The Brief | January 14, 2022

The Week in Impact Investing: Bridges

ImpactAlpha
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ImpactAlpha

TGIF, Agents of Impact! 

ūüó£ The dialectics of impact. Bursting the bubbles that often float around ESG and impact investing is an easy and not unworthy pastime. The reaction to our post (based on a popular LinkedIn thread started by The Predistribution Initiative‚Äôs Delilah Rothenberg) calling for a Netflix-style parody series testifies both to the ample supply of material to satirize and to the nervousness of practitioners about the industry‚Äôs ability to deliver transformational change. But it is those contradictions and such nervousness that are spurring advances in the practice: to go beyond outputs to outcomes, to confront unintended consequences, to get proximate to communities, to shift power as well as capital.¬†

Such dynamics will come into play as private investors direct hundreds of millions of dollars toward low and moderate income neighborhoods for solar power, electric vehicle chargers and energy-efficiency retrofits, as ImpactAlpha‚Äôs Amy Cortese wrote this week. That commercial investors now see the intersection of the ‚ÄėE‚Äô and the ‚ÄėS‚Äô in such communities as an opportunity for alpha is the result of decades of work by community and energy and impact pioneers. In turn, the performance of Lafayette Square, Posigen, North Sky, BlocPower and others will yield lessons for even more ambitious efforts to drive prosperity down the economic pyramid. 

Impact and ESG investing are certainly not the full solution, but it‚Äôs lazy thinking to say they‚Äôre the problem. Impact investors may not be able to reverse the forces driving global migration, but they can back financial solutions for migrants and other vulnerable people on the move, reported Dennis Price. Purists may quibble with some of the projects backed by the Energy Department‚Äôs loan program office, but it‚Äôs nonetheless remarkable that sustainable finance pioneer Jigar Shah has $40 billion to loan to accelerate the low-carbon transition. Ceniarth‚Äôs Diane Isenberg and Greg Neichin wisely counsel impact investors to “build bridges to somewhere.” For all the foibles, impact investing and sustainable finance are building a bridge, as the late Harry Halloran would say (see below), to the world we all want. ‚Äď David Bank

ūüéß Impact Briefing. On this week‚Äôs podcast, host Brian Walsh brings back roundtable regulars Imogen Rose-Smith and David Bank to talk private equity scandals, impending regulations, the tech reckoning, battling billionaires and, of course, ‚ÄúDon‚Äôt Look Up.‚ÄĚ Plus, the headlines. Listen to this week‚Äôs episode, and follow all of ImpactAlpha‚Äôs podcasts on Apple, Spotify or wherever you listen.

The Week’s Agent of Impact

Big vision and early bets: Harry Halloran leaves a legacy of business as a force for good. Harry Halloran had a big vision and tried to make it a reality: Business could be a driving force for social change. The Philadelphia energy executive turned philanthropist and impact investor threw his belief and financial support behind a generation of social entrepreneurs who would become leaders in a burgeoning movement to reshape business in the U.S and abroad. Harry died last month, after complications from a stroke he suffered several years ago. Over the last 15 years, Halloran Philanthropies has made $52 million in grants and impact investments to support people advancing wellbeing and reducing poverty through job creation, financial inclusion, clean energy and water, agriculture, education, housing and healthcare. Under the leadership of Harry‚Äôs best friend Joseph ‚ÄúTony‚ÄĚ Carr, the foundation placed some of the earliest bets on what have become some of the most influential organizations in impact investing and social entrepreneurship. 

Halloran provided early backing for B Lab, Echoing Green, Village Capital, Kiva, The Social Stock Exchange in London, Unreasonable Institute, SOCAP, the Latin American Impact Investing Forum and ImpactPHL. ‚ÄúHarry took a risk on an impossible idea because he believed, with some religious fervor, that business could be a force for good ‚Äď if we changed the culture and the rules of the game,‚ÄĚ says B Lab‚Äôs Andrew Kassoy. Harry and the foundation were some of the first believers in Village Capital, says founder Ross Baird, ‚Äúbut also in this idea broadly of groups that can build an entrepreneurial ecosystem.‚ÄĚ Says SOCAP founder Kevin Jones, ‚ÄúHarry could see something that should exist and could exist and had the resources to make it happen before other people understood what it was.‚ÄĚ As a social entrepreneur, says New Ventures‚Äô Rodrigo Villar, ‚ÄúI felt like they were watching my back and supporting me in different things. Pretty much every crazy idea I had, they were in.‚ÄĚ

The Week’s Dealflow

Deal spotlight: Digitalization. Small business digitalization deals in emerging markets are getting bigger. Bogota-based Tul raised $181 million in Series B financing backed by Monashees and Tiger Global to digitalize independent hardware stores in Latin America. India’s Dunzo, which helps small and local businesses fill online orders for food, medicine and consumer goods, raised $240 million. Google backed the company last year as part of a $10 billion plan to accelerate India’s digital economy, particularly for small businesses.

  • Overflow. VestedWorld backed e-commerce venture ANKA in C√īte d‚ÄôIvoire‚Ķ Parrot scored $9.5 million to help restaurants in Mexico digitize business operations‚Ķ JABU secured $3.2 million to help Namibia‚Äôs small businesses source inventory and manage their supply chains‚Ķ India B2B payments provider Rupifi raised $25 million from investors including Quona Capital, Ankur Capital and Better Capital

Returns on inclusion. Enterprise Community Partners‚Äô Growth Fund raises $350 million to invest in affordable housing developers of color‚Ķ Early-stage venture investor TMV raises $64 million for its second fund to invest in diverse founders in financial inclusion, the future of work and sustainability‚ĶCareer Karma raises $40 million to reskill workers for digitally-based careers‚Ķ  Pacific Community Ventures secures $3 million from Starbucks to provide capital for underserved entrepreneurs in California who are running out of state and federal relief funding.

Climate finance. S&P Global acquires The Climate Service, Inc. to expand its climate data, models and analytics… Canadian sustainable supply-chain management firm Assent Compliance secures $350 million from Vista Equity Partners… OneTrust acquires German carbon data platform Planetly to offer carbon and sustainability management tech solutions for its corporate customers.

Inclusive fintech. Landis raises $165 million to help renters become homeowners… Novo snags $90 million to provide banking services for U.S. small businesses‚Ķ Indonesian fintech KoinWorks rakes in $108 million to provide financing and educational tools for small and medium-sized businesses‚Ķ Indonesian banking startup Brankas scores $20 million to provide financial and identity data for fintech partners targeting un- and underbanked populations.

Waste conservation. Roadrunner raises $70 million from General Atlantic to manage waste and recycling… U.K.-based Matter secures £368,000 to reduce microplastic pollution in oceans… Generate Capital acquires Atlas Organics to meet demand for composting… Prevented Ocean Plastic Southeast Asia secures an undisclosed investment from Circulate Capital to build plastic waste recycling infrastructure in underserved Indonesia.

Clean energy. Blackstone injects $3 billion into Invenergy for large-scale clean energy projects… Silicon Ranch secures $775 million for clean energy in rural communities… Canada’s Hydrostor secures $250 million from Goldman Sachs Asset Management to develop long-duration energy storage assets globally.

Green packaging. Estonian green packaging startup Woola scores ‚ā¨2.5 million ($2.9 million) in seed funding to replace bubble wrap with scrap wool that would otherwise be burned or buried‚Ķ Bangalore-based Bambrew secures $2.5 million to source plastic-free green packaging.

Agrifood investing. Aqua-Spark backs Lake Harvest to expand sustainable aquaculture in Africa.

Impact tech. South Africa’s Isizwe secures $460,000 from Global Innovation Fund to de-risk the provision of low-cost Internet access in informal settlements.

Impact management. 60 Decibels raises $8.8 million to measure stakeholder impact at the source.

The Week’s Talent

Fazeela Abdul Rashid, ex- of Temasek, joins Revolution Growth as a partner… Casey Clark is named president and chief investment officer at Rockefeller Asset Management. Clark succeeds David Harris, who will become chairman… Tim Goodman, ex- of Federated Hermes, joins Schroders as head of corporate governance… Dana Linnane, previously with W.K. Kellogg Foundation, joins Michigan’s Governor’s Office of the Foundation Liaison as director of research and planning.

Energy analyst Kingsmill Bond, ex- of CarbonTracker, moves to RMI‚Ķ Ricardo Michel, ex- of FHI Partners, joins Palladium as managing partner in the Americas‚Ķ Nicole Systrom, ex- of Sutro Energy Group, joins Galvanize Climate Solutions as chief impact officer‚Ķ Lafayette Square‚Äôs John Moran is named managing director at Reactivate… Daniel Barker, ex- of Mastercard Center for Inclusive Growth, is named managing director of Halcyon Incubator.

The Week’s Jobs

Partners Group is hiring an investment leader of funds and co-investments for Blue Earth Capital… City Light Capital seeks a data scientist… Morgan Stanley Wealth Management is looking for an alternatives investment due diligence impact analyst… Toniic is hiring an events and education manager and other roles… ANDE is recruiting a senior program associate for its gender-focused programs and several other openings in Mexico, India and Brazil.

Community Credit Lab is looking for a lending partnerships manager‚Ķ Vamos Ventures is looking for two MBA summer associates in Los Angeles‚Ķ Generate Capital is looking for an investment team analyst… Blueprint Local is hiring a remote investment associate‚Ķ ImpactAssets seeks a remote investment strategist and investor relations person‚Ķ Sorenson Impact is hiring a managing director for impact investing in Salt Lake City.

JPMorgan Chase seeks a lead for impact private-equity manager selection in New York… Ford Foundation is looking for an impact investing fellow in New York‚Ķ Social Finance has openings for a director of impact investments, a vice president of impact advisory and other roles in Boston, Austin, San Francisco and Washington, D.C‚Ķ Azolla Ventures is looking for an investment associate in Boston… Boston Consulting Group is hiring a project leader / principal for climate and sustainability in New York.

Stanford University is looking for a climate risk sustainable finance fellow… Halcyon is looking for a program coordinator… The Beacon Fund is hiring an investment officer in Denver… Uber is recruiting a global workplace and real estate sustainability program manager in San Francisco… DC Green Bank seeks a chief investment officer… Rippleworks Foundation is hiring a head of people and culture in Redwood City, Calif… Quantified Ventures is hiring a director and senior associate of health and human services and other roles.

That’s a wrap. Have a wonderful weekend. 

‚Äď Jan 14, 2022