TGIF, Agents of Impact!
Emotional responses this year have unfolded like the proverbial stages of grief, although there seem already to be way more than five. The latest comes with the fierce fires here in California. Friends have evacuated; the air is filled with smoke and ash. The outdoors is now also toxic, a symbol of all the challenges we face, and what we’ve all lost.
In that kind of mood, I’m grateful for the privilege of bringing you ImpactAlpha. To stay on top of the beat, we have to look out everyday for solutions, and leaders. We’re counter-programming less with optimism than with agency. This week, Agent of Impact Andrew Youn (see below) assembled catalytic lenders to bring One Acre’s bundle of services to millions of small farmers in East Africa (see No. 2). Other agents are bringing capital and solutions to Latin America (No. 3) and the Black Belt of Alabama (No. 1). Entrepreneurs are working through obstacles to sending cash in a pandemic (No. 7), financing agriculture deals in Africa (No. 6) and doing business in Navajo Nation (No. 4). More and more managers are at least trying to get the pillars of impact investing right (No. 8). This week’s Zoom-like Democratic convention was a rainbow of Agents, reminding us, as do you all, that cynicism and disengagement are emotional escapes we can’t afford.
In terms of stages, our household already was at ‘strange school year, high school edition.’ Teachers have made clear that keeping up is the only option. Agents of Impact, too, are accepting that there’s no alternative to doing the work.
–David Bank
Impact Briefing podcast. In this week’s episode, Brian Walsh grills Jessica Pothering on the recent spate of food and agri-tech investments. We hear from One Acre Fund’s Andrew Youn, this week’s Agent of Impact. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 8
1. Catalyzing COVID capital for Alabama’s Black Belt… The area’s cash-strapped rural towns are getting advances on federal relief to buy personal protective equipment and rally their response to COVID through an innovative collaboration between The Black Belt Community Foundation, Hope Credit Union and the Alabama Power Foundation. Go deeper.
2. …working capital for Africa’s farmers… One Acre Fund has spent a decade-and-a-half demonstrating that investing in small African farmers is a safe bet to reduce hunger and poverty. A half-dozen philanthropic investors led by MacArthur Foundation, is lending $20 million in ‘catalytic capital’ to bring in five times that amount for smallholder farmer finance. Dig in.
3. …and flexible capital for Latin America’s social ventures. Entrepreneurs in Peru and Colombia are weathering the pandemic to deliver essential services but struggling to access the capital they need to grow. Acumen LatAm Impact Ventures, or ALIVE, has raised $28 million to invest in them. MacArthur Foundation, as part of the Catalytic Capital Consortium, helped close the round. Onward.
- The Catalytic Capital Consortium is a sponsor of ImpactAlpha’s ongoing coverage of catalytic capital strategies.
4. Accelerating Navajo entrepreneurship. Lack of access to land, property and finance, and inadequate dispute resolution processes, makes doing business on the Navajo Nation in Arizona, New Mexico and Utah as difficult as in Zimbabwe or Central African Republic. Change Labs and Casual Design dug into the challenges and solutions needed to address them. Dive in.
5. Investing against the nuclear threat. The chances of nuclear conflict are low now, but rise in the longer term. Bonds that push nuclear weapons manufacturers to clean up pollution, or shareholder pressure supporting counter-proliferation financing from banks, are under-explored nuclear threat-reduction strategies, writes The Cross Capital Initiative’s David Epstein. React.
6. African agri-investing is a ripe opportunity. Agriculture accounts for 40% of Africa’s GDP and employs 70% of its workforce. But the sector’s advancement is stifled by lack of funding. In the past decade, 242 agriculture-related deals in Africa raised $616 million from private investors – a tiny fraction of global ag investing. Get the dirt.
7. Remittance fintechs meet the COVID moment. Emerging markets fintech startups launched in response to lagging, inefficient, or predatory financial systems. COVID’s income losses, border closures and economic disruption are speeding fintech adoption among Africa’s financially excluded, CrossBoundary’s Vicky Aadnesgaard, Claudia Masemola and Frederik Benzel write in a guest post. Check it out.
8. Three pillars of impact and integrity. The way to safeguard the integrity and impact performance of future investments is right at a fund’s formation, “where a clear market opportunity meets a great team and a receptive investor base (at least in theory),” Tideline’s Ben Thornley argues in a guest post. Hear him out.
The Week’s Agent of Impact
Andrew Youn, One Acre Fund. The goods and services needed to end global poverty are proven and well known, says the founder and executive director of One Acre Fund. “We just need to deliver them,” says Youn. In 15 years, Youn has built one of the world’s most effective organizations at delivering goods and services to Africa’s small farmers. One Acre’s 6,500-strong ‘delivery army’ distributes bundles of better seeds, fertilizer and other inputs on credit, along with training and market access. That helps more than a million farmers increase their productivity, feed their communities and earn more income. “We don’t need more genius types right now,” Youn said in a 2016 TED Talk. “The humble delivery guy is going to end global poverty in our lifetime.”
For years, Youn has called for a major expansion of private capital, alongside a continued flow of philanthropy, to scale up the proven interventions. This week’s announcement of a $20 million package of “catalytic capital” is a down payment. Youn and One Acre aim to leverage the flexible loans into $100 million to serve up to four million farmers in rural Africa. If farmer loans have long been considered financially risky, Youn has made equipping smallholders with the tools they need a safe bet on impact. Most of One Acre’s farmers are women. They’re physically strong, mentally tough and do whatever it takes to earn a better life for their children, he said on stage. Pointing to an image of a farmer behind him, he said, “If we’re going to put the future of humanity in one person’s hands, then I’m really glad it’s her.”
The Week’s Dealflow
Low-carbon future. Masdar agrees to acquire half of EDF Renewables’ North America portfolio… Electric commercial vehicle maker Xos Trucks hauls in $20 million… Electric microbus maker Canoo will go public on Nasdaq… Schneider Electric and Huck Capital partner on mini-grids for commercial building owners… Acumen exits Indian rooftop solar provider Orb Energy.
Agrifood investing. Impossible Foods raises $200 million to meet demand for plant-based meat… eFishery reels in financing to connect fish farmers to feed and tech… Luxelare raises crowdfunding to help Latin American farmers monitor fields… Lever VC reaches $23 million first close for alt-protein fund.
Returns on inclusion. Capital Impact Partners and CDC Small Business Finance team up to boost community financing… Startups tackle home-ownership, social benefits and media in DivInc social justice accelerator.
Education and jobs. Two Sigma’s impact fund aims to give workers a boost amid automation… Kenya’s WorkPay raises $2.1 million to offer HR tech to small businesses.
Frontier finance. Finnfund originates $10 million loan to First National Bank Ghana.
Responsible fintech. Fig Tech clinches $23 million to expand nonprofits’ lending capacity.
The Week’s Talent
Songbae Lee, ex- of Calvert Impact Capital, joins USAID to lead efforts to mobilize private capital for agricultural finance… Seema Lalloo joins Secha Capital… Kriss Deiglmeier, ex- of Tides Foundation, joins data-analysis tech company Splunk as chief impact officer.
The Week’s Jobs
Google is looking for a sustainability project manager for its global data centers… Propagate Ventures is hiring a project manager and other roles in Hudson, N.Y… Palladium Impact Capital is looking for a director for its Americas group… Borealis Philanthropy is recruiting a president… Draper Richards Kaplan Foundation seeks a chief financial officer in Menlo Park, Calif… Omidyar Network is hiring a senior vice president and head of programs in Silicon Valley or Washington, D.C. and a beneficial technology analyst in Redwood City, Calif.
California Southern Financial Development Corp. is hiring a loan portfolio coordinator in San Diego… The Employment Technology Fund is looking for a senior associate… Walton Enterprises seeks a senior investment analyst in Washington, D.C… OpenInvest is recruiting a key account manager in San Francisco… CapShift is hiring a client engagement director and a product manager… Stromness Management is looking for an operations manager.
Thank you for reading.
–Aug. 21, 2020
