The Week in Impact Investing: Reality Check

TGIF, Agents of Impact! 

🗣 Cognitive lag. This is no time to go wobbly, as former U.K. Prime Minister Margaret Thatcher said in a different context. Disruptions and disappointments can make halving greenhouse gas emissions and hitting the Sustainable Development Goals by the end of decade seem like faded fantasies. Former U.N. climate negotiator Christiana Figueres warns, “There is a severe lack of confidence that we – collectively – are up to the task.” Even well-founded nihilism is generally ill-advised, and even more so when it hasn’t caught up to the new reality, which looks instead like a breakneck race to 2030. One indicator: U.S. public spending on solar, wind, batteries, hydrogen, carbon capture and other energy-transition technology could top $800 billion, more than double the headline figure in this summer’s Inflation Reduction Act, “given the uncapped nature of tax credits and attractiveness of economics,” Credit Suisse reports in a note. The climate spending legislation, the bank concludes, “definitively changes the narrative from risk mitigation to opportunity capture.” 

For more signals, check out a dozen charts that map the path to a carbon-free economy, or what went down at the Global Clean Energy Action Forum in Pittsburgh, Pa. “No one actually believes that we can confront the climate crisis,” said BlocPower’s Donnel Baird. “We need to reignite hope.” That’s not wishful thinking. It’s a practical necessity. – David Bank

Other must-reads on ImpactAlpha:

• Investing with a refugee lens. Displaced people remake refugee camps in East Africa into testbeds for entrepreneurship and investing, reports ImpactAlpha’s Dennis Price.
  
• Actionable impact data. To understand the impact of electrifying schools in rural Colombia, ALIVE Ventures asked the experts: parents and teachers, Alan Pierce explains in a guest post.
  
• Women-led funds. First-time female fund managers in South Africa are banding together to overcome misperceptions of risks – and to raise capital for enterprises by and for women, ImpactAlpha’s Jessica Pothering reports from Cape Town. 

🎧 Impact Briefing. On this week’s podcast, Dennis Price joins host Brian Walsh to talk about new opportunities in “refugee lens investing,” and Brian shares takeaways from this week’s Agents of Impact Call, “Creative capital for gender-smart investing.” Plus, the headlines.

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

🍸 Join us for drinks in The Hague. Are you making the scene at next month’s GIIN Investor Forum? Join ImpactAlpha and fellow Agents of Impact to kick off the forum with alumni from Oxford’s Social Impact Portfolio, Tuesday, Oct. 11. RSVP today (and grab 10% off your registration for the forum with the code ImpactAGIIN10).

The Week’s Call

Agents of Impact Call No. 45: Creative capital for gender-smart investments (video). Capital to support women’s economic growth and financial inclusion is picking up – finally! – in many advanced economies. In emerging markets, female fund managers still really struggle to raise their first funds. On The Call, fund managers from South Africa, Mexico and Tunisia shared their challenges in getting investors to value their expertise and investment strategies. “We are overtrained and over-mentored and underfunded,” said Lelemba Phiri of Africa Trust Group, which is supporting women entrepreneurs and fund managers in South Africa. “We need the conversation to move from, ‘We believe in this and we think it’s something that can make a difference,’ to really putting your money where your mouth is.” Highlights from the conversation:

• Mandate mismatch. Development finance institutions have helped unlock more than $10 billion for gender-lens investing in emerging markets through the 2X Challenge. Yet DFIs remain risk-averse when it comes to betting on first-time women fund managers. “Just write the check,” said Anna Raptis, founder of Mexico City-based Amplifica Capital, which invests in women in tech. “Yes, some fund managers are going to do really well and some won’t. When you put that across an investment portfolio, you can turn out some very good results.”
  
• Investor accountability. Economic development is driven by entrepreneurs and small and mid-sized businesses. Local institutional investors avoid such investments. “Sovereign wealth funds and government pension funds are supposed to have a long-term view, they’re supposed to be thinking about where the market is going,” said GenderSmart’s Suzanne Biegel. “Hundreds of billions of dollars sit on corporate balance sheets. How do we start to unlock that?” Phiri called for a rethink of the purpose of development finance. As for gender-lens investing, she says, “if it’s about not understanding the asset class, then let’s have more conversations.”
  
• Proof points. Hannah Schiff of Developing World Markets discussed lessons from the impact investor’s integration of a gender lens across its private equity portfolio. Key insights: Built-in bias affects even companies with products intentionally designed for women, and even majority-female staffs require training to achieve gender-equitable outcomes.
  
• Read on and catch the replay.

The Week’s Dealflow

Deal spotlight: Small business lending in emerging markets. Small and medium-sized enterprises create a majority of jobs and contribute up to 40% of annual GDP in many emerging markets. Access to financing remains a major barrier for growth. In Uganda, Numida raised $12.3 million in equity and debt to provide unsecured working capital loans of as little as $100. Serena Williams’ Serena Ventures led the round, which attracted Launch Africa, Soma Capital, MFS Africa, Lendable and Y Combinator. In Peru, Wolet secured $2 million in debt funding, led by Lima-based fund manager Acorde, to expand lending services to small businesses.

• Inclusive economy. Access to financing is a challenge in the U.S. as well. Sunrise Banks, a community development financial institution based in St. Paul, Minn., secured $250 million from the U.S. Treasury Department to increase lending to small businesses in underserved communities.
  
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Clean energy. Brazilian fintech startup Solfácil secured $30 million to provide financing for solar installations to homeowners and businesses in Latin America… Mirova raised $1.5 billion for its fifth energy transition infrastructure fund… Moxion Power secured $100 million to decarbonize mobile power. 

Climate finance. AXA’s launched a €500 million initiative to invest in reforestation and land conservation… Barbados’ debt-for-nature swap unlocked $50 million to protect nature and build resilience… Maris raised $12 million from Proparco for climate resilience in Africa… SINAI Technologies snagged $22 million to help companies decarbonize their operations and supply chains. 

Electrify everything. KGIT scored $25,000 from student-led NYU Impact Investment Fund for electric vehicle charging in underserved communities in the U.S… Paris-based Bump secured $180 million to finance and install new electric vehicle charging stations for EV partners… Zeplug raised €240 million to expand outside EV charging for residential and office buildings. 

Investing in health. Indian health tech venture Molbio Diagnostics scored $85 million for early detection of infectious diseases, including tuberculosis, swine flu and HIV… OurCrowd, the Israel-based global crowdfunding platform, is looking to raise $200 million for a global health equity impact fund, in partnership with the WHO Foundation.

Return on inclusion. African Women Impact Fund secured initial $60 million for gender-lens investments… Philadelphia-based SHIFT Capital secured $1 million in equity from Woodforest National Bank to support impact-focused minority-led real estate developers… Woman-led Human Ventures scored an undisclosed commitment from Bank of America to invest in early-stage founders from diverse backgrounds.

Waste and the circular economy. Bangalore-based climate tech startup Carbon Masters scored an undisclosed amount of pre-Series A funding to turn waste into eco-friendly organic manure and compressed natural gas… Energy Capital Partners will acquire U.K.-based waste management company Biffa in a deal valued at £1.3 billion… Rentle, a Finnish online circular commerce platform for selling and renting used products, raised $3.8 million in seed funding.

Democracy and peace. Nearly a dozen independent news organizations in Nigeria get support from MDIF.

Financial inclusion. Ivorian payments startup Julaya snagged $5 million in a pre-Series A round led by Speedinvest. 

Inclusive economy. Chicago-based Bridge Money raised $5.8 million in seed financing to help low-income Americans earn supplemental income.

The Week’s Talent

Heather Zichal, the former CEO of the American Clean Power Association, joins JPMorgan as global head of sustainability… Micheline Ntiru, ex- of Stanford University accelerator Stanford Seed, joins Convergence as its Africa lead… Meg Massey, ex- of Chloe Capital, will join Upaya Social Ventures as director of strategy outreach… Kickstarter appoints Everette Taylor, ex- of Artsy, as CEO… Lisa Woll, who has served as CEO of US SIF for nearly 17 years, will step down on Jan. 31, 2023.

HSBC has added senior talent at its new Sustainability Center of Excellence, including Justin Wu, ex- of BloombergNEF, as co-head of climate change for the Asia-Pacific region; Milo Sjardin, also ex- of BloombergNEF, as managing director and head of climate analytics; and Susannah Fitzherbert-Brockholes, ex- of PwC, as director of sustainable finance… Haydee Moreno, chief operating officer at JUST, the Austin-based financial services organization for women, is named co-founder and joins the board of directors.

The Week’s Jobs

Catalytic Capital Consortium, or C3, is hiring a remote program officer for grantmaking… The Bill & Melinda Gates Foundation seeks a senior program officer for solution delivery in Seattle… The Rockefeller Foundation is recruiting a manager of innovative finance in New York… Also in New York, Syntax Indices is looking for an ESG associate… The Schmidt Family Foundation is hiring a senior associate for impact investing in San Francisco or Los Angeles.

DFC seeks a senior equity investment policy officer in Washington, D.C… Bamboo Capital Partners is hiring a fund financial manager in Luxembourg… The World Health Organization is looking for a specialist for information management… Arctaris Impact Investors is recruiting a private equity credit analyst or an associate for its deal team in Boston… LISC seeks an assistant general counsel for government contracts in New York.

BerlinRosen is hiring an account supervisor for global social and economic impact in Los Angeles… Economic Innovation Group seeks a policy associate… Habitat for Humanity International is hiring a government relations and advocacy project manager… Opportunity Finance Network is recruiting a senior associate for government relations and an impact investing intern… Airlink seeks a humanitarian programs associate.

TruFund Financial Services is looking for a national director of New Market Tax Credits in New York… Target seeks a sustainability insights manager, a director of sustainability policy and compliance, and a senior manager of sustainability governance and risk… USDA is hiring a remote agricultural market reporter in San Francisco and a loan analyst and a lead program specialist elsewhere in the U.S.

That’s a wrap. Have a wonderful weekend. 

– Sept. 30, 2022