TGIF, Agents of Impact!
Impact Briefing. On this week’s podcast, host Monique Aiken, Erika Seth-Davies of The Racial Equity Asset Lab, and ImpactAlpha’s David Bank talk about the American Rescue Plan and… a bottom-up reconstruction. Plus, the headlines. Listen in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 7
1. Temasek’s leapfrog. The Singapore state-backed investment firm committed $500 million to become part-owner in LeapFrog Investments and anchor its future funds. LeapFrog, the pioneering emerging markets impact private equity firm, launched in 2007 to invest in companies delivering financial services (and later healthcare) for the world’s next four billion consumers. The commitment pushes LeapFrog’s assets under management past $2 billion. LeapFrog’s Andy Kuper called the investment a “a trajectory-changing moment” that “marks a new era of scale and success for the global impact investment industry.” Dig in.
2. Reconstruction economics. The American Rescue Plan’s narrative of a bottom-up recovery resonates with a core thesis of impact finance: putting more wealth and income into the hands of lower-income people is good business. The $1.9 trillion package signed by President Joe Biden directs payments, subsidies and tax credits that disproportionately benefit the poor. Bottom-up strategies for shared prosperity are coalescing into an investment thesis for private investors as well. Check it out.
3. Revenue-based financing for founders of color. Rather than produce a few tech unicorns, Kim Folsom of Founders First wants to help create hundreds, or thousands, of diverse-led operating businesses each valued in the millions or tens of millions. The firm’s revenue-based financing provides growth capital for solid, service-based businesses that create jobs in underserved communities and wealth for diverse founders. “Layer on the impact angle, and we think that there’s a lot of opportunity here to demonstrate this and make this a full fledged, scalable institutional asset class,” said Rockefeller Foundation’s Thomas Belazis. Onward.
4. The Reconstruction: Rodney Foxworth on reparative investing (podcast). “For me, it always starts with who has the power? How can that power get disrupted?” Foxworth tells host Monique Aiken on The Reconstruction, the new podcast series from ImpactAlpha. Foxworth, CEO of Oakland-based Common Future, is raising a “character-based lending fund” to offer loans averaging $30,000 without credit checks or collateral. A separate Community Investment Fund will prove out “models for how reparative and non-extractive investments can be accomplished.” Tune in.
5. Financial innovations for a sustainable recovery. The half-dozen new ideas selected by the Global Innovation Lab for Climate Finance aim to “enable a true transition as the world recovers from the pandemic,” says the Lab’s Barbara Buchner. Case in point: Peace Renewable Energy Credits, or P-RECs, from Energy Peace Partners could bring investments to 27 countries in Africa, the Middle East and South Asia that face the triple threats of climate vulnerability, energy poverty and conflict. The Lab has helped mobilize $2.4 billion for 49 instruments since 2014. Keep reading.
6. Climate, diversity and racial justice accountability tools. The Berkeley, Calif.-based shareholder advocacy group As You Sow issued a scorecard assessing how corporations have fulfilled – or not – the racial-justice pledges they made in the aftermath of last year’s killing of George Floyd. Leaders: Alphabet, Intel, BlackRock, Walmart and clothing maker PVH. Laggards: Biogen, Domino’s, home builder D.R. Horton, Paycom and Verisign. Other tools: CDP’s assessment of the greenhouse gas disclosures of 20,000 global funds, and a dashboard from Deloitte around VC progress on diversity. Dive in.
7. Trusted digital media stands out. The push: government and oligarch-control of media is pushing down trust in media around the world. The pull: the rise of subscriptions, memberships and audience willingness to pay for digital journalism. Media Development Investment Fund has fully deployed its $12.9 million private equity fund in nearly a dozen media outfits in India, Brazil, Indonesia and other countries hostile to a free press. “Those that build businesses around the mission of providing reliable, quality, usable information – that’s a very attractive business model,” MDIF’s Peter Whitehead told ImpactAlpha. More.
The Week’s Agent of Impact
Brian Deese, National Economic Council. At 31, Deese helped plan and execute then-President Obama’s auto industry bailout. As the White House’s top climate official a few years later, he helped broker the Paris climate accord. Now as President Biden’s top economic advisor, Deese helped craft the American Rescue Plan – an historic $1.9 trillion package of bottom-up economic assistance aimed at ending the pandemic and rescuing the U.S. economy. Between his government roles, Deese headed sustainable investing at BlackRock. Deese is more policy wonk than investor, more negotiator than ideologue, and more insider than outsider. “When we look at economic crises, it is more often policy makers do too little than too much,” Deese told Bloomberg. Underinvestment, he says, “becomes a persistent drag on growth.” Deese took to Twitter to highlight hidden components of the rescue bill: tax cuts for essential workers, investments in childcare, provisions to cut homelessness, compensation for school meals, risk capital for small businesses and historic investments in Native communities.
Deese will be consequential as the Biden administration looks beyond COVID to climate and infrastructure. Critics knock his ties to Wall Street, but Deese understands that investment firms face a reckoning with climate and other sustainability issues. Decarbonization is the new global race among companies, as well as countries, he told Morning Brew’s Kinsey Grant in November (while still at BlackRock). Government action to create incentives and rules of the road, Deese says, will define “the speed and the trajectory of the transition to a low-carbon economy,” and its economic impacts. “Climate change itself is extraordinarily regressive,” with the most negative impact on people with the fewest resources, he says. “You have to make sure you are mitigating that and not creating or exacerbating other inequalities.”
The Week’s Dealflow
Frontier finance. Nigeria’s Flutterwave passes $1 billion valuation with $170 million round… Toyota Tsusho Corporation backs Côte d’Ivoire-based fintech Moja Rise to facilitate digital payments in West Africa… Omidyar Network India invests in Mumbai-based insurance tech venture Riskcovry’s $5 million round… Tunisia’s ATL raises $12 million from Sanad Fund to help the country’s pandemic-impacted small businesses… Microtraction backs African equity crowdfunding platform Raise.
The Reconstruction. Goldman Sachs commits to investing $10 billion in Black women… Black Tech Nation Ventures aims to build an inclusive tech ecosystem in Pittsburgh… First Boulevard snags $5 million in seed funding to build a digital bank for Black Americans…Richelieu Dennis’s New Voices Fund and Trident commit $5 million to immigrant-run Cornbread.. Souls Grown Deep Foundation backs Paskho to create quality jobs for quilters in Alabama.
Inclusive economy. Canada’s Raven Indigenous Capital raises $25 million to bridge gaps for Indigenous founders… Kinara Capital secures 520 million rupees ($7.1 million) from IIX via its Women’s Livelihood Bond series… CDC Group invests $20 million in Indian logistics platform Ecom Express to create 8,000 jobs, mainly for women… Venture capital firm LongJump launches to back Latinx and other under-represented founders in Chicago.
Low-carbon transition. Euler Motors scores $4.1 million to accelerate the transition to electric vehicles in India… Israeli cleantech venture H2Pro raises $22 million from Breakthrough Energy Ventures and IN Venture… Nuru raises $1.2 million to develop solar mini-grids in the Democratic Republic of the Congo… SunFunder reaches $70 million close for Solar Energy Transformation fund.
Education and skills. XPRIZE identifies 10 rising startups solving workforce challenges… CEI Ventures closes its Good Jobs Fund, raising nearly $15 million… Education fintech venture FutureFuel secures $10 million in a UBS-led round to help student borrowers repay debt.
The Week’s Talent
Meena Clark is promoted to principal at Obvious Ventures… Andrew Steer, former head of the World Resource Institute, joins the Bezos Earth Fund as president and CEO…Former Massachusetts Gov. Deval Patrick, who founded Bain Capital’s Double Impact Fund, and Lauren Smith of the CDC Foundation join the board of Social Finance.
Phil Giudice joins the Biden-Harris administration as special assistant to the president for climate policy, and steps down from the board of Prime Coalition… BlocPower’s Donnel Baird and Future Earth’s Stephanie Shepherd join the board of directors in Al Gore’s Climate Reality Project… Andy Moniz, ex- of Putnam Investments, joins Acadian Asset Management as director of responsible investing.
The Week’s Jobs
Emerson Collective is recruiting a portfolio support analyst in Palo Alto, Calif… Cartica Management is recruiting an ESG engagement manager in the Washington-Baltimore area… Global Partnerships is looking for a research and impact officer in Nairobi… Lightship Capital is hiring a program manager in Tulsa, Okla… LOCUS Impact Investing seeks a technical consultant… Morgan Stanley’s Global Sustainable Finance group seeks a vice president/climate change specialist in New York… Moderna is looking for a vice president/senior director of ESG in Cambridge, Mass.
Gary Community Investments is recruiting a director for its new Fund for African American Wealth in Denver… Impact Experience is hiring a head of partnerships in San Francisco… Finergreen is hiring a financial associate in São Paulo… BlackRock is hiring a director for its private market impact investor team in New York… BTG Pactual Timberland Investment Group seeks a senior associate/associate director in Seattle… B Lab is recruiting a senior director of community (location flexible).
Food waste nonprofit ReFED has openings for a capital, innovation and engagement specialist and a director in the U.S. or Canada… The Greater Milwaukee Foundation is hiring an impact investing manager… Illumen Capital is looking for an operations associate in the San Francisco Bay area… Accion is looking for an editorial director in the Washington-Baltimore area… 1863 Ventures is recruiting a spring cohort for its Pipeline Program.
That’s a wrap. Have a wonderful weekend.
– Mar. 12, 2020