The Week in Impact Investing: Deflation

TGIF, Agents of Impact!

🗣 Cost curves. The green premium is giving way to the green discount. Calling the proposed $369 billion energy and climate legislation the Inflation Reduction Act may be mostly about gaining the vote of one recalcitrant U.S. senator. But it also reflects the inexorable decline in the costs of renewable energy. Prices for solar, wind and batteries are dropping about 10% a year, as they have for decades; prices for coal, gas and oil have stayed roughly the same as they were in the late 1800’s. Ramping up wind and solar will save American households billions, according to RMI; tax credits and rebates for building electrification, energy efficiency and electric vehicles will lower costs further. Added bonus: the considerable climate and global security benefits of renewables and energy efficiency, as John Galyen of the heating and cooling company Danfoss argues in a guest post. 

The policy pivot may also foster a broader appreciation of what has been called the “abundance agenda” or “supply-side progressivism.” Not long ago, economists worried that demand was slack and wages were stagnant. With the rebound from the pandemic, demand soared and wages rose. Those were good things; rising prices, not so much. Increasing the supply of things people want, like affordable housing, electric vehicles and quality education and health care helps bring prices down. That’s what impact investors have been doing for years. “Typically innovations in healthcare increase costs, because they’re looking for better technology,” says Javier Lozano of Clinicas de Azucar, which this week raised $7.3 million to expand its network of diabetes clinics in Mexico. “In terms of serving low-income patients, it should be about finding innovations that reduce costs.”

ReFED’s Alejandro Enamorado explains how the tech makeover of food banks is likewise reducing hunger and food waste. ‘The Port’ in Cincinnati is using its quasi-public financing authority to bring back small manufacturers and help transfer single-family homes from private-equity firms to local residents, as Rachel Reilly reports. Kresge Foundation’s $3 million guarantee helped unlock millions more for BlocPower’s plans to electrify aging building stock across whole cities, starting with Ithaca, N.Y. Public energy and climate investments are expected to stimulate many multiples more in private financing, further driving down costs. This week, Dia Martin of the U.S. International Development Finance Corp. lays out four ways impact investors are collaborating to amplify the impact of their catalytic capital, Spring Point Partners’ Margot Kane details the family office’s support for emerging fund managers, and Convergence’s Regina Rossman lifts up the social, environmental and impact expertise that non-governmental organizations bring to blended-finance transactions. – David Bank

🎧 Impact Briefing. ImpactAlpha’s Zuleyma Bebell and Dennis Price join host Monique Aiken to talk about this week’s launch of ImpactAlpha Open, trends in the media business and why ImpactAlpha “dares to be optimistic.” 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 Agent of Impact

😎 Taj Eldridge of Include Ventures: Putting the cool in climate action. Patagonia vests and khakis ain’t gonna cut it, says Taj Eldridge. To spread the word on climate action, the PhD and climate tech investor dons sustainably made crown fedoras (like those his great grandfather wore) and kimonos. “Everything is purposeful,” Eldridge says of his fashion choices, for which he credits his wife. His calculation: Fear of climate change won’t change behavior. Introducing people to electric pickup trucks, longer-lasting clothing that looks good or athletes and hip-hop artists that invest in climate tech just may. Connecting climate and culture is personal for Eldridge, who a few years ago was diagnosed with a kidney disease that he attributes to lead in the water in Dallas, where he grew up. “Illness became a catalyst for me to realize that we could do so much more than we’re doing.” 

For Eldridge, doing more has meant investing in diverse and overlooked climate entrepreneurs through L.A. Cleantech Incubator. At Include Ventures, he is backing emerging fund managers that are extending the opportunities and benefits of clean technologies to Black and Brown and Native and rural communities. Doing more also means networking Black and Brown talent into the green economy through groups like Greentech Noir and VC Familia. “We’ve made climate investing cool,” Eldridge told ImpactAlpha. “We’ve made it to where it is just about as cool as being in web3.” With climate funding commitments up, climate ventures are scurrying for talent. Jobs for the Future has tapped Eldridge to lead a campaign to train and place tens of thousands of diverse individuals in clean energy jobs. “Climate change is a public health issue, an economic issue, and a social justice issue,” Eldridge says in his social media profile. “I’m here to impact them all.”

• Share, “Taj Eldridge of Include Ventures: Putting the cool in climate action,” by Dennis Price on ImpactAlpha, and like the story on Instagram.

The Week’s Dealflow

🌱 Deal spotlight: Climate-smart agriculture. Farmers around the world will need to produce about 70% more food by 2050 to feed an estimated nine billion people. Agriculture is responsible for about a quarter of all greenhouse gas emissions. Climate-smart agriculture practices offer global farmers a pathway to sustainable productivity and increased income while mitigating agriculture’s contribution to climate change. Agtech startups with regenerative solutions are bringing in capital from investors to scale their impact.

• Climate finance. Gates Foundation-backed Enko, which uses machine learning and drug discovery to develop non-chemical modes of killing agricultural pests and weeds, secured $70 million in a Series C round led by agrochemical company Nufarm. Separately, Arable, whose data software and hardware tech helps food companies manage crop outcomes to optimize sustainability, raised $40 million from investors including Galvanize Climate Solutions, Prelude Ventures, S2G Ventures and Ajax Strategies.
   
• Emerging markets. Smallholder farmers in emerging markets historically have had to wait a decade or more for access to new technologies and solutions. In India, Piatrika Biosystems snagged $1.2 million, led by Ankur Capital, to make sustainable seeds and farm inputs cheaper and more accessible to farmers. In Argentina, Ucrop.it raised $3.1 million to help farmers in Latin America improve the traceability of their crops and benefit from sustainable agriculture practices.
   
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Community finance. Austin Community Foundation mobilized a $4 million low-interest loan for Austin Habitat for Humanity. 

Green infrastructure. British International Investment and FMO committed $116 million to a fund managed by African Infrastructure Investment Managers to invest in high-impact infrastructure projects in Africa… Energy tech company Nabors Industries invested $7 million in sodium-ion battery developer Natron. 

Impact tech. AgriAku clinched $35 million from Alpha JWC Ventures, Go-Ventures and others to digitalize services in Indonesia’s agricultural value chain… Black woman-led neobank Guava scored $2.4 million to provide financial services to Black-owned small businesses and creators… EQL Finance scored $2.4 million in a seed round led by Zeal Capital Partners to offer interest-free loans to working-class Americans… Seedstars raised $20 million for early-stage impact startups in emerging markets… Sudanese fintech venture Bloom raised $6.5 million in seed funding from investors including Visa and Y Combinator… Woman-led Twine Ventures secured $25 million to invest in early-stage healthcare, fintech and climate tech founders.

Investing in health. Clinicas de Azucar will expand diabetes clinics with $7.3 million from Blue like an Orange… Village Capital selected 10 tech startups to accelerate innovation in health equity. 

Low-carbon transition. American Forest Foundation’s $10 million green bond connects forest owners to carbon markets… BlocPower secured a $3 million guarantee from Kresge Foundation to green and electrify buildings… Fifth Wall closed a $500 million climate fund to decarbonize real estate… Gravity Climate raised $5 million in seed financing from Eclipse Ventures and other investors to help manage industrial carbon footprints… Hydrogen-powered airplane maker ZeroAvia raised $30 million from Barclays Sustainable Impact Capital, International Airlines Group and others.

Renewable energy. SOURCE Global, which uses solar hydro panels to draw clean water out of the air, raked in $130 million from Breakthrough Energy Ventures, Microsoft’s Climate Innovation Fund, Fifth Wall, Lightsmith Group and others… D.light raised $50 million in debt as investors warm up (again) to off-grid solar.

Returns on inclusion. ImpactPHL and The Economy League launched The Hurdle Fund with $125,000 for Black and Brown businesses in Philadelphia.

Waste management. Circulate Capital secured $53 million to reduce plastic pollution.

The Week’s Talent

Shaun Donovan, who served in the Clinton and Obama administrations, joins Ford Foundation as a senior fellow… Agnes Dasewicz, ex- of SEAF, joins U.S. International Development Finance Corp. as chief operating officer… Jodi Brockington, founder of NIARA Consulting, joins VC Include as programs manager… The Media Development Investment Fund selects Suleiman Yar’Adua, Motunrayo Alaka, Catherine Gicheru, Ruona Meyer and Adesubomi Plumptre to lead its Nigeria Media Innovation Program… Ibrahim Rasheed, a former impact data analyst intern with Closed Loop Partners, joinsMarquette Associates’ sustainable investing group as an ESG research analyst. 

Ellen Jackowski, ex- of HP, joins Mastercard as chief sustainability officer… Donna Riley Bebb, formerly of Google, joins Thomas Bravo as head of ESG… Ann Klee, who led ESG efforts at General Electric, joins Energy Impact Partners’ ESG advisory board… The Plug’sSherrell Dorsey is the new host of the TED Tech podcast… Michael Sheren, formerly with the Bank of England, joined MetaVerse Green Exchange as president and chief strategy officer… Lissy Smit, ex- of Rabobank, is named CEO of Dutch impact investor Aqua-Spark… Tess Maria Krasne, a graduate of UC-Berkeley Haas School of Business, joins Alante Capital as a senior associate. 

Chris Castro, who helped lead Green Works Orlando, joins the U.S. Department of Energy as chief of staff to the office of state and community energy programs… Jason Sukhram, ex- of MaRS Discovery District, joins Quinn+Partners as impact services lead and engagement manager. Chelsie Hunt, previously an ESG consultant, joins the firm as senior analyst… A team of German scientists led by Tobias Erb at the Max Planck Institute for Terrestrial Microbiology is awarded a $1 million prize to fight climate change with “photosynthesis 2.0.”

ImpactAlpha promoted Zuleyma Bebell to chief operating officer, Dennis Price to chief impact officer and Amy Cortese, who is celebrating her birthday this weekend, to editorial director. Happy birthday, Amy!

The Week’s Jobs

Mercy Corps is looking for an associate general counsel to join its legal team… Candide Group seeks a portfolio operations manager… Raikes Foundation is hiring a program officer of education in the Washington, D.C., New York or Seattle metro areas… The Union of Concerned Scientists is looking for a director for a climate and energy program… Ajax Strategies is hiring a hybrid-remote senior associate in the San Francisco Bay Area… Acumen seeks an associate in New York… The James B. McClatchy Foundation is looking for an impact associate in Sacramento, Calif. 

Equitable Facilities Fund is hiring an investment associate in New York… Illumen Capital is recruiting an impact associate… BlackRock seeks a vice president of global impact research in New York… NatureVest is hiring a director of strategy to lead its impact management team… Princeville Climate Technology seeks a senior investment professional in San Francisco or Berlin… Origen Carbon Solutions is looking for a remote project development lead for carbon removal… MSCI ESG Research is hiring an impact investing and screening specialist in New York.

Thank you for your impact!

– July 29, 2022