ImpactAlpha, December 6 – It’s been a difficult year for run-of-the-mill tech funds seeking fresh powder. Fundraising for impact funds has been more resilient, as managers lean into urgent challenges and emerging opportunities. From climate tech to gender-lens vehicles, many funds are surpassing their fundraising targets.
This month’s Liist, in partnership with Realize Impact, features a few funds that are nearing their final close. California-based Better Ventures is winding down fundraising on its $60 million diversity-focused science and tech fund while women-led, Pakistan-focused I2I Ventures is closing its $15 million tech fund in January.
Others are just getting started. Gender-lens investor Deetken Impact is out with two new funds – a $100 million alternative finance fund and a $150 million sustainable energy fund, both of which invest in the Latin America and Caribbean regions.
Latin America features heavily on this month’s Liist. In addition to Deetken, Acumen LatinAm Impact Ventures, or ALIVE, is in the market, now with its second fund. The Colombia-based firm invests in tech-enabled growth-stage companies that are boosting livelihoods and reducing inequality in the region. Amazonia Impact Ventures, based in the U.K., invests in climate change mitigation and adaptation efforts in the Amazon rainforest that empower local Indigenous communities.
This month’s Liist also features Sangam VC, an early-stage climate tech fund in India, and New Way Homes, a California-based nonprofit that lends to community organizations and other developers of affordable housing and inclusive real estate projects that are improving racial equity.
- Better Ventures (global, diversity-focused science and tech fund; women co-led)
- I2I Ventures (women-led and -focused fund investing in Pakistan’s tech startups)
- Deetken Impact Alternative Finance IV and Sustainable Energy III (gender-lens funds focused on Latin America and the Caribbean)
- New Way Homes (California nonprofit that provides affordable loans for inclusive real estate developments)
- Acumen LatinAm Impact Ventures, or ALIVE (gender-lens fund that invests in education, livelihoods and daily essentials in Latin America)
- Amazonia Impact Ventures (fund that invests in climate solutions and Indigenous communities in the Amazon rainforest)
- Sangam Ventures (early-stage climate tech fund in India)
Disclaimer: The LiiST and this post are based on available information, sourced by ImpactAlpha and our partner on The Liist, Realize Impact. 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 ImpactAlpha.com shall constitute an offer to sell or the solicitation of an offer to buy securities.
Better Ventures launched in 2011 to help promising, mission-driven companies get over early fundraising hurdles. The Oakland-based venture firm’s three funds have invested in more than 50 science and tech companies tackling challenges from medical research in Africa, to remote work, to clean water access. Better Ventures is raising a $60 million fourth fund that will focus on three core themes: sustainable food, workforce resilience, and “electrification of everything.” The B Corp. has secured $50 million in commitments and is aiming for a final close in January.
- Returns on inclusion. Better Ventures cuts pre-seed and seed-stage checks of $500,000 to $1.5 million. A key pillar of Better Ventures’ investment strategy is backing diverse founders, who often face the steepest early fundraising hurdles. Nearly half of its portfolio companies have a female founder and 54% have a non-white founder. Investments from its fourth fund include Aja Labs, a Black women-founded sustainable materials company, and Cypris Materials, which makes sustainable inks, paints and dyes. Get in touch via Better Ventures’ website or LinkedIn.
I2I Ventures is addressing two big overlooked opportunities. The women-led and women-focused VC fund backs early-stage tech startups in the world’s fifth biggest country: Pakistan. “Pakistan is a frontier market, and in terms of deals, there’s commercial opportunity here that is still very undervalued compared to other markets in the region,” I2I Ventures Misbah Naqvi told ImpactAlpha (see, “In Pakistan, investing with a gender lens gives I2I Ventures an early-stage edge”). The firm has made 17 investments in 12 companies, including Abhi, a company that enables gig workers to access earned wages as they accrue. I2I backed the company’s $2 million seed round last year. Abhi raised a $17 million Series A round this year to expand to the U.A.E. and Bangladesh.
- Market opportunity. With the global downturn, investment activity in Pakistan has “slowed down, much like the rest of the world,” says I2I’s Kalsoom Lakhani. The firm has supported portfolio companies with resilience strategies. “They’ve put all their energy towards balancing growth with making their margins better,” Lakhani says. “Some have done some courageous pivots or launched new business verticals as a response to market conditions.” Others are getting a boost in the current market. E-moped company ezbike is helping logistics operators save on fuel costs by switching to electric vehicles.
- Open for business. I2I, a Delaware-domiciled fund, has raised $8.5 million toward a $15 million goal. Its first close was backed by Netherlands-based DGGF, Amaana Capital, Kleiner Perkins, Wamda Capital and others. The fund is closing at the end of January. Get in touch by email at [email protected]
Deetken Impact stands out in the gender-lens investment landscape as one of the few women-focused fund managers that has raised five funds (see…TK ) The Vancouver-based firm invests in businesses delivering sustainable energy and improving livelihoods in Latin America and the Caribbean. “Latin America and the Caribbean was one of the hardest-hit regions by the global pandemic,” the Deetken team says, “but we believe that many of its prevailing social and environmental challenges can be addressed through profitable, market-based solutions.” Two new funds from Deetken are open for investment: its fourth Alternative Finance fund and its third Sustainable Energy fund.
- Alt-finance. Last year, Deetken acquired a 40% stake in Mexico City-based Adobe Capital, a revenue-based financing impact investor. Its fourth Alternative Finance fund is a partnership between the two firms. The fund is looking to raise $100 million to make mezzanine investments in up to 24 companies offering impact solutions to education, healthcare, affordable housing, financial inclusion, the circular economy and responsible consumption. The firm makes “gender-smart tailored financing solutions as alternatives to traditional debt or equity,” including revenue-based financing and subordinated debt. Deetken’s three prior Alternative Finance funds have made 44 investments in 14 countries and notched 14 exits. Its third fund is the Ilu Women’s Empowerment Fund, in partnership with Pro Mujer (see, “Agent of Impact: Carmen Correa, Pro Mujer”).
- Open for business. Deetken Impact Alternative Finance IV is a 10-year, Ontario-domiciled fund with a traditional 2/20 fee structure. The minimum commitment is $1 million. Deetken also manages a sustainable energy-focused portfolio that offers mezzanine financing for renewable energy, energy efficiency and energy storage projects in the region. Its third Sustainable Energy fund, which also has a 2/20 structure, is targeting $150 million, including $30 million of catalytic first-loss capital. The minimum investment is $2 million.
New Way Homes is a nonprofit, California-based public benefit corporation that is addressing housing displacement and racial equity through real estate investments. The organization’s impact fund supports the development of affordable, workforce and supportive housing “so that people can live in the California communities in which they work,” according to New Mexico Angels’ Drew Tulchin, a New Way Homes investor. The organization is raising capital from individuals and other investors for its loan fund.
- Community engagement. New Way Homes partners with other nonprofits, including a number of Black churches, that own properties and development sites but lack access to affordable financing or public sources of funding. It is supporting at least eight projects in the Monterey Bay and San Francisco Bay areas, which include 350 affordable housing units. It extended a loan to a Black-led community church last year to develop 12 transitional housing units at the Genesis Worship Center in Oakland. “They have demonstrated faster, more cost-efficient and greater environmentally sustainable results than traditional affordable housing,” says Tulchin.
- Individuals and institutions. New Way Homes loan fund is open for investments starting at $10,000. The 10-year notes offer an annual interest rate of 4.25%. The organization has raised $6.5 million, which includes backing from the Religious Communities Investment Fund, Community Foundation Santa Cruz County, Bay Area LISC and other institutions. Roughly 175 individuals invested via New Way Homes’ Wefunder crowdfunding campaign. Contact Sibley Verbeck Simon for more information.
Acumen LatinAm Impact Ventures, or ALIVE, invests in tech-enabled growth-stage companies that are boosting livelihoods and reducing inequality in the region. The Colombia-based firm launched in 2018 with backing from Acumen. It raised $28 million for its first fund, which made seven investments in five countries and realized one partial exit, in edtech venture Crehana. “Despite a challenging environment, it has had attractive results both in terms of impact and financial performance,” ALIVE’s Sanitago Alvarez tells ImpactAlpha. ALIVE is now in the market with its second fund, which has a fundraising target of $80 million. Return investors include Acumen, the Dutch Good Growth Fund and several foundations. ALIVE expects to reach a first close in the first quarter of 2023.
- Gender lens. ALIVE is a founding member of the global gender-lens investment framework 2X Challenge, and its second fund is a 2X-registered fund. “Our first fund’s portfolio was 100% 2X compliant, not just the required 30%,” says Alvarez. The firm plans to uphold the strategy for its second fund. Themes will mirror its first: education and quality jobs; sustainable income opportunities; and critical products and services. The firm, which focuses on opportunities in Colombia and Peru, cuts equity and mezzanine checks of up to $2 million. ALIVE’s second fund is domiciled in Canada. Get in touch via ALIVE’s website.