TGIF, Agents of Impact!
🗣️ Counter-offensive. In his trenchant piece this week on solutions to homelessness in Los Angeles, Daniel Heimpel summoned the “arsenal of humanity” to respond to what is inarguably a humanitarian crisis on our streets. Military metaphors certainly are fraught, with a war in Europe and an epidemic of mass shootings in the U.S. But the secondary meaning of arsenal – “an array of resources available for a certain purpose” – feels apt at a moment when tools and strategies for positive impact are so ready to be deployed. In Africa, fintech lenders emphasizing productive uses are improving not only livelihoods, but repayment rates as well, as the Agents of Impact on this week’s Call attested (see the Call roundup, below). Investments designed to cut food waste are boosting food security while cutting carbon emissions (see Deal Spotlight). Impact investing “national advisory boards” in countries from the U.K., India, Japan, Ghana and elsewhere detail unmet needs – and rising investment activity.
This week we asked, “Can investors respond to the systemic risks gun violence poses to the American economy?” A “human rights impact assessment” at a gun maker like Sturm Ruger may only have limited effect; more significant is that institutional investors voted to approve the shareholder resolution over the objections of management, which warned the measure would destroy the company. The tools of microfinance can be improved by listening to borrowers, as 60 Decibels did in preparing its first Microfinance Index. Policy reforms, like enhanced climate-risk disclosure and truth-in-labeling for ESG funds, may only go so far, but can lay the groundwork for more far-reaching changes. “ESG must take into account the impact of a company’s actions, whether intended or not, on the world in which it lives,” argues Developing World Markets’ Brad Swanson. Agents of Impact are building the arsenal of humanity just when reinforcements are needed. – David Bank
✎ Sign up your team. A warm welcome to Agents of Impact at The Capital Group, NYL Investors, Impact Charitable, SmartJobs and the World Food Programme Accelerator, who are taking advantage of ImpactAlpha for Teams. Raise your team’s game and save with substantial discounts. We’ll onboard your colleagues with a customized welcome page.
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The Week’s Podcast
🎧 Impact Briefing. FullCycle’s Stephan Nicoleau deconstructs the climate conversation at the World Economic Forum’s recent Davos meeting with podcast host Monique Aiken, and points to some surprising opportunities for climate investors. Plus the headlines.
- Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
The Week’s Call
Call No. 43: How responsible fintech in Africa provides resilience in a downturn (video). Just as investment in financial inclusion in Africa took off, a market downturn threatens to slow progress. Or does it? “Contrary to what a lot of people think, I don’t think the downturn in the global markets is going to have such a profound impact on Africa,” Olu Oyinsan of early-stage tech investor Oui Capital in Nigeria said on this week’s Agents of Impact Call. “A lot of the investments that have gone into this space in the last few years have actually done very well.” More than half of the $7 billion invested in African startups in the past 18 months has gone to fintech ventures. As the global economy slows, what will change is the kinds of fintech ventures that get funded. “Unsecured consumer credit is a challenging model in times like this,” observed Amee Parbhoo of Accion Venture Lab. Startups supporting access to finance for productive uses, on the other hand, may prove more resilient. “The more resilient that companies can make their users, the more loyal those users will be,” said Scott Onder of Mercy Corps Ventures. “That’ll drive strong business fundamentals and more resilient companies over time.”
- Small business finance. Mercy Corps Ventures’ portfolio company Pivo, in Nigeria, provides supply-chain financing for Africa’s freight carriers based on contracts with corporations and large manufacturing companies. “Larger manufacturing brands are doing their best to stretch out payment terms so that they have enough working capital,” said founder Nkiru Amadi-Emina. “That has a trickle down effect on a lot of the small business vendors that are serving them.” Accion Venture Lab’s portfolio company Field Intelligence provides inventory forecasting as well as financing to mom and pop pharmacies in Africa. Such “embedded finance” is “transforming how all of us in this space are seeing financial services reach the customers that we care about,” said Parbhoo.
- Keep reading, “Call No. 43: How responsible fintech in Africa provides resilience in a downturn,” and watch the video replay.
The Week’s Dealflow
Deal spotlight: Climate-smart food. Minimizing food waste. Managing emissions of food brands and ingredients. Decarbonizing fertilizers and food processors. Climate change is spurring long overdue updates to our carbon-heavy food systems. Bogotá-based RobinFood this week raised $32 million to deploy artificial intelligence to predict demand and cook food to order in large cities in Colombia, Brazil and Mexico. To catalyze more private capital into food waste solutions, ReFED and Closed Loop Partners launched three investment vehicles to de-risk early ideas and fund research and development. Other climate-smart food deals on our radar:
- Planet FWD raised $10 million to track carbon emissions of consumer product brands in a round co-led by Acre Venture Partners and Congruent Ventures… GREE Energy raised $250,000 from Water Unite Impact to decarbonize food processors in emerging markets… U.K.-based Foodsteps raised €3.8 million ($4 million) to help food businesses track the environmental footprint of their ingredients… Switch Bioworks raised $4.3 million for sustainable nitrogen biofertilizer.
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Climate tech. The Office of Naval Research committed $32.5 million over five years to climate-tech nonprofit Elemental Excelerator… U.K.-based Converge snagged over £15 million in Series A funding, led by OGCI Climate Investments, to digitize and decarbonize construction materials and processes… Dutch impact investor Shift Invest raised €110 million to invest in sustainable mobility and logistics, food tech, agtech and other cleantech ventures.
Investing in health. Healthcare app Solv raised $45 million, including $3.4 million from a special purpose vehicle raised by 75 female investors (of whom 45 are women of color and 25 are first-time investors).
Net zero. Aavishkaar seeks to raise a $500 million carbon fund for India and South and Southeast Asia.
The Week’s Talent
Melissa Bradley of 1863 Ventures, Allie Burns of Village Capital, David Kenney of VertueLab, and Revolution’s Steve Case are among the experts named to the National Advisory Council on Innovation and Entrepreneurship by U.S. Commerce Secretary Gina Raimondo… Veris Residential promotes Karen Cusmano to senior vice president and head of sustainability and ESG.
Asoka Woehrmann, CEO of Deutsche Bank’s asset management subsidiary DWS Group, resigns after the firms’ offices were raided by German authorities over allegations of greenwashing… Kahini Shah, ex- of Gradient Ventures, joins Obvious Ventures as a principal… Cambria Allen Ratzlaff, ex- of UAW Retiree Medical Benefits Trust, joins JUST Capital as managing director and head of investor strategies.
The Week’s Jobs
TripleJump seeks an office manager in Amsterdam… Dutch pension fund PGGM is looking for an intern for its responsible investment team… Impact investor Norrsken VC is recruiting a senior and junior investor in Stockholm… McPherson Strategies seeks a remote social impact fellow.
Big Issue Invest in the U.K. is hiring a remote senior impact manager for investment… Stanford University is recruiting a director of its Center for Social Innovation… Omidyar Network is hiring a senior manager for external communications.
That’s a wrap. Have a wonderful weekend.
– Jun. 3, 2022