The Brief | August 5, 2022

The Week in impact investing: New Voices

ImpactAlpha
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ImpactAlpha

TGIF, Agents of Impact! 

đź—Ł Proximate solutions. On issues from climate to inclusive economic growth, new voices are a source of fresh solutions. While entrenched interests push their entrenched positions on climate and taxes (we see you, Business Roundtable), new and local voices like Brandon Dennison of West Virginia-based Coalfield Development (see Agents of Impact, below) played a key role in bringing the state’s obstinate senator on board with the climate-friendly Inflation Reduction Act. The Biden-Harris administration’s use of advisory groups that have intentionally included new and diverse voices have led to quiet but important wins for low-income households, like a raft of actions last week to help expand community solar, lower energy bills and boost opportunities for diverse workers in the growing green economy. A new incubator from Common Future aims to propel the work of grassroots “policy entrepreneurs” like Baltimore’s Bree Jones and New York’s Trevor Smith to bring fresh thinking to national debates on affordable housing, reparations and democracy. More of this, please. 

In impact investing, first-time, diverse and emerging fund managers bring unique lenses to their investments. But faced with ingrained biases and outdated requirements, they often struggle to raise funds. “Reaching marginalized populations in under-represented groups requires seeding and investing in new strategies, new business models, and/or new managers,” wrote Visa Foundation’s Najada Kumbuli in a guest post. That’s one reason ImpactAlpha launched The LIIST this week with Realize Impact – to lift up funds actively raising money so they can spend more time helping companies succeed. Other voices desperately need to be heard. Developing nations, for example, face difficult choices about balancing economic growth and climate action. “We expect fair funding in exchange for the services provided by our forests,” said Eve Bazaiba Masudi of the Democratic Republic of the Congo’s, which is auctioning off oil-drilling rights in the carbon-critical Congo Basin. With seemingly impossible choices everywhere, Agents of Impacts like Common Future’s Lauren Paul remind us, “Those closest to the problem are closest to the solution.” – Dennis Price

🎧 Impact Briefing. ImpactAlpha’s Zuleyma Bebell and Realize Impact’s Luni Libes join host Brian Walsh to discuss the motivation behind The LIIST, our new monthly sampling of impact funds and companies actively raising capital. Plus, the headlines.

The Week’s Agent of Impact

Brandon Dennison, Coalfield Development: Forging a path for Appalachia’s green economy. In the roller coaster climate bill negotiations with West Virginia Senator Joe Manchin, Brandon Dennison brought something to the table that many other policy advocates couldn’t: the local impacts of a green economy. Dennison’s organization, Coalfield Development, has provided workforce stabilization, reskilling and jobs to 1,600 workers in a state racked by the coal industry’s decline. It has also helped launch several green and social enterprises, including Solar Hollar, one of the first solar companies in southern West Virginia. And it’s now leading a coalition of West Virginia universities, municipalities and other organizations called the Appalachian Climate Technologies Coalition, or “Act Now,” to grow the state’s green-collar workforce, repurpose empty manufacturing facilities, and reclaim mined land for sustainable use. “We’re a tangible example of what could be possible,” says Dennison, who was among many pressing the reluctant Democratic senator to support a climate package. “I think we had a unique place in the discussion because we’re not a policy organization, we’re a practitioner saying that this sort of policy could help us.”

West Virginia has all of the ingredients to be a leader in the green transition. Though the state is one of the poorest in the U.S., it’s long been a net exporter of energy, with an extensive power distribution infrastructure in place. It is the third most-forested state, making it a carbon sink that stands to benefit from the carbon markets. “With smart management of our natural resources, there will be good job and investment opportunities,” Dennison tells ImpactAlpha. “We’re starting to see it already, because of ESG commitments and carbon-credit trading.” Edelen Renewables, for example, a Kentucky-based developer of renewable energy and reforestation projects, is partnering with West Virginia-based The Dickinson Group to bring such projects to the state. Another opportunity: converting former mountaintop removal sites into solar farms. “We could export green energy up and down the East Coast while converting a liability and a scar on the landscape,” says Dennison. Provisions in the Inflation Reduction Act, such as solar and green manufacturing tax credits for projects in fossil-fuel communities, would turbo-charge green initiatives in the state. “Appalachia can lead the way to the new green economy,” Dennison posits. “We have unique advantages that position us to not just survive the transition from coal but actually thrive.”  

The Week’s Dealflow

Deal spotlight: Reshaping jobs of the future. The U.S. economy will add nearly 12 million jobs by 2030. New talent development solutions, inclusive workforce strategies, and worker ownership models could help determine how those jobs will look. This week, KKR announced a $950 million sale of Minnesota Rubber & Plastics to Swedish engineering firm Trelleborg Group. Under a worker-ownership program implemented by KKR when it acquired MRP in 2018, all 1,450 employees will receive cash payouts equivalent to up to two years of salary. Separately, Daivergent this week raised $3.3 million in a seed round led by Zeal Capital Partners. The New York-based company is using data to provide personalized vocational, social and life-skills training to neurodivergent professionals to prepare them for tech and corporate jobs.

  • Good-jobs dealflow. A workforce project between Social Finance and United Way Miami aims to train Miami residents and help them secure jobs that lead to economic mobility. CEI Ventures’ Good Jobs Fund raised $21.5 million to invest in companies creating good jobs for people living in rural cities. Achieve Partners, through its workforce fund, acquired Helios Consulting, a tech staffing company that provides human capital management services to employers. Last month, Achieve sold tech training venture Genuent to A&M Capital Partners. Share.

Clean energy. Australian green hydrogen company Hysata raised $29.5 million in a round led by Virescent Ventures… Blue Frontier raised $20 million for energy-storing air conditioners… Boston-based wind, solar and energy storage project developer Longroad Energy raked in $500 million from MEAG, NZ Super Fund and Infratil… Terabase Energy, a software company that helps automate utility-scale solar projects, raised $44 million in Series B funding.. 

Community finance. Connecticut Innovations will use a $120 million commitment from the U.S. Department of the Treasury’s State Small Business Credit Initiative to launch a $50 million climate fund for businesses focused on climate resilience… Denver-based New Community Transformation Fund seeks to raise $50 million to invest in minority-led, early-stage businesses in Colorado. 

Financial inclusion. Emerging market neobank Umba acquired a majority stake in Kenya’s Daraja… Mumbai-based Jai Kisan raised $50 million to provide credit and other financial services to smallholder farmers in India… South Africa’s Qwili raised $1.2 million for its low-cost point of sales devices and software designed for informal merchants.

Impact tech. Boston-based biotech company Ginkgo Bioworks purchased its competitor Zymergen in an all-stock transaction valued at $300 million… Morocco’s UM6P Ventures backed U.S. and Israeli food tech startups… Oui Capital notched an $11 million first close for its second impact tech fund… Pakistan-based DealCart scored $4.5 million to make daily essentials accessible and affordable.

Regeneration. Austin-based Smarter Sorting snagged $7 million from Regeneration.VC to help retailers and brands to scan for hazardous ingredients in their products… Copenhagen-based Agreena acquired U.K.-based Hummingbird Technologies, which uses remote sensing and AI to verify regenerative farming practices.

ESG. Proof of Impact, an impact and ESG data company, scored $6 million from Franklin Templeton Advisors, Working Capital Fund and Rakuten Capital.

Green mobility. IDB and Green Climate Fund led a $450 million fund for e-mobility in Latin America and the Caribbean… Onto raised $60 million for EVs-as-a-service in Germany. 

Impact-linked financing. Carlyle launched a decarbonization-linked financing program that will tie financing to borrowers’ achievement of climate-related targets. 

The Week’s Talent

Steve Glickman, ex- of Economic Innovation Group, joined Aspiration Global as president after advising the sustainable bank for two years… Bill Stoddart, ex- of 45North Partners, was named CEO at Iroquois Valley Farmland REIT. Christopher Zuehlsdorff joined Iroquois as chief operating officer… Santhosh Ramdoss was promoted to chief investment officer at Gary Community Ventures.

Impact Engine promoted Ander Iruretagoyena and Chris Wu from senior associates to vice presidents… Geraldine Alias, ex-of Choate Investment Advisors, joined climate-focused investment firm Three Cairns Group as a managing director… Radha Rajkotia, ex- of Innovations for Poverty Action, was named CEO at Building Markets… Genie Cesar-Fabian, ex- of Palladium Equity Partners, joined Ethic as general counsel.

Developing World Markets opened an office in Tbilisi, Georgia, with Khatia Babukhadia as its due diligence manager and data analyst, Tamar Baiashvili as credit risk manager, Levan Okradze as associate regional representative, and Zinaida Vasilenko as regional representative… Ladima Foundation selected Nsile James Uiso, Ruth Nazzinda, Adelaide Barnabas Jachi, Zuwena Hamad Othmanand, Gwantwa Lucas Mwakalinga for its six-month creative economy incubator. 

The Week’s Jobs

MCE Social Capital is recruiting a portfolio intern in San Francisco… Walton Enterprises is looking for a senior investment analyst in Denver… PowerSchool is looking for an ESG program director… Truist seeks an investment banking associate for its clean energy division in New York or Atlanta… In New York, Boundless Impact Research & Analytics is hiring a marketing intern; The Conference Board seeks a sustainability senior researcher for its ESG center; and Capital Impact Partners is recruiting a community development investment bank associate. 

The U.N.’s Climate Change High-Level Champions team seeks a financing nature lead… The Institute for Nonprofit Practice is recruiting a development coordinator in Waltham, Mass… McKinsey is hiring a manager of communications for ESG and environmental sustainability… Social Finance seeks a director of impact investments… ImpactPHL seeks a remote director of brand and narrative… Gratitude Railroad is recruiting a remote impact investing analyst… ​​Gary Community Ventures is hiring a vice president of philanthropy in Denver.

Living Cities seeks an assistant director of equitable entrepreneurial ecosystems… Big Society Capital is hiring an ESG and equity, diversity and inclusion manager in London… Social Finance seeks a vice president of impact investments in Boston, San Francisco, Austin, New York or Washington, D.C… CEI-Boulos Capital Management, a social-impact real estate fund manager, is looking for a vice president in Brunswick, Maine… Capital Group is hiring an ESG senior specialist in Los Angeles.

That’s a wrap. Have a wonderful weekend. 

– Aug. 5, 2022