The Week in impact investing: Leadership

TGIF, Agents of Impact! 

🗣 Green Way Forward. The heroic resolve of Ukraine’s President Volodymyr (“I need ammunition, not a ride”) Zelensky has offered the world a taste of something that has been curiously missing through the crises of recent years: leadership. The refreshing flavor seems to have whetted appetites. For a change, many countries are welcoming refugees, not scorning them. Companies and investors are moving quickly to write down Russian holdings that had contributed to what the European Risk Management Council’s Evgueni Ivantsov blandly labeled “negative geopolitical externalities.” That could open the way (and remove the excuses) for them to wind down assets responsible for other negative externalities, most obviously climate change, as Sinclair Capital’s Jon Lukomnic explains on this week’s Impact Briefing podcast.

With the IPCC’s 4,000-page jeremiad on the coming climate catastrophe landing during the same week as Russia’s invasion, it was tempting to hope that patriotism might succeed where science has failed in sparking the massive green energy mobilization required. To reduce Russia’s leverage, Germany accelerated its goal of 100% renewable electricity to 2035 from 2040; the European Commission is expected to target a 40% reduction in fossil fuel use by 2030. Disruptions can be fleeting (cf. COVID) and fossil fuel opportunists already are arguing that the invasion is a reason to retrench, not transform. Which makes it incumbent on shareholders to vote their proxies, citizens to return their ballots, and consumers to change their habits (heat pumps, anyone?) Extractive industries correlate with authoritarian regimes, RethinkX’s Tony Seba told ImpactAlpha’s Amy Cortese. Let the resolve of the Ukrainian people put some (low-carbon) steel in the spines of national leaders that the way forward is demilitarized and decarbonized. – David Bank

🎧 Impact Briefing. On this week’s podcast, host Monique Aiken and David Bank take up the week’s surplus of news, and share a conversation with Jon Lukomnik of Sinclair Capital about the swift fallout from Russia’s invasion of Ukraine, the weaponization of finance, and the Green Way Forward. And Duke’s Cathy Clark offers a preview of next week’s Agents of Impact Call. Plus, the headlines.

• Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.

👋 Next week’s Call: How to execute on impact and ESG inside a big company. Salesforce is tying executive compensation to the company’s ESG performance. Walmart is providing lower-cost financing for suppliers that reduce emissions. On next week’s Call, Walmart’s Brendan Morrissey and Salesforce’s Sunya Norman join Cathy Clark of Duke’s Fuqua School of Business, who will offer Agents of Impact a four-step process for operationalizing ESG strategies inside the enterprise.

• Join The Call, Tuesday, Mar. 8, at 10am PT / 1pm ET / 6pm London. RSVP today.

The Week’s Agent of Impact

Sandra Moore, Advantage Capital: Bringing capital to entrepreneurs of color. New Orleans-based Advantage Capital seeks out businesses in underserved communities, in part because that’s where subsidies are available under programs such as New Markets Tax Credits, Low-Income Housing Tax Credits and the Department of Agriculture’s Rural Business Investment Program. Since 1992, Advantage has deployed $3.8 billion to more than 800 small businesses in dozens of U.S. states, including Missouri, Mississippi, Arkansas, Nebraska and Ohio. Moore is the firm’s chief impact officer and its only Black woman partner. Following the murder of George Floyd in 2020, Moore pushed the firm to adopt an explicit racial lens. “I knew we needed to continue to deploy capital to businesses in capital-starved markets, but with a laser focus on supporting minority-owned businesses to provide them with flexible financing solutions to support growth and create wealth in minority communities,” she told ImpactAlpha.

Moore says she tapped her inner social scientist when she joined Advantage in 2017, after spending 16 years on the firm’s board. She had been president of Urban Strategies, a national nonprofit housing developer, a member of the late Missouri Governor Mel Carnahan’s cabinet, and an administrative judge with the U.S. Equal Employment Opportunity Commission. At Advantage, Moore built out an impact team and infused an impact perspective in the firm’s investment committee, due diligence and deal structuring. Moore secured commitments from US Bank, Truist Bank, Midwest Bank and Southern Bancorp for Advantage’s Empower the Change Fund, a planned $200 million initiative to back dozens of “growth-ready” Black and Brown-led businesses in overlooked markets across the U.S. “I told the team we needed to go out of the box with a group of partners that would catch the investing and impact communities’ attention,” she says. The game plan is to help entrepreneurs of color scale their businesses and create good jobs in their communities. “We’re talking about investing in companies that, with our investment capital and support, will intentionally look to grow the wage base.” 

• Keep reading, “Sandra Moore, Advantage Capital: Bringing capital to entrepreneurs of color,” by Roodgally Senatus on ImpactAlpha and share the story on Instagram.

The Week’s Dealflow

Deal spotlight: Black leadership. Black-led funds targeting Black founders and communities are bringing in hundreds of millions of dollars. CalSTRS, the $320 billion pension fund, invested $50 million in SoLa Impact’s Black Impact Fund, which has raised $250 million to invest in affordable housing in Black and Brown communities. Serena Ventures, the early-stage venture firm of entrepreneur (and 23-time Grand Slam tennis champion) Serena Williams, raised $111 million to back diverse founders with inclusive solutions.

• Small businesses. Sandra Moore (see Agent of Impact, above) is leading Advantage Capital’s Empower the Change Fund, which is looking to deploy $200 million for minority-owned businesses in underserved communities. 

Green energy. Investors commit $120 million to community solar venture Aspen Power Partners… Palmetto rakes in $375 million, led by Social Capital, to democratize solar energy access for homeowners… Aurora Solar rakes in $200 million in Series D financing from ICONIQ, Fifth Wall and Emerson Collective to digitize solar energy… H2U Technologies raises $11 million in Series A financing to produce low-cost green hydrogen… H2scan raises $70 million to make hydrogen sensors for electric utility and industrial partners, including Shell and ExxonMobil… Virtual Peaker raises $16.6 million to help utility companies manage power supplies from rooftop solar, wind, batteries, electric vehicles and other distributed energy sources.

Impact tech. Blue Horizon backs California Cultured to make chocolate using plant-cell cultures, an alternative to the use of bacteria or animal cells… GridPoint raises $75 million to help commercial building owners improve properties’ sustainability using data, automation and machine learning… Ankur Capital backs Krishify’s farmer network and Offgrid Energy Labs’ green batteries.

Climate finance. Denver-based Project Canary clinches $111 million for analytics software that helps companies monitor greenhouse gas emissions and energy and water usage… Aera VC raises $30 million – and launches a DAO – for climate breakthroughs… NCX secures $50 million to expand its market for forest-based carbon offsets.

Investing in health. Blue Like an Orange invests $14 million in InvestFarma to improve access to affordable healthcare products and services for low-income people in Brazil… Two Sigma Impact’s portfolio company Circle of Care acquires Empower Behavioral Health, a provider of therapy treatment for children diagnosed with autism.

Waste conservation. Germany’s Resourcify secures €5 million ($5.6 million) in a round led by Ananda Impact Ventures to help businesses track and manage waste… Flashfood raises $12.3 million in a Series A round led by S2G Ventures to help retailers sell excess food at low prices and reduce food waste.

Financial inclusion. M-KOPA secures $75 million for pay-as-you-go financing for unbanked Africans… Catalyst Fund backs fintech startups to boost resilience in climate-vulnerable communities.

Inclusive economy. 99minutos raises $82 million to offer e-delivery to online vendors in Latin America… Truck It In scores $13 million to digitize road freight for truckers and small businesses in Pakistan. 

The Week’s Talent

Shawn Dove, who founded Campaign for Black Male Achievement, joins New Profit as managing partner… Leslie Labruto, ex- of Acumen, joins the Marshall Impact Accelerator as director… Lauren Levine departs the Solstice Initiative, which is recruiting a new executive director… Rethink Education names Andre (Dre) Bennin, ex- of Juvo Ventures, as managing partner, and Bridget Duru, ex- of EY-Parthenon, as associate. 

Yalin Karadogan, ex- of Cinven, joins LeapFrog Investments as global head of investor solutions… Founding partners of Mondiale Impact, which launched on Tuesday, include Rosemary Addis, Dolika Banda, Mario Calderini, Karim Harji, Rajiv Lall and Laurie Spengler… Sanjiv Sanghavi, ex- of ClassPass, joins Day One Ventures as a partner focused on climate tech.

Olivia Wassenaar, Apollo’s head of sustainable investing, will lead the firm’s new sustainable investing platform… Nathalie Molina Niño of Known Holdings and Elizabeth Ross-Ronchi of American Express join Accion Opportunity Fund’s board of directors… Swally’s Nesha Mutuku joins the Lupoff / Stevens family office as an entrepreneur-in-residence.

The Week’s Jobs

Azolla Ventures is recruiting summer interns… The Anchorage Museum is hiring a director of climate initiatives and programs in Anchorage, Alaska… North Star Fund seeks a finance and operations manager in New York… SVX is looking for a remote senior associate in Canada… Y Analytics is looking for an impact associate in Washington, D.C… Mercy Corps is looking for a crypto and climate pilot lead… Pacific Community Ventures is hiring a senior credit analyst and other roles in Oakland… Salesforce seeks an analyst on its Salesforce Ventures Impact Fund.

That’s a wrap. Have a wonderful weekend. 

– Mar. 4, 2022