Greetings, ImpactAlpha readers!
#Featured: ImpactAlpha Original
Doodhwala cuts out middlemen to boost incomes of India’s small dairy producers. Every morning in India, local milkmen deliver fresh milk to millions of household doorways. The predictable morning routine across the country provides a measure of financial security to India’s tens of millions of tiny dairy farmers. Delivery service Doodhwala is using that morning routine to help those farmers sell their milk at a better price. Bangalore-based Doodhwala buys small batches of milk each day directly from farms near India’s sprawling cities and makes household deliveries itself. The arrangement offers farmers the security of a reliable and fair buyer and bypasses the chain of middlemen charging for transport and other services.
“Farmers get paid better and have predictable demand,” Omnivore Capital’s Mark Kahn told ImpactAlpha. The Mumbai-based impact investing firm recently invested $2.2 million in Doodhwala. “The model makes farm businesses viable in a way that they weren’t before, and our impact mission of helping farmers make more money is achieved this way.” Doodhwala boosts its own revenues by offering grocery delivery along with milk, a novelty for a population used to buying fresh vegetables daily from street vendors and other goods from small corner shops. Doodhwala is one of many delivery startups in India promising convenience to the country’s swelling consumer class. “It’s the right model for the Indian consumer,” Kahn says, “and it’s an exciting opportunity to link rural farms to consumers in a way that is mutually beneficial.”
Read “Doodhwala cuts out middlemen to boost incomes of India’s small dairy producers,” by Jessica Pothering, on ImpactAlpha.
#Dealflow: Follow the Money
Tree-free pulp mill secures $184 million in financing. Columbia Pulp has raised capital to finance a 290,000-square-foot mill to convert straw and other agricultural waste into paper and other products. The mill is expected to prevent 18,000 tons of greenhouse gases and particulate matter emissions annually, and create more than 80 jobs in Washington state’s rural Columbia County, which lost jobs when a canning factory shut down in 2005. The next-generation pulp mill could be “a transformative regional and national supplier of sustainable, tree-free pulp and unique co-products for years to come,” Columbia Pulp’s Michele McCarthy said in a statement. The Washington Economic Development Finance Authority provided $133.6 million in debt while CEI Capital Management arranged $20 million in tax-credit financing. Wells Fargo Community Investment Holdings and CP Leverage Lender also backed the project.
Gramophone raises $1 million to provide advisory services and products to farmers. Many of India’s farmers have to travel long distances to get the help and products they need, and turn to agricultural suppliers for advice, which presents an inherent conflict of interest for companies selling supplies. Gramophone seeks to help farmers by building a mobile marketplace of farming inputs. The startup, based in Indore, north of Mumbai, plans to use imaging, data analysis, advisory services and input sales to help India’s small farmers boost yields. Info Edge, a publicly-listed investor in early-stage Internet companies, invested in the pre-Series A capital. While it doesn’t specifically target impact companies, Info Edge recognizes rural India as a place where technology can have a significant impact. Gramophone launched in 2016 and is looking to reach one million farmers within 12 months, YourStoryreports.
#Podcast: Returns on Investment
Demystifying impact investing for newcomers — and the rest of us. There’s a lot of confusion around the term “impact investing.” A recent panel discussion in New York tried to clear it up. The fintech company Liquidnet hosted the panel, “Demystifying Impact Investing,” at its New York offices, in collaboration with the Tristate Area Africa Funders Network. Brian Trelstad of Bridges Fund Management set the stage by saying some of the confusion stems from impact investing’s twin roots in philanthropy and responsible investing. “It’s very different from grantmaking, because with grantmaking there’s no expectation of return of capital, at all,” Trelstad said. “The harder definition is, how is it different from a traditional private equity investment, where jobs are created and there are all sorts of impact? That’s where the ambiguity lives.” Trelstad was joined on the panel by Georgia Levenson Keohane of the Pershing Square Foundation and Liz Luckett of The Social Entrepreneurs Fund. The panel was moderated by ImpactAlpha’s David Bank. Listen to the podcast, “Demystifying impact investing.” And subscribe to all of ImpactAlpha’s Returns on Investments podcasts on iTunes, Stitcher or wherever you listen.
#2030 Finance: Long Termism
New financing facilities blend capital to meet the the 2030 Global Goals.As we say at ImpactAlpha: to get to the trillions needed to bridge the gap in funding for the Sustainable Development Goals, you first need to get to the billions. Early efforts to do just that are showing promise. A tally last year put total funds mobilized by 187 blended finance deals since the early 1980s at $51 billion. New innovative finance schemes are also notching impressive tallies. Last month, the Tropical Landscapes Financing Facility closed $95 million from institutional investors to finance the sustainable production of rubber in Indonesia. The facility was one of 15 blended finance vehiclesdesigned with the help of Convergence, the Toronto-based project-matchmaking platform, which has provided $5 million in design grants. Three of the projects have now raised a total of $116 million. Palladium raised $9 million for its Utkrisht impact bond, which will provide maternal and newborn health interventions for 600,000 women over three years in Rajasthan, India. Alina Vision raised $12 million in equity and grant funds to build a network of 60 affordable eye care hospitals. Other efforts, including the Climate Finance Lab, Initiative 20×20 and the Rockefeller Foundation’s Zero Gap portfolio also are helping move innovative financing vehicles from pilot to scale.
Read, “Mobilizing blended finance investments for the 2030 Global Goals,” by Dennis Price on ImpactAlpha.
Thank you for reading. Onward! Please send news and comments to [email protected]