The Brief | June 30, 2023

The Week in Impact Investing: Fireworks 

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ImpactAlpha

TGIF, Agents of Impact! We’ll be taking a Brief break for the long holiday weekend in the US. We hope you get a break as well from the heat and the smoke. We’ll be back in your inbox on Wednesday, July 5.

❤️ PS While we’re off, share the love. Invite a friend, colleague or other Agent of Impact to snag our Independence Day special for new subscribers.

🗣 Diverse perspectives. The Supreme Court’s ruling on affirmative action at American colleges exploded just before the long Fourth of July weekend, but the legal fireworks were not a cause for celebration. “No one benefits from ignorance,” Justice Ketanji Brown Jackson wrote in her dissent. “If colleges of this country are required to ignore a thing that matters, it will not just go away.” Race-conscious admissions may not have been perfect, but a race-neutral approach that leaves in place preferences for children of alumni, children of university donors and student athletes in sailing, fencing and squash, will almost certainly lead to fewer Black and Latino students at selective colleges, warns UC Berkeley’s Jerome Karabel. 

The knock-on effects of the ruling may threaten diversity and inclusion efforts in business and finance as well. “It reflects a broader strategy to dismantle hard progress on removing barriers to participation in both economic and civic life,” says Tammy Halevy of Reimagine Main Street, which works to bring the diverse voices of small business owners into policy discussions. Agents of Impact understand that addressing persistent racial injustice is a plus, not a minus. “Inequality poses systemic risks to the broader economy and our nation’s resilience,” says Fran Seegull of the US Impact Investing Alliance. Investors and business operators increasingly see diversity and inclusion as a success factor in a competitive economy. “This ruling is a threat to that work,” Seegull says. “But it is also an opportunity for investors to reaffirm their commitments to building a more equitable economy.” – Dennis Price

Weekend must-reads on ImpactAlpha:

The Week’s Podcast

🎧 Impact Briefing. David Bank chats with FarMart’s Samridhi Singh in the next conversation in our series from the Salzburg Global Seminar on “Connecting capital to communities,” sponsored by the Robert Wood Johnson Foundation. Host Monique Aiken has the headlines. 

Connecting Indian farmers to global markets. Farmers aren’t going to trust just anybody. For five years, the founders of FarMart, the Gurgaon-based agricultural products platform, struggled to get traction for their services – and to get crops to sell to their customers. Now, FarMart has become one of India’s fastest-growing tech companies. Growth took off about two years ago when FarMart identified who the country’s more than 100 million smallholder farmers do trust. About two million “mom-and-pop” shops sell seeds and fertilizer, extend credit, and provide advice to farmers on pest control, crop varieties and market conditions. “It’s a very beautiful relationship. We don’t get in between the relationship,” Singh explains on this week’s podcast. “But we tell them that we’re going to help you connect your farmers to the market.”

Singh describes FarMart as the AirBnB of Indian agriculture – a food supplier with no land, no warehouses and no trucks that nonetheless is able to aggregate commodities for sale to global food companies. FarMart helps farmers raise their incomes, gives shop operators digital tools and additional products and services to sell, and even plays a role in reducing food waste and building food security. “These large food businesses buy from us, because we’re assuring them the quality that they want. We’re showing them the price that they want. And we do it a lot faster than anyone,” Singh says. The key: finding the community assets that already have farmers’ trust. “That was an ‘aha’ moment,” notes Singh. “It took five years to get this insight that has, like, 100x potential for the sector.”

The Week’s Agent of Impact

Katherine Stodulka, Systemiq: Making introductions to bridge gaps in sustainable finance. The first thing that Katherine Stodulka does when you meet her is suggest that you meet someone else. Then she’ll introduce you. With great enthusiasm. Stodulka, who leads sustainable finance at advisory firm Systemiq, fosters connections, including as head of a global taskforce on blended finance. “Any work we do that doesn’t then connect to somebody driving the change will be lost,” she says. At last week’s Summit for a New Global Financing Pact in Paris, Systemiq unveiled strategies for using guarantees to unlock climate finance (see, “New global financial pact advances innovative financial solutions and commitments to system change”). “We need to bring down the cost of borrowing in emerging markets,” Stodulka says. “We need better de-risking instruments. We need concessional funds for loss and damages. We need to mobilize private capital so these pledges aren’t just sweeping platitudes.” 

The self-described “daughter of hippies” was raised in Darwin, Australia. She traces her engagement on social issues back to her father, who was an anti-discrimination commissioner in a state with a large Aboriginal population. As an M&A lawyer, Studulka did energy deals in London before joining Systemiq. “There can be no real change unless we fundamentally shift decision-making power and agency from North to South,” Stodulka tells ImpactAlpha. She has doubts whether she, as a white, middle-class woman from a coal mining state in Australia, should play the role of sustainable finance intermediary. Then she remembers the connections she can make. “When you are dealing with an inequitable, unfair, inefficient system, we all have a responsibility to call out those issues,” she says. “So I’m like, yes, I can run that message home.” 

The Week’s Dealflow

Deal spotlight: Ready or not, here comes lab-grown meat. Last week’s approval by the US Department of Agriculture for chicken products from Upside Foods and Good Meat sounded the starting gun for the US market in lab-grown meat – real animal protein, without the animals. (Singapore approved Good Meat’s cultured chicken product back in 2020.) “The challenge remains to demonstrate that these products can be produced at scale for a commercially-viable price,” said Matthew Walker of S2G Ventures, which this week backed a $40 million Series A financing round for LA-based Omeat. Omeat says it can collect beef cells and plasma from cows and cultivate it into real beef within a week. “We’ve been working diligently toward commercialization,” Omeat’s Ali Khademhosseini said in an email. “The recent regulatory approval was a huge milestone.” In Germany, Bluu raised $17.5 million to get its lab-grown fish approved for consumers in Singapore. 

  • Fermentation-based. Many investors have fallen out of love with plant-based food producers. But this week, Supply Change secured commitments from Illumen Capital and MassMutual for a fund focused on fermentation-based proteins. “We are still a ways off with lab-grown meat,” Supply Change’s Shayna Harris told ImpactAlpha, adding that “the environmental footprint of lab-grown meat is an outstanding question.” Portfolio company Aqua Cultured Foods makes fungi-based seafood using microbial fermentation, which Harris says offers “superior nutrition and a clearer line of sight to cost-parity” with real meat. Supply Change also backed Berkeley, Calif.-based Hyfé to upcycle wastewater from food processing into ingredients for alternative-proteins.
  • Climate-smart farming. Joyful Ventures raised $23 million to invest in technologies that it believes will direct “the $1.5 trillion global animal protein industry towards sustainable, regenerative food solutions.” Estonia’s eAgronom raised $5.5 million to help farmers improve sustainability practices and enter the carbon markets. Puerto Rico’s Carbonwave snagged $6 million to make agri-inputs from sargassum, the brown seaweed that has overwhelmed Floridian and Caribbean beaches this year. In India, Omnivore secured $150 million in a first close for its third agrifood impact tech fund that will invest through climate lens. “We see increasing climate salience in everything that we’re doing,” Omnivore’s Mark Kahn told ImpactAlpha.

Carbon markets. Bayer made its first purchase of carbon removal credits from Novocarbo, a Hamburg-based producer of biochar… UK-based Supercritical raised $13 million for its marketplace where corporations can purchase carbon removal credits and work toward net-zero goals.

Clean energy. Blackstone made a roughly $1 billion follow-on investment in clean energy storage developer Invenergy Renewables… German nuclear fusion startup Focused Energy raised $82 million… The Emerging Africa Infrastructure Fund and FMO provided project financing to Africa REN to develop a solar + battery project in Senegal… $1 billion in green bonds will reduce the cost of clean energy in Southern California. 

Circular economy. DePoly secured $13.8 million to recycle old plastic and cut fossil fuels in new plastic products… Kubik scored $3.3 million to turn plastic waste into low-carbon building materials.

Economic inclusion. BlueOrchard secured $100 million to back small enterprises in Latin America and the Caribbean… The African Development Bank is providing a $400,000 grant to Eswatini to map out green city plans that would create 100,000 jobs… Upaya Social Ventures backed WeVois Labs in India to improve incomes for sanitation workers while improving overall waste collection efficiency. 

Electric vehicles. Ecosystem Integrity Fund’s latest investments from its fourth fund includes EV charging tech developer Amp… General Motors inked a deal with Australia’s Element 25 for enough manganese sulfate to make one million EVs annually.

Impact fintech. UK nonprofit Fair4All Finance invested £400,000 in Singlify, a tech company helping credit unions digitize their operations.

Investing in health. Minneapolis-based DUOS raised $10 million from Primetime Partners, SJF Ventures and a fund managed by Castellan Group to help adults age at home by connecting them with health plan benefits.

Returns on inclusion. TREND Real Estate Fund raised $10 million for real estate ownership for Black residents… Unshackled Ventures raised $35 million for its third fund to invest in immigrant-led businesses in the US. 

The Week’s Talent

Doug Miller, ex- of Zero Labs, joined Energy Peace Partners as director of market development… Eric Rice will step down as BlackRock’s head of impact investing later this summer… Sophie Purdom, co-founder of Climate Tech VC, launched Planeteer Capital to invest in early-stage climate tech founders… Vinesh Kapil, ex- of Touchdown Ventures, joined Social Finance as associate director of impact investing.

Alexis King Wilson, ex- of Chief, joined Endeavor as senior director of impact and inclusion… Harlem Capital promoted Gabby Cazeau to partner and Nicole DeTommaso to principal… Bhairvee Shavdia, ex- of HCAP Partners, joined SBJ Capital as managing director… Alexis Dishman, ex- of Michigan Women Forward, joined Community Reinvestment Fund as chief lending officer for small business.

The Week’s Jobs

💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.

US jobs

Microsoft is looking for an Atlanta-based senior manager for public policy in its office of responsible AI… Open Road Alliance seeks an investment officer in Washington, DC… Rockefeller Philanthropy Advisors has an opening for a writer and editor in New York.

Raise Green is hiring a climate finance project manager in New Haven, Conn… Total Impact Capital seeks a senior accountant in Bethesda, Md… Levoca is recruiting an impact and sustainable finance associate in Miami… Builders Vision is looking for a vice president for ESG and impact investments in Chicago.

International locations 

Matrix Renewables has an opening for a commercial operator analyst in Madrid… Allianz Global Investors seeks an impact private credit student apprentice in Paris… Caspian Impact Investments is on the hunt for an equity investments associate or senior associate in India.

60 Decibels is recruiting a head for its Nairobi office… Symbiotics has an opening for an investment associate in Cape Town… Bestseller Foundation is on the hunt for an Africa-based investment director and an investment associate… Accion is hiring a program management and operations assistant in Bogota.

Remote jobs

Common Future seeks an impact investment managing director… Common Trust is recruiting an investment director… Ananda Impact Ventures is on the hunt for an investment manager and associate… Global Fund for Women is hiring a manager of emerging opportunities.

That’s a wrap. Have a wonderful weekend. 

– June 30, 2023