TGIF, Agents of Impact!
🗣 Guaranteed impact. Markets aren’t perfect, but they’re not stupid (h/t MacArthur Foundation’s Debra Schwartz). Fix the reasons capital isn’t flowing to where it can do good and markets respond. Capturing carbon still too costly? Guarantee a buyer and catalyze the sellers. The advanced market commitment of nearly $1 billion for carbon removal from Frontier, the collaboration of Stripe, Spotify and other corporations, sent a powerful signal: “Build and we will buy,” as Stripe’s Nan Ransohoff put it. That was quickly followed by the launch of a $350 million carbon-capture tech fund from Chris Sacca’s Lowercarbon Capital (and came on the heels of last week’s $650 million raise by carbon-collection leader Climeworks). Slowly, and now all at once, there’s a market for carbon capture.
Think vaccines. Or EVs. Or contraception in emerging markets. Agents of Impact, in both the public and private sectors, have used advance market commitments, loan guarantees, first-loss reserves, and other levers of risk and return to build critical markets. Up next: Equitable adaptation to the changing climate. As ImpactAlpha reported this week, climate-smart innovations for smallholder farmers already are investable; coming up are climate adaptation co-benefits and ecosystem restoration. Nuveen sent a bullish signal with a commitment to deploy $100 million through Shell Foundation for agri-renewables, agri-finance, energy for business, mini-grid renewables, mobility and off-grid utilities. Nuveen’s Rekha Unnithan will join Tuesday’s Agents of Impact Call, “Catalyzing climate capital for adaptation and equity.” (RSVP now.)
Market making can be messy, especially as commercial capital arrives and expectations soar. Growth pressure can hurt poor customers, as Bloomberg reported of the growing pains of the pay-as-you-go solar market in Africa. Employees can be subject to bullying and abuse, as West Africa Weekly uncovered at Nigerian fintech Flutterwave. The major owner of a key aluminum producer could be a Russian oligarch under sanctions, as ImpactAlpha’s Imogen Rose-Smith detailed in “The curious case of the U.S. ESG critic at the head of a Russian aluminum conglomerate.” New performance benchmarks and indices from the Global Impact Investing Network and 60 Decibels are delivering data the market needs to validate real impact. Making markets for impact takes creativity – and accountability. – Dennis Price
🎧 Impact Briefing. Host Monique Aiken and ImpactAlpha’s David Bank preview next week’s call on catalyzing climate capital for adaptation and equity, and we hear from Jonathan Phillips of Duke University’s Rogers Energy Access Project on social “co-benefits.” Plus, the headlines.
- Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
👋 Next Call: Catalytic climate capital for adaptation and equity. Solutions designed by and for low-income countries and communities will be key to surviving the climate catastrophe. Financing mechanisms for scaling equitable climate adaptation are coming into focus. Join Nuveen’s Rekha Unnithan, Lightsmith Group’s Jay Koh, Apollo Agriculture’s Benjamin Njenga, USAID’s Songbae Lee, Resilience Capital Ventures’ Gillian Marcelle and other Agents of Impact to explore strategies for catalyzing adaptation finance and equity.
- Answer The Call, Tuesday, Apr. 19 at 10am PT / 1pm ET / 6pm London. RSVP today.
- Background reading. “Social ‘co-benefits’ and ecosystem restoration begin to make climate adaptation investable,” and “Climate change spurs innovation in finance as smallholder farmers struggle to adapt.”
The Week’s Agent of Impact
Maya Winkelstein, Open Road Alliance: Helping social enterprises through ‘OMG moments’. If it feels like one calamity after another, put yourself in Maya Winkelstein’s shoes. Open Road Alliance, which Winkelstein has led for a decade, steps in with financing to bridge social enterprises through “unexpected OMG moments.” The setbacks range from the mundane (bureaucratic delays) to the momentous (Brexit, COVID, Ukraine). For over 10 years, Open Road has kept at least $800 million worth of impact on track with $70 million in grants and short-term bridge loans to more than 300 social impact organizations. Winkelstein helped shape the strategy as a consultant to philanthropist Laurie Michaels, who wanted to help social impact groups get “unstuck.” When the two-year gig was up, Michaels tapped Winkelstein to run Open Road.
Now, Winkelstein is handing over the reins to longtime deputy Caroline Bressan, a veteran of Calvert Impact Capital and Dalberg Advisors. Bressan spearheaded Open Road’s move into lending and launched its first fund. Her goal: to 10X Open Road’s lending. “This is a billion-dollar market annually in bridge loans, and we’re hoping to step up and fill as much of that gap as we can,” says Bressan, who joined last month’s Agents of Impact Call on political risk. Winkelstein will stay on as an advisor. “Building Open Road has been the dream job of a lifetime,” says Winkelstein. With Michaels, she’s cooking up a new project to address climate impacts in Louisiana. “So I’m not going too far outside of the Open Road family,” she says.
- Keep reading, “Maya Winkelstein, Open Road Alliance: Helping social enterprises through ‘OMG moments’,” by Amy Cortese on ImpactAlpha and share the story on Instagram.
The Week’s Dealflow
Deal spotlight: Inclusive fintech. Local fintech ventures are raising capital from global investors to provide online financial services in markets where most adults are underbanked. Blue like an Orange provided $10 million in loans to Peruvian fintech Acceso Crediticio, which makes asset-backed loans to help taxi drivers, truck owners and fleet operators convert their vehicles to natural gas. Sigo Seguros scored $5.4 million to provide equitable auto insurance. In the Philippines, Voyager Innovations raised $210 million from investors, including KKR and the International Finance Corp., to launch cryptocurrency, micro-investments and insurance products. Voyager’s Shailesh Baidwan cites “pent-up demand for digital financial services.”
Investing in water. Brooklyn-based Wisewell raised $2 million in pre-seed funding to develop a filtration system to remove chemicals, microplastics and other contaminants from tap water… Waterplan snagged $7 million to help companies manage water-related risk… Terradepth scored $20 million to map the earth’s oceans… Aclarity snags $3.3 million in seed funding to purify water from PFAS, “forever chemicals” that can cause decreased fertility, liver damage and cancer.
Circular economy. Berlin-based Grover snagged $330 million to expand tech rentals and reduce electronic waste… Swiss venture firm Emerald Technology Ventures is looking to raise $217 million for a sustainable packaging fund… Natural Fiber Welding raised $85 million for sustainable textiles and materials.
Climate finance. Commonfund Capital debuted a $233 million environmental sustainability fund… Egypt’s Pylon scored $19 million in seed funding to build digital infrastructure for water and electric utility companies in emerging markets… Nuveen and Shell Foundation will deploy $100 million for climate resilience in emerging markets.
Low-carbon transition. Stripe led a $925 million ‘advance market commitment’ for carbon removal… Enerkem raked in $255 million to produce biofuels from non-recyclable waste for hard-to-decarbonize sectors, such as air and sea travel… Continental Blue Investment Ghana secured $7.5 million to decarbonize cement production and create local jobs.
Smallholder farmers. Lizard Earth secured $550,000 in debt capital from Acumen to source organic cocoa beans from smallholder farmers in Sierra Leone… Pahal Financial Services scored $10 million from GAWA Capital and Northern Arc Capital to provide microloans to small-scale farmers in India.
Agrifood investing. Choco, also in Berlin, raised $111 million to connect restaurants and suppliers to reduce food waste… General Mills invested $15 million in Fearless Fund and Supply Change Capital.
ESG. Accenture acquired U.K.-based sustainability consultant firm Avieco to build out its ESG measurement and reporting capabilities… GoImpact, a Hong Kong-based ESG and sustainable finance learning platform for executives, closed a Series A financing round.
New funds. Bangalore-based Menterra’s second social impact fund reached a $30 million first close to invest in early-stage investments in healthcare, education and agriculture… Wireframe Ventures raised $77 million for early-stage health and climate investments.
Small businesses. Atlanta and London-based Capital on Tap secured $200 million for small and mid-sized businesses in the U.K. and U.S… Melior Equity Partners secured $174 million to bridge the financing gap for small and mid-sized businesses in Ireland.
Clean energy. The Netherlands Enterprise Agency and London-based Charm Impact joined forces to invest in expanding the use of clean cookstoves in Africa.
Investing in health. Vytalize Health raised $50 million in a Series B financing round to deliver personalized and value-based primary care to seniors.
The Week’s Talent
Matt Trevithick, ex- of Google Quantum AI, and Rachel Slaybaugh, co-founder of Good Energy Collective, join DCVC to focus on climate investments… Lance Uggla, ex- of IHS Markit, joins General Atlantic as CEO of BeyondNetZero… Elizabeth (Beth) Lowery, ex- of ERM, joins Piva Capital as senior advisor; Daryl Kennedy, ex- of The Investment Association, joins as investor relations and ESG manager… Susannah Vickers, former New York City assistant comptroller for pensions, joins Lafayette Square Foundation as executive director… Pamela Alexander, ex-of Ford Motor Co., joins KKR as managing director and head of corporate citizenship.
Javier Manzanares, ex- of the Green Climate Fund, is named co-CEO of ClimateCoin… Liesel Pritzker Simmons succeeds Charly Kleissner as board chair at ImpactAssets. The impact investing firm also added Radicle Impact’s Daniel Skaff to its board and Illumen Capital’s Daryn Dodson to its external investment committee… Tom Woelfel, ex- of Pacific Community Ventures, joins HCAP Partners as senior director of impact… Ben Beachy, ex- of the Sierra Club, moves to BlueGreen Alliance as vice president of industrial policy.
The Week’s Jobs
Climate investing hiring boom: Chris Sacca’s Lowercarbon Capital is looking for a chief of staff… Wellington Management is hiring a venture associate for climate innovation in Boston… Voyager Ventures seeks an associate in San Francisco, New York or Boston… Blue Bear Capital is hiring a venture capital associate in Los Angeles… Toyota Ventures seeks a remote portfolio engagement lead for its climate fund.
MCE Social Capital is hiring a communications and business development associate… The Center for Economic Democracy in Boston seeks a senior director of capital strategies… Kirchner Fellowship is accepting applications for its impact investment training cohorts for university students in Mexico, the Americas, and at Historically Black Colleges and Universities.
Candide Group seeks a portfolio operations manager in Oakland or remote… Ajax Strategies is hiring a senior associate… Amani Institute is looking for post-grads to apply for its social innovation management program, which includes three months in Nairobi… Morgan Stanley is recruiting a sustainability reporting director in New York.
That’s a wrap. Have a wonderful weekend!
– Apr. 15, 2022