TGIF, Agents of Impact!
Around the block. Donnel Baird of Brooklyn-based BlocPower is bringing renewable, reliable power to the block, and this week raised $63 million in debt and equity (see, Agent of Impact, below). Seeing few tech jobs in California’s San Joaquin Valley, Bitwise’s Jake Soberal and Irma Olguin Jr. created more than a few jobs of their own. This week they raised $50 million to take their model for inclusive tech ecosystems national (No. 2). Residents in Philadelphia, Atlanta, Tulsa and other cities are using neighborhood trusts to acquire community real estate and take on absentee landlords, extractive businesses and displacement (No. 1). The key to delivering on the potential of Opportunity Zones is, yes, local roots and community engagement (No. 4). The Reconstruction that is underway is being led by those most impacted by inequitable systems.
‘Block-led’ solutions are poised to scale, with larger deals and larger pools of capital. Surdna Foundation is among the philanthropies boosting their grantmaking and tapping their endowments to move more capital to leaders and communities of color (No. 3). ImpactAssets’ annual list showcases impact investors’ increasingly diverse options, from billion-dollar funds to first-time managers (No. 6). Hundreds of Agents of Impact working at the intersection of gender lens investing and climate action turned out for this week’s Call No. 26 (we’ll have a roundup next week). In Nigeria, India and other emerging markets, the accelerating digitization of small and informal businesses is among tech’s biggest opportunities (No. 5). At ImpactAlpha, we’re following the money… around the world and around the block. – Dennis Price
Impact Briefing. On this week’s podcast, host Monique Aiken chats with ImpactAlpha’s Roodgally Senatus about Bitwise Industries’ big raise (see No. 2) and BlocPower’s Donnel Baird, this week’s Agent of Impact. Listen in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 6
1. Neighborhood trusts might be a game-changer. The trusts give residents and local businesses a say – and a stake – in the growth of their communities. From the Kensington Corridor Trust in Philadelphia, to Trust Neighborhoods in Tulsa and Kansas City, to The Guild in Atlanta, and California’s NICO and East Bay Permanent Real Estate Cooperative, communities are retaking control of commercial and residential real estate. Take the tour.
2. Bitwise cracks the code for inclusive tech ecosystems. California’s San Joaquin Valley is less than 200 miles from Silicon Valley, but until Bitwise started building, there were few tech jobs in cities like Fresno, Bakersfield and Merced. Bitwise has trained 5,000 locals for technology careers and converted rundown buildings into 450,000-square-feet of startup space. With a $50 million raise led by Kapor Capital, Bitwise is going to other under-estimated cities to “raise up a next-generation, representative tech workforce.” Dive in.
- Kapor dealflow. The Oakland-based venture firm also participated in Promise’s $20 million raise to help people pay essential bills and BlocPower’s $63 million financing to green U.S. buildings.
3. Surdna Foundation’s Don Chen rethinks risk (podcast). The billion-dollar Surdna Foundation approved a three-year boost in its grant payouts to meet converging emergencies. “We’re able to free up a lot more resources for our grantees and make sure they can weather these various storms,” says Chen on ImpactAlpha’s Agents of Impact podcast. With Ford Foundation’s Darren Walker, Chen leads a council of foundation presidents moving more assets to mission. Tune in.
4. ‘Year of action’ for Opportunity Zones? Nearly four years after capital-gains tax breaks were approved for Opportunity Zones, most of the nearly 8,000 low-income zones have yet to see a dime. It’s time to move beyond “proof of concept,” says Economic Innovation Group. How? Robust reporting, phasing out higher-income zones, feeder funds and tweaks to encourage investments in affordable housing and local capacity building. Share this.
5. Seed-stage bets on the digital disruption. Emerging market impact fundraising took a hit last year. But seed-stage investments were a rare bright spot, as investors see the pandemic accelerating trends in fintech, health tech and edtech, as well as the digitization of virtually every business. Digital disruptors flourished in India and Nigeria. By the numbers.
6. The ImpactAssets 50 and the emerging 41. The annual list of impact investment fund managers is now in its 10th year, so the repeat entries and billion-dollar babies will be familiar to many. New: a separate list of 41 newer and smaller fund managers, including outfits like Apis & Heritage Capital Partners, which supports transitions to employee ownership, and Open Road Alliance, which provides bridge loans to social entrepreneurs facing what they call “OMG moments.” Collect ‘em all.
The Week’s Agent of Impact
Donnel Baird, BlocPower. There was no heat in the building in Brooklyn’s Bedford-Stuyvesant neighborhood where Baird grew up, so he and his sister would turn on the oven to heat their apartment. “In low-income communities, there’s a waste of energy,” Baird told ImpactAlpha, “and there’s a waste of human potential.” Baird founded the climate tech startup with Morris Cox in 2014 to bring clean energy to low-income Americans. BlocPower helps utilities, government agencies and property owners retrofit city buildings in underserved communities and finances eco-friendly electric heating and cooling systems for small and mid-sized property owners at no up-front cost. The company has retrofitted more than 1,000 buildings in New York City, saving property owners up to 50% on energy costs. This week, BlocPower raised $8 million in equity and $55 million in debt, led by American Family Institute, AccelR8 and Goldman Sachs.
Baird is among a growing network of Black entrepreneurs, investors and operators who are using proximity to communities and their own lived experiences to build companies for an inclusive green economy. Impact investors didn’t immediately appreciate Baird’s block power. “At a certain point, we had to say, ‘Okay, maybe the impact investing thing isn’t for us. So we’re gonna go out to Silicon Valley, and now Wall Street, and we’re gonna raise our capital from there.’ So that’s what we did.” Kapor Capital’s Mitch Kapor helped Baird hone his pitch. Baird says he is recycling buildings, reducing greenhouse gases and creating green jobs for the sake of his son, wife, nieces and nephews. “I’m a tech entrepreneur that believes that the best way to protect my family from the damage of climate change is for the company to be successful.” – Roodgally Senatus
The Week’s Dealflow
Low-carbon transition. Resilient Infrastructure Group acquires renewable natural gas facility from Equilibrium Capital… Vestas Ventures backs Modvion to create wooden wind turbines… Volta Energy Technologies closes $72.6 million to fund battery tech… Ikea-backed foundation invests in fossil fuel-free equities and green steel… ChargeLab raises $4.3 million for EV infrastructure software… Patch raises $4.5 million to channel carbon-offset financing… Malta raises $50 million for thermal energy storage.
Financial inclusion. Pngme snags $3 million to expand financial services in Africa… Kinara Capital raises $10 million to support India’s small businesses… Borrowell raises $25 million and acquires affordable credit provider Refresh Financial… NBA star Russell Westbrook backs digital bank Varo Bank… Fintech venture EarnUp secures $25 million to support struggling homeowners… Lendable backs Amartha to finance Indonesia’s women-led businesses.
Fund news. Humankind Investments launches ‘social’ ETF… Eurazeo raises €80 million for Smart City fund… Singapore government creates Agri-Food Cluster Transformation Fund… South Africa-based loan fund launches to back impact ventures.
Enterprise tech. Indonesia’s RateS scores undisclosed investment to launch small businesses online.
The Week’s Talent
Brookfield Asset Management’s Mark Carney, former head of the Bank of England, joins the board of Stripe… Align Impact adds Patience Marime-Ball of Women of the World Endowment, Shu Dar Yao, ex- of RSF Social Finance, and Mamadou-Abou Sarr of V-Square Quantitative Management to its investment committee… Sophie Durham, ex- of Kosmos Energy, is named director of ESG and infrastructure investments at First Sentier Investors.
Trevor Neilson of WasteFuel, Rini Greenfield of Rethink Food, and Phillip Bayt of Ice Miller join the board of Novus Capital… Creation Investments names Emily Stella, ex- of Russell Investments, as head of investor relations and promotes Tyler Day to partner… Athena Ronquillo-Ballesteros, ex- of Growald Family Fund, joins the Climate Leadership Alliance as managing director of global climate strategies… OneTen’s Maurice Jones joins Ignite Social Impact as an advisor.
Kristen Eshak Weldon, ex- of Louis Dreyfus Company, joins Partners Capital as global head of ESG and impact investing… Greg Wasserman, ex- of Generation Investment Management, and Sean Petersen, ex- of AI Fund, join Wellington Management as climate-focused senior investors… Biju Mohandas, previously with International Finance Corp., joins LeapFrog Investments as a partner and global co-lead for healthcare… Graham Day steps down as chief financial officer of Sistema.bio to join Spring Activator as investment director.
The Week’s Jobs
BlackRock is hiring a director of its impact opportunities fund in New York and hiring an impact investing vice president for its fundamental equity division… Prime Coalition is recruiting a director of impact in Cambridge, Mass… Croatan Institute seeks a part-time or full-time analyst or associate… 17 Asset Management is hiring a data-science sustainable investing fellow… Envestnet is looking for an impact investing intern in Denver.
Capital for Climate has openings for a head of research integration and a head of climate funds research… Closed Loop Partners is recruiting a principal for Closed Loop Ventures Group in New York… In Washington D.C., Accion Venture Lab is recruiting a managing director, Opportunity Finance Network is hiring a senior investment officer, Village Capital is looking for a senior manager of innovations, and SEAF is looking for a communications manager.
The U.S. Impact Investing Alliance is hiring an operations assistant… Align Impact seeks a remote summer investment analyst… Also in New York, Acumen seeks an ESG insights manager in New York… ISF Advisors is looking for a strategy associate… Impact Finance Center is hiring six fellows, including an impact investing institute fellow.
That’s a wrap. Have a wonderful weekend.
– Feb. 26, 2021