The Week in impact investing: Fund discovery

The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣 Category curation. Diversification across asset classes is one of the things that makes the “ownership economy” an attractive investment opportunity. But until recently, no category grouped opportunities in home ownership, commercial real estate, worker buyouts, community trusts and individual asset-building strategies (and more) under a common umbrella. ImpactAlpha this week introduced a searchable database of more than 60 funds that are investing in the Ownership Economy. The effort was inspired by the “ownership pyramid” developed by Gary Community Ventures and World Education Services and builds on the “alternative ownership” models identified by Transform Finance and draws on the portfolios of Social Capital Partners, the Unlock Ownership Fund and other investors, and collects up our own reporting. “What started as a small experiment among a small group of impact investors truly has the potential to positively shift our capital markets and create an equitable form of American prosperity,” Smitha Das and Santhosh Ramdoss wrote recently (catch them next Wednesday on Transform Finance’s webinar.) 

We have similarly assembled a spreadsheet of three dozen funds investing at the intersection of Climate + Gender, building on the work of the late Suzanne Biegel and the portfolio of Heading for Change, in order to map out another investment category that adds value precisely because it is cross-cutting. From Catalytic Capital to Muni Impact, our beats try to bring together investors, entrepreneurs and other stakeholders who should know each other, but often don’t. ImpactAlpha has always covered a range of sectors, stages, geographies and asset classes to stitch together an ecosystem bound by shared commitment to positive social and environmental impact. “Category creation” is considered the pièce de résistance of product marketing. Category curation is more collaborative. Watch this space for additional tools to help Agents of Impact navigate promising terrains, together. – David Bank

Other must-reads this week on ImpactAlpha: 

🔌 Plugged In: Training AI in Black and Brown history. Oral histories. Local archives. Library collections from historically Black colleges and universities. Training large language models on diverse datasets of Black and Brown history can help redress the racial biases that already have infiltrated many artificial intelligence applications. Latimer.ai’s John Pasmore will join Plugged In host Sherrell Dorsey to explore how thoughtful design and intentional strategies can combat what OpenAI’s Sam Altman calls “shortcomings around bias.” 

  • Join the conversation on LinkedIn Live, Wednesday, Jan. 31 at 8am PT / 11am ET / 4pm London. RSVP today.

The Week’s Agent of Impact

Ines Schiller, Vyld: Reengineering the tampon – and the ethos of biotech. Ines Schiller got the idea for seaweed tampons while training to be a marine guide in South Africa. The Berlin-based entrepreneur learned about seaweed’s role in ocean ecosystems, “and also about how versatile and healthy and sustainable it is.” Feminine products, and tampons specifically, presented an opportunity. “As a menstruator, I just wasn’t happy with the products out there,” she tells ImpactAlpha. “I’m shocked that we don’t label the ingredients in tampons.” Most contain plastic (so do pads and panty liners). Enter the kelpon—a seaweed-based tampon Schiller is designing to biodegrade anywhere, including in household compost. 

Schiller, whose background is neuroscience, philosophy and film, isn’t just redesigning essential hygiene products. With Vyld, she’s redesigning the business ethos behind them. Biotech is a costly business but a lot can be done with a few key people and resources. Vyld has a small in-house R&D team and works with contract manufacturers. “I think that comes from my film producer background where you make things that seem impossible with almost no money,” she says. She is also trying to disrupt the conventional startup loop of fundraising and growth. Vyld operates under a steward-ownership structure, where 1% of its shares are held by Purpose Foundation, whose job is to ensure the company’s mission preservation. For fundraising, Schiller designed from scratch an alternative funding model called the “future profit partnership agreement,” a self-liquidating instrument that offers financial backers a cut of future profits. “Yes, the risk was and is still high,” she says. “But the risk of not achieving a real paradigm shift is so much bigger. And if we get it done, the upside is massive.”

The Week’s Dealflow

Deal spotlight: ‘Missing middle’ lending to social enterprises in Latin America (video). In Peru, Shanantina works with Indigenous communities to cultivate sacha inchi, a nut native to the Amazon. Cedros Cafe, a cooperative, buys coffee beans at a markup from smallholder farmers. Colombia’s Cattleya, a producer of roses and other flowers, employs 350 rural workers. All are borrowers from NESsT’s Lirio Fund, which offers loans “that are more patient, have more reasonable rates, and don’t require excessive guarantees or guarantees borrowers simply don’t have,” Chad Sachs, who manages the Lirio fund, told ImpactAlpha (video). The revolving loan fund this week secured a $500,000 program-related investment from Sorenson Impact Foundation (disclosure: Sorenson Impact Foundation also is an investor in ImpactAlpha).

  • Flexible terms. Globally, 10 million social enterprises generate around $2 trillion in revenues each year, employ 200 million people – and have an unmet demand for more than $1.1 trillion in external financing. Many are too big for microfinance institutions but too small for commercial banks, stuck in the “missing middle” that has long bedeviled small business finance. The NESsT Lirio Fund offers loans of $300,000 on average, with flexible rates and repayable over two to five years. 
  • Livelihoods. With roughly $7.3 million in commitments, NESsT Lirio Fund has made 18 loans to 14 enterprises and says it has created better livelihoods for close to 6,000 people. Nearly half of the fund’s borrowers are women. The fund is aiming to raise up to $20 million, serve 80 Latin American enterprises and create good jobs for up to 30,000 people. Sorenson’s investment “enables us to offer more attractive capital to social enterprises to help them grow faster and more sustainably,” Sachs said.
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Agrifood tech. Denmark-based Kost Capital raised €25 million to help sustainable food innovations get from lab to market… IGS scored £22.5 million to build a giant vertical farm in the UAE… India’s AquaExchange clinched $6 million to meet demand for farmed seafood… Israel-based SeeTree notched $17.5 million for remote monitoring of orchard and forest health.

Battery power. ArcTern Ventures backed Soly, a Netherlands-based solar and battery leasing company for households and small businesses… Battery of big battery deals included Instagrid and Recurrent Energy… Indonesian EV battery swapping network Swap Energy raised $22 million.

Climate funds. Canada’s ArcTern Ventures raised $335 million for its third climate tech fund… Infinity Recycling’s Circular Plastics Fund secured €135 million… Clime Capital blended finance to raise $127 million for an Asia-focused green fund… Germany’s Vidia Equity raised €415 million to invest in decarbonization technologies for the industrial sectors… QBE North America launched Possibilities Fund to catalyze early-stage climate solutions.

Energy transition. Budderfly clinched up to $400 million in debt to help American businesses improve energy efficiency… California’s XGS Energy snagged $9.7 million to build a heat-harvesting system for generating low-cost geothermal energy… Climate tech accelerator NEX Ventures reupped its investments in three Indonesian energy services ventures… I Squared Capital will invest up to $400 million in Brazil’s Origo Energia for the construction of over two gigawatts of distributed solar generation projects… London-based Metris raised £2 million in pre-seed funding to launch an AI-powered platform to help commercial property owners shift to solar.

Fund news. Temasek’s ABC Impact raked in $550 million for its second private equity fund. 

Gender smart. Capricorn Investment Group made a strategic investment in SER Capital Partners, a minority- and woman-owned firm that invests in sustainable middle-market businesses… San Francisco-based edtech investor Reach Capital backed woman-led Coral Care to increase access to in-home pediatric developmental care. 

Impact grants. The Hispanic Wealth Project secured a $50,000 grant from Airbnb Community Fund… The Roberts Enterprise Development Fund awarded $3.6 million in grants to 12 “high-impact” social enterprises providing training and good jobs to refugees, formerly homeless and other underserved groups.

M&A. General Atlantic bought UK-based Actis to roll out its sustainable infrastructure strategy.

Small business. African Guarantee Fund backstopped Vista Group’s lending to small businesses and green ventures… FinAgg, which provides cash flow financing for India’s small and medium-sized businesses, secured $11 million in Series A equity funding.

The Week’s Talent

Brooke Latham, previously climate and impact director at Blisce, became head of sustainability of the ​​NATO Innovation Fund… Conscious Investment Management promoted Casey Taylor to executive director… George Mosomi, a former operations vice president at Mara, joined Mercy Corp Ventures as a platform associate… Lucas Turner-Owens, a former senior advisor at Possibility Labs, joined Building Ventures as principal (Turner-Owens is a co-host of the Impact(ed) podcast).

Ford Foundation’s Roy Swan joined Freddie Mac’s board of directors… Milton Speid, formerly with The ImPact, joined VC Include as executive director… Reinvestment Fund named Tiffany Canady, previously with PIDC in Philadelphia, as chief financial officer… ImpactAssets Capital Partners promoted Sandra Osborne Kartt to deputy chief investment officer and Nick Peters to managing director of investments.

DAI Capital adds Casey Verbeck, a former partner and managing director at Veris Wealth Partners, as impact investment managing director… Diane Damskey, the former head of secretariat of the Impact Principles at the GIIN, launches DC Damskey Global Consulting, an impact and sustainability advisory practice… Impact Ag Partners named Hugh Killen, former chairman of Climate Asset Management,CEO and Australia managing director. 

The Week’s Jobs

US Jobs

In Washington, DC, The Nature Conservancy seeks a senior investment manager; OFN has an opening for a climate and environmental programs senior associate; New Majority Capital has an opening for a business advisor; Invest in Our Future is hiring for several roles… In New York, Energy Impact Partners seeks a senior associate; Capricorn Investment Group has an opening for an investment analyst.

In San Francisco, Decarbonization Partners is on the hunt for an associate; Community Investment Management is looking for an impact director; and WeFunder is looking for a founder lead intern in San Francisco… Impact Ventures is hiring a director of operations in Dallas… Root Capital has several new openings… CalSTRS seeks a portfolio manager for its sustainable investment and stewardship strategies team, and SoLa Impact is on the hunt for a vice president and general manager in Los Angeles. 

International locations 

In Toronto, New Markets Fund seeks an investment analyst in Toronto; RBC is recruiting a student summer intern to focus on corporate citizenship, social impact and innovation; and the Investment Management Corporation of Ontario is hiring a renewable power investments’ associate portfolio manager.

Platinum Pacific Partners is hiring an impact investing associate and director in Sydney… Accion is recruiting a Latin America-focused investment officer in Bogota… BlueMark is on the hunt for an impact investing manager to focus on Europe.

💼 Share the week’s impact jobs. View dozens of other jobs on our new job board. Want to post a listing? Submit it here.

That’s a wrap. Have a wonderful weekend.

– Jan. 26, 2024