Disclaimer: The Liist and this post are based on available information, sourced by ImpactAlpha. Information has not been further reviewed by the managers nor verified by third parties, is not guaranteed for accuracy or completeness, and should not be relied upon as investment advice or recommendations. Nothing in The Liist, this post or on shall constitute an offer to sell or the solicitation of an offer to buy securities.)

BIX Capital Impact Receivables Finance Fund

Netherlands-based BIX Capital is solving for the working capital challenges of climate impact ventures catering to low-income and rural communities in the Global South.

BIX’s Impact Receivables Finance Fund provides loans against the value of receivables to providers of clean cookstoves, water purification systems, biogas digesters and other climate products. Companies’ income channels must be impact-certified, such as verified carbon credits, to be eligible for BIX’s loans.

The firm has made 10 investments, including C-Quest Capital, which supports access to clean cookstoves and low-energy LED lighting, and Sistema Bio, a maker of small-scale biodigesters.

  • Blended finance fund. BIX was founded by impact fund managers FOUNT and Cardano Development, with support from the Shell Foundation. It’s nearing a $40 million first close for its planned $80 million fund with backing from development agencies FMO, DFC and the IFC. The fund includes a 20% first-loss layer to provide risk protection to investors. Contact Jeroen Blüm to learn more.

Enterprise Community Loan Fund

Green affordable housing. Inclusive communities. Female homeownership. Enterprise’s Community Loan Fund, offers flexible loans to community organizations, nonprofits and mission-aligned enterprises to finance the predevelopment, construction and acquisition of affordable housing, health clinics, grocery stores, schools and other community facilities.

The community development financial institution has raised $2.6 billion for the open-ended fund from investors including Aflac, Greater Washington Community Foundation and US Bank via its Racial Equity Bond. The Maryland-based fund is open to accredited and institutional investors, as well as retail investors through a retail tranche.

  • Returns on inclusion. The Community Loan Fund is addressing stark racial ownership disparities by providing real estate developers of color with project financing and unsecured lines of credit. It provided a $2.5 million loan to a Black-owned developer to acquire a site for 128 affordable homes for formerly incarcerated individuals in Denver. The fund last year invested $73 million in 20 women-led real estate projects, including Excelerate Housing Group’s permanent supportive housing development in Long Beach, Calif.
  • Green housing. The loan fund tailors its loan products to developers aiming to green affordable housing properties. The fund financed a project of another Enterprise entity, Enterprise Community Development, to install 2.2 megawatts of solar panels on four housing sites in Washington, DC. Contact Anna Smukowski for more information about the fund.

LACI Impact Fund

LA Cleantech Incubator launched more than a decade ago as an economic development initiative of the city of Los Angeles and its Department of Water and Power to fund diverse-led cleantech solutions in the LA metro area. The organization has helped 340 portfolio companies raise about $680 million and create more than 2,500 jobs.

LACI is raising its second fund to support founders of clean mobility and energy, circular economy, and sustainable urban tech startups from its accelerator program with early- and growth-stage capital. The fundraising target is $30 million to $55 million to make seed to Series B-stage equity investments. In January, LACI reached a first close for the Delaware-domiciled fund with backing from bodybuilder, actor and California’s former governor Arnold Schwarzenegger, among others.

  • Circular carry. Early investments from LACI’s second fund include Repurpose, which makes plant-based compostable tableware and trash bags, and EV charger repair service ChargerHelp. LACI has committed to reinvesting its portion of carry into its accelerator program. Contact Abraham Baca to learn more. 

Prithvi Ventures Climate Fund

Early-stage climate tech investing has shown resilience to the latest VC downturn. New York-based Prithvi Ventures invests early in high-tech ventures that it believes have the potential for gigaton-scale carbon emission reduction. It has made 36 investments since launching in 2020, including lithium-ion battery maker Amprius, which went public via a special purpose acquisition company last September, and Novoloop, which recycles plastic waste into new materials and chemical products. 

Prithvi is raising its second climate fund with a target of $50 million to lead pre-seed and seed stage equity rounds.

  • Gender lens. A third of Prithvi’s portfolio are women-led ventures, which otherwise have access to less than 2% of all venture capital. The company says it wants to nearly double the proportion of female founders it backs with its second fund. Contact Kunal Sethvi for more information.

Trend Real Estate Fund

Chicago Trend launched in 2016 with a mission to strengthen majority Black neighborhoods and support wealth creation for Black businesses, individuals and families in Chicago. The firm’s strategy is to acquire and revitalize shopping centers in majority-Black neighborhoods. Chicago Trend is raising a planned $50 million fund to expand its investment activities nationally. It has closed on more than $10 million with backing from the MacArthur, McKnight, Pritzker Traubert, Kresge and Surdna foundations.

  • Economic inclusion. Trend takes equity stakes in shopping centers valued at $2 million to $25 million. The Black-led firm promotes community ownership by co-investing with local community investment vehicles, or CIVs, which allow residents to pool funds to purchase and own neighborhood real estate assets. It also contracts with Black-owned service providers and leases space to Black-owned tenants.
  • Climate justice. “Lower-income and Black neighborhoods are disproportionately affected by negative climate impacts, such as heat waves, air pollution and flooding,” the firm says. It sees its shopping centers as an opportunity to improve community climate resilience by installing solar panels and greenery on rooftops, investing in energy efficient heating and cooling systems, planting pocket parks, and adding EV charging stations to its parking lots. Contact Lyneir Richardson to learn more about the fund.

Ultra Capital Energy Transition Fund

Private equity firm Ultra Capital is raising its third energy transition and sustainable infrastructure fund to support early-growth companies whose businesses are often too capital intensive for venture funds but not big enough for billion-dollar sustainability PE funds. The Philadelphia-based firm seeks to raise $150 million to $250 million to cut checks of $3 million to $25 million. It reached a $30 million first close in May. 

  • Track record. Ultra Capital made six investments with its second fund and notched two exits. Exits and follow-on rounds for Ultra’s portfolio companies often come from large climate impact funds from KKR, Carlyle and other private equity players. From its third fund, it has backed Miami-based On.Energy, a battery storage system developer. Ultra makes Series A investments and acquires operating power plants. Contact Tom Ferraro for more information.

Unitus Capital Impower Fund

Unitus Capital launched its Impower fund to address an early growth-stage capital gap in two of India’s hottest tech sectors: inclusive fintech and climate tech. UC Impower will double-down on sectors that have scored the greatest returns from Unitus/ 53 portfolio exits. 

UC Impower has a $50 million target for investing in Series A and B rounds. It will track impact using IRIS+ metrics. The firm says it has secured more than half of its target amount from family offices and high net-worth individuals in India, Europe and the US.

  • Fund team. UC Impower is led by Unitus co-founder Eric Savage, Narayan Ramachandran, ex- of L Catterton, RBL, and Morgan Stanley, Mona Kachhwaha, formerly of Caspian Impact and Citi, and Richa Natarajan, ex- of Deloitte and EY. Contact Natarajan to learn more about the India-domiciled Impower fund.