TGIF, Agents of Impact!
Impact Briefing. On this week’s podcast, ImpactAlpha reporter Jessica Pothering joins host Monique Aiken to discuss how African entrepreneurs are stepping up with tech solutions to the continent’s challenges. We also catch up with Unreasonable Group’s Pratibha Vuppuluri and hear a snippet of next week’s The Reconstruction podcast with Illumen Capital’s Daryn Dodson. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 5
1. Policy and placemaking go direct. Policymakers, funders and other stakeholders are putting cash and control in the hands of U.S. residents to address the interlocking challenges of COVID-19, inequality and racial justice.
- Guaranteed income experiments. Guaranteed income is gaining steam as an anti-poverty policy. The latest example: Oakland, California will begin to make regular, no-strings-attached cash payments to low-income families of color. The Oakland program comes on the heels of positive results from a similar pilot in nearby Stockton. Dozens of mayors now plan to pilot guaranteed income programs. Dig in.
- Neighborhood trusts. The financial innovation is popping up in cities like Philadelphia, Atlanta, Tulsa and Kansas City to take speculative real estate assets off the market in fast-gentrifying neighborhoods and pass control – and ownership – of those assets to residents. Cornell University’s Joseph Margulies, an originator of the idea, made the case on ImpactAlpha that neighborhood trusts can help maintain affordability and fight back against gentrification and displacement. Keep reading.
- Community-rooted development. Bottom-up ideas like those above are captured in a new playbook for local economic development from Local Initiatives Support Corp. and the Bass Center. The goal, says LISC’s Annie Donovan, is to “prioritize the people who live in those places and the assets that they bring.” More.
2. Danone’s test case for stakeholder capitalism. B Lab’s Andrew Kassoy put French food giant Danone on “impact watch” following the ouster of sustainable business champion Emmanuel Faber (see, “In Danone’s drama, union pension fund advisor CtW turns the tables”). For ImpactAlpha, Kassoy writes that “the movement toward stakeholder capitalism isn’t about individual heroes. It’s about systems change.” This requires changing the rules of the game, he says, like broadening the definition of investor fiduciary duty to focus on real value creation. Read the full post.
3. Measuring the low-carbon transition. The transition is on, and European oil and gas majors are pulling ahead of the pack. Total, Galp Energia, Equinor, BP and Shell are best prepared, according to an analysis of 39 global oil and gas companies. Not so ready: U.S. producers Chevron and ExxonMobil. U.S. banks are also laggards when it comes to addressing the climate crisis. While they decreased fossil fuel funding in 2020 amid a wave of net-zero pledges, J.P. Morgan, Citi and Bank of America still top an annual list of global funders for the sector. Keep up.
4. Impact tech in Africa. African entrepreneurs are showing up in the market with solutions designed for the continent’s unique challenges.
- Agriculture tech. Agtech ventures are a high-impact investment opportunity “with the potential to ignite sustainable economic growth and stability in the most job intensive industry in Africa,” writes Unreasonable Group’s Pratibha Vuppuluri in a guest post for ImpactAlpha. Read more.
- Climate-smart fintech. Demand for climate data on the continent is growing across supply chains. “Fintech can supercharge the reach and affordability of solutions that have the potential to reduce the exposure of climate vulnerable populations and help them with preparedness,” says Bethany Kanten of BFA Global. Onward.
5. Social overtakes green. Social and sustainability bonds, spurred by the COVID-19 pandemic, overtook green bonds in 2020, with issuances surpassing $300 billion. In the first in a series of contributions for ImpactAlpha, Henry Shilling of Sustainable Research & Analysis argues that green bond funds may be forced to expand their mandate to also include social and sustainable bonds. Check it out.
The Week’s Agent of Impact
Arlan Hamilton, Backstage Capital. Venture capitalists love to invest in disruption. Arlan Hamilton is disrupting venture capital. She created Backstage Capital in 2015 with a conviction that backing “underestimated” founders could unlock overlooked value. Initially dismissed by the VC world, she convinced investors like Slack’s Stewart Butterfield and Mark Andreesen to sign on to her fledgling fund. The West Hollywood-based venture firm has built a portfolio of more than 175 startups, including tech ecosystem Bitwise, commercial fleet management firm Fleeting, climate-friendly food products company Planet FWD, and fashion upstart Haute Hijab (see, “The VC taking cold calls from underestimated entrepreneurs”). Nearly all of Backstage’s “headliners” are run by women, people of color and/or LGBTQ founders (Hamilton identifies as all three). Hamilton just broke another mold, becoming the first venture firm to raise money via regulation crowdfunding, which allows companies to reach out to customers, supporters and the public for capital. Her first campaign, on crowdfunding platform Republic, raised over $1 million in less than 10 hours. When regulators last week lifted the fundraising cap to $5 million, she re-opened the campaign. Within days, more than 7,000 small investors had maxed out the raise.
“The narrative and what it signifies is tremendous,” Republic’s Kendrick Nguyen told ImpactAlpha. “It’s a major validation for the concept of inclusion and retail capital to be able to collaborate with Arlan Hamilton like this.” In opening up her fund to ordinary investors, Hamilton also opened up on what it means to be an emerging fund manager. “We have never had enough assets under management at one time where any management fee would cover even one person,” Hamilton told Inc. magazine. The $5 million will give her and her five-person team a couple of years’ runway. In return, investors get a small stake in the firm, entitling them to a share of any management fees and returns from its funds. They also get to tag along on Hamilton’s groundbreaking ride. “It’s a sigh of relief,” Hamilton said on a recent Backstage podcast. “I’m just revved up and ready to go and to do all the things that we have been waiting to do but couldn’t do before.” – Amy Cortese
The Week’s Dealflow
Inclusive fintech. Flutterwave backs Lagos fintech Bankly to bring cash-dependent consumers online… Bangalore-based Velocity raises $10.3 million to scale up revenue-based financing for businesses in India… Latvia-based Jeff App clinches $1 million to expand financial inclusion in Asia… CIM backs Salary Finance to support affordable loans for underserved workers… Pollinate secures $50 million to help small businesses access capital and digital tools.
Low-carbon economy. HSBC Asset Management and International Finance Corp. close a $538 million green bond fund targeting “climate-smart investments” in emerging markets… Utility e-bike maker and delivery startup URB-E raises $5 million… Soltage and Harrison Street are partnering to invest in distributed utility-scale solar and energy storage… Adani Green Energy secures $1.4 billion loan for renewable portfolio in India.
Agrifood investing. Qatar Investment Authority leads plant-based egg producer Eat Just’s $200 million round… The Nature Conservancy is building a portfolio of agtech ventures to improve soil health… OurCrowd secures $50 million to invest in water and agtech ventures… Online grocery startup Weee! raises $315 million to expand to underserved Asian and Latino communities across the U.S.
Fund news. South Africa’s RisCura launches a series of impact fund-of-funds to back national and global development goals… Europe’s BSocial Impact Fund raises €38 million to back Spanish impact startups… New York State pension backs 57 Stars’ impact fund… J.P. Morgan Private Bank closes $150 million Global Impact Fund.
Education and skills. Harlem Capital leads a $2.5 million seed funding round for flexible workspace startup Workchew… Rithm School secures $25 million to expand its income-share agreement program.
Impact tech. Laerdal’s Millions Lives Fund turns to medical tech to close healthcare equity gaps… Allonnia scores $20 million to develop a biotech solution for reducing water waste.
Retail impact investing. Uncommon Giving launches $50 million crowdfunding campaign to expand charitable giving platform… Arlan Hamilton’s Backstage Capital closed out its $5 million fundraise on crowdfunding platform Republic (see Agent of Impact, above).
Returns on inclusion. New York’s BBG Ventures closes $50 million third fund to back women-led consumer startups… TPG launches TPG NEXT to “seed, support and scale” diverse investors and entrepreneurs.
The Week’s Talent
Eric Cooperström, ex- of NatureVest, joins Hancock Natural Resources Group, a subsidiary of Manulife Investment Management, as managing director of impact investing and natural climate solutions… William Byun, ex- of Conchubar Group’s Asia Renewables, joins Oxford GAV Conservation Venture Studio as a partner… Daniel Zotos, previously with the Alzheimer’s Association, joins The Zero Emission Transportation Association as communications director… Prince Harry (yes that one!) joins BetterUp as chief impact officer.
Michael Arougheti of Ares Management and Renée Beaumont, ex-of Generation Investment Management, join Volery Capital as senior advisors… Mark Campanale of CarbonTracker is awarded theJoan Bavaria Award for Building Sustainability into the Capital Markets by Ceres and Trillium Asset Management… Daniel Brett, ex- of Pacific Community Ventures, joins the New Markets Support Company as vice president of impact… Angela Wood, ex- of Sawtooth Solutions, joins North Sky Capital as chief financial officer.
The Week’s Jobs
The National Coalition for Community Capital is recruiting a (remote) director of administration… Quantified Ventures is hiring a senior associate of health and human services in Washington, D.C… Nia Impact Capital has an opening for a client services and operations manager in Oakland… Funding U seeks a director of marketing operations in Austin… Impact Investing Institute is looking for a communications and engagement manager in the U.K. or Europe for a maternity leave cover… J.P Morgan’s International Private Banking is looking for a head of sustainable investing in London.
Andreessen Horowitz seeks a network engagement partner for its Cultural Leadership Fund in Menlo Park, Calif… Kapor Capital is recruiting a partner/chief administrative officer in Oakland… Tideline is hiring a short-term impact investing associate in San Francisco… CarbonTracker has openings for a cleantech analyst, a head of investor outreach and a company research senior analyst… Nasdaq is hiring an ESG analyst in New York… Whole Foods seeks a business development principal in Austin.
That’s a wrap. Have a wonderful weekend.
– Mar. 26, 2021