The Week in impact investing: Altered states

The team at

ImpactAlpha

TGIF, Agents of Impact! We’re taking a break Monday for the US holiday. The Brief will be back in your inbox on Tuesday.

In today’s Brief:

  • Altered states of impact investing
  • Chart: Tripling renewables by 2030
  • Agent of Impact: Henry Elkus of Helena
  • Dealflow spotlight: European impact funds

👋 Next Week’s Call: Compensating impact fund managers for… impact. Join Aunnie Patton Power of The Impact, Uli Grabenwarter of European Investment Fund, Gilberto Ribeiro of Vox Capital, Santiago Alvarez of ALIVE Ventures, Bjoern Struewer of Roots of Impact and other Agents of Impact, Wednesday, Jan. 17 at 10am PT / 1pm ET / 6pm London. RSVP today

🗣 Set and setting. Imagine a world with “net zero trauma” for veterans, a race to create quality jobs, and an abundance of renewable energy. You’re not tripping – just reading your ImpactAlpha Brief every morning. This week, David Bank reported on the $100 million-plus financing round for Lykos Therapeutics, a signal of the mushrooming investor interest in the potential of psychedelic therapies to cure, not just manage, post-traumatic stress and other mental health disorders. Below, Amy Cortese spotlights how the COP28 goal of tripling renewable energy capacity by 2030 is within reach. And Tesla, under pressure from the United Auto Workers, this week raised wages for factory workers. Unions are expected to push for quality jobs; I was more surprised to find in my reporting that sometimes-vilified private equity shops, like Blackstone, KKR and Bain, increasingly see investments in workers as a way to win deals, unlock value and outperform in a crowded marketplace.

Markets like what they see. “Institutional and individual investors observing global challenges increasingly turn to impact investing for sustainable long-term returns and solutions for future generations,” writes the GIIN’s Amit Bouri in his 2024 lookahead. Our roundup of predictions from the field highlighted the historic opportunity to coordinate capital for communities (h/t Bruce Katz and Bryan Fike); the need to prioritize racial and gender equity in AI-driven healthcare (Daryn Dodson); and the push to turn climate innovation into real-world deployment (Kim Zou and Tim Weiss). “My bet is that impact investing will just become mainstream investing, because the world’s problems are so acute that capitalism just has to solve them,” says Helena’s Henry Elkus, this week’s Agent of Impact (below).

Lofty goals need real world funding mechanisms – and aligned incentives. On this month’s Liist of managers actively raising funds, Jessica Pothering highlights scrappy fund managers like EchoVC, which is raising early stage capital for climate tech ventures led by African entrepreneurs. Roodgally Senatus covers Rethink Impact’s investment in Parallel Learning’s $20 million round to provide teletherapy to students with special needs. On next week’s Agents of Impact Call, The ImPact’s Aunnie Patton Power will dissect how some impact fund managers are linking their compensation to… impact (catch up on the research here and here). At the frontiers of impact, like the frontiers of consciousness, mindset is as important as the setting we’re in. – Dennis Price 

The Week’s Chart

Tripling renewables by 2030. Oops, they did it again. The International Energy Agency revised upward its perennially conservative five-year forecast for renewable energy, this time by 33%, or 728 gigawatts, above last year’s projections. Government policies, improved economics and consumer demand for lower-cost alternatives are driving the uptick. The rosier outlook comes on top of a 50% increase in global annual renewable capacity in 2023, the fastest growth rate in two decades. The gains were driven by China, which added as much solar photovoltaic capacity last year as the entire world did the year before. 

  • Deadline push. The COP28 goal of tripling renewable energy capacity to 11,000 gigawatts by 2030 is within reach. Existing policies and market conditions are set to expand global capacity 2.5x, says the IEA. To get the rest of the way there, and achieve the IEA’s Net Zero scenario, countries must invest in grid infrastructure, ease permitting, improve policies, and keep their economies on track. The biggest challenge is financing a rapid scale up of renewables in emerging markets, says the IEA’s Fatih Birol. “Success in meeting the tripling goal will hinge on this.” 

The Week’s Agent

Henry Elkus, Helena: Harnessing collective intelligence. As a sophomore at Yale, Henry Elkus scored a meeting with Ray Chambers, the private equity investor and global health philanthropist. Elkus wanted to drop out of school and solve the world’s big problems. The right people around the table can not only identify the problems, but the solutions, he explained. As the story goes, instead of sending him back to his dorm room, Chambers wrote him a check. Elkus and his partner Sam Feinburg returned to report on their not-for-profit activities. “I was surprised that there was progress, but there was,” says Suprotik Basu, an advisor to Chambers. Dubbed Helena, they had helped pull off America in One Room, which gathered a representative sample of voters in Dallas for three days of deliberative dialogue to show how opinions could converge on even the most divisive issues. Another project efficiently routed masks, gloves and diagnostics to hospitals at the height of the Covid pandemic. A third developed and passed legislation in California to secure electricity grids. 

Helena’s collective intelligence consists of hundreds of high-powered “members.” “We sit down with these people and say, ‘Tell me exactly what you want to do in your life and your career in the next five or 10 years years?’” Elkus told ImpactAlpha. “‘And tell me exactly what you don’t have access to that you need to do it.’” Financial agreements are made only when projects get concrete. “The core thesis of Helena is that development of complex technology is already outpacing the development of the human race to understand, regulate and do something about it,” says Elkus, now 28 years old. “That started with the Manhattan Project – but now we’re doing like 20 Manhattan projects.”

When it became clear that philanthropic capital was not sufficient to bring solutions to scale, Chambers brought in Alan Schwartz of Guggenheim Partners, who helped Elkus and Feinburg capitalize a partnership that did a series of club deals and, after about 18 months, raised a nonprofit fund. Basu joined Helena to help manage the investments. Helena has invested in energy storage company Energy Vault, the MIT fusion spinoff Commonwealth Fusion, and Twin Health, which is using AI to reverse diabetes and other chronic diseases. Helena is working with the Rockefeller Foundation to develop safeguards against bioterrorism at the intersection of artificial intelligence and bioengineering. Last week, Helena led the $100 million-plus round for Lykos Therapeutics, which has submitted a new drug application to the US Food and Drug Administration for MDMA-assisted therapy for post-traumatic stress disorder (see, “Net Zero Trauma”).

“I think that the sexiest place to work is in solving societal problems. But for some reason, it’s the least sexy brand in the world,” Elkus says. He wants Helena to be part of the rebranding. “My bet is that impact investing will just become mainstream investing because the world’s problems are so acute that capitalism has to solve them… We started Helena when a lot of these ideas were anathema. I think the world has unfortunately moved in a direction where now somebody will look at our model and go, ‘Oh, that makes sense.’”

The Week’s Dealflow

Deal spotlight: European impact investing funds. Cambridge-based Carbon13, reached a first close for its targeted €30 million ($33 million) fund to support startups in its Berlin-based accelerator and its goal of abating 1% of global emissions. Carbon13 is among 50 impact funds in Europe seeking to deploy over $8 billion from investors, counted by Impact Shakers, a European impact incubator, accelerator and fund manager. Most are climate-focused, but “societal challenges are equally urgent and important,” said Impact Shakers Yonca Braeckman. Impact Shakers itself is raising a $20 million early-stage venture to invest in impact startups in Europe and the UK.

  • Inclusive VC. In Iceland, women-led Crowberry Capital closed a €90 million fund to back emerging tech ventures with diverse founders. In Switzerland, Black women-led Bootstrap Europe closed a €130 million venture debt fund to invest in software and hardware solutions. No Label Ventures in the UK raised half of its $15 million target to back immigrant founders. And Black Seed Ventures, a UK-based fund led by Black fund managers, is seeking £10 million to invest in Black British founders.
  • Fund launches. Ireland’s Resolve Ventures this week launched a €30m fund targeted at Irish ventures tackling climate change. Eurazeo, based in Paris, is seeking €1 billion to invest in decarbonization, the circular economy, biodiversity and energy efficiency (see, “European and Canadian climate tech fund managers buck the VC downturn”).
  • Keep reading.

Catalytic grants. The Patrick J. McGovern Foundation awarded $66.4 million in grants to 148 organizations demonstrating AI’s potential for positive impact… The Tipping Point Fund on Impact Investing awarded $1.2 million for projects aiming to advance data, metrics and measurement in ESG and impact investing.

Climate finance. Renew Capital backed Octavia Carbon for direct air capture in Kenya… The Energy Department’s Loan Programs Office greenlighted a $189 million conditional loan to LongPath Technologies to build a methane emissions monitoring network… Tokyo-based Mitsui OSK Lines launched MOL Switch to invest $100 million in decarbonization tech startups in the US… New Forests raised $300 million for its Australia and New Zealand-focused sustainable forestry and landscapes fund.

EVs and batteries. Rwanda’s electric motorcycle maker Ampersand raised $19.5 million for fleet expansion… Seattle’s Recurrent raised $16 million to track the health and performance of used electric vehicle batteries… Silicon-graphite battery cell manufacturer Rincell Corp. secured $1.2 million in seed funding… Swap Energy, which manages a battery swapping network for electric two-wheeler vehicles in Indonesia, clinched $22 million.

Fund news. Seedstars Africa Ventures secured $30 million from EIB Global to invest in digital tech solutions for education, healthcare, utilities and other basic needs in Africa.

Green infrastructure. African investors backed Africa50 to accelerate sustainable infrastructure… The Robert Wood Johnson Foundation committed $1 million to test water infrastructure financing models through green banks.  

Inclusive economy. A $20 million investment will help Kazakhstan’s Solva transition to a licensed SME-focused bank… Sun King secured $7 million from Lendable to finance pay-as-you-go solar in Africa.

Investing in health. Health In Her HUE clinched $3 million from Johnson & Johnson Impact Ventures and other investors… Chicago-based WellBe Senior Medical scored an investment from CVS Health Ventures to provide at-home care for seniors.

Mergers and acquisitions. Armillaria acquired NeedsList to improve community crisis management… Bridges Fund Management sold its stake in UK energy retrofitter AgilityEco… Impax Asset Management is acquiring the assets of Absalon Corporate Credit.

The Week’s Talent

Erika Karp departed Pathstone to join the Aspen Institute as executive director of its Finance Leaders Fellowship program… US SIF hired Jun Han, former consultant at the World Bank, as research senior manager… Amber Banks-Bond, previously with Davos Inc., became the first female president of the African American Alliance of CDFI CEOs. Lenwood Long Sr. will continue as CEO… Tanja Kramer, formerly of Slingshot Ventures, joined ABN AMRO as head of its sustainable impact fund.

Nataša Goronja, formerly with the Miller Center for Social Entrepreneurship, moved to Accion’s Center for Financial Inclusion as managing director… Parina Parikh, previously with San Diego Workforce Partnership, joined Jobs for the Future as workforce and regional economies associate vice president… Blume Equity brought Rens Mathot, formerly with Rabo Investments, onto its investment team… Yves Frey, previously with SUSI Partners, joined Una Terra as a founding partner and executive board member.

The Global Impact Investing Network promoted Sapna Shah, formerly the GIIN’s chief program and operating officer, to the new post of president. Amit Bouri will continue as chief executive officer… Quantified Ventures promoted Alana Podolsky to associate director… Milken Institute promoted Troy Duffie to financial markets director… Impact Capital Managers promoted Diane Kulju to director of impact measurement, management and research… Bridge Investment Group promoted Lindsay Clark to sustainability vice president.

The Week’s Jobs

US Jobs

In California, Kataly Foundation is hiring a managing director of programs in the San Francisco Bay Area, and the Nonprofit Finance Fund seeks an underwriting manager. 

NDN Collective has openings for a director of institutional philanthropy, a program officer and other positions in Rapid City, SD… Global Endowment Management has an opening for an impact investments director in Charlotte… The GIIN is recruiting an associate for its global climate solutions initiative in New York… Prime Coalition seeks a partnerships coordinator in Boston… HCA Healthcare is recruiting a sustainability analyst in Nashville. 

Global locations

In London, The Earthshot Prize is on the hunt for a chief financial officer; Global Innovation Fund is hiring a donor relations advisor; and Blume Equity is looking for an investment analyst. 

PlusValue is hiring a senior associate of ESG and impact investing in Milan… Boosting Opportunities is on the hunt for an impact investing associate in Mexico… Queen University’s Institute for Sustainable Finance is recruiting a Canada-based managing director. 

Remote jobs

Makeway seeks an impact investment analyst… Project Equity is recruiting a manager of policy and impact. 

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That’s a wrap. Have a wonderful weekend. 

– Jan. 12, 2023