TGIF, Agents of Impact!
🗣 Great expectations. When it comes to the zeitgeist, it’s best not to get too attached. A month ago, resisting defeatism seemed to be as good as it was going to get. Now, irrational exuberance may be a bigger danger. The Inflation Reduction Act already has reset the narrative around climate action and lifted the prospects of heat-pump makers, solar developers and energy-retrofit installers, ImpactAlpha’s Amy Cortese and Dennis Price wrote this week. But the messy and secretive process that brought the legislation back from the dead means “the bill has the good, the bad and the ugly,” as one climate investor told ImpactAlpha. The challenge now is to channel the momentum and the capital for climate action into an inclusive movement for climate justice.
Reaching one goal only raises the bar for others. As fintech startups and microfinance lenders have found ways to support the tiniest businesses, the capital gap for locally owned small businesses with five to 100 employees has only become more apparent. In Uganda and Kenya, Balloon Ventures is bundling checks of up to $25,000 with technical assistance to bank that “missing middle,” as ImpactAlpha’s Jessica Pothering reports. The success of specific impact enterprises creates even greater urgency for investments that create new markets and drive systemic change, Matt Bannick argues in the latest post in ImpactAlpha’s series, “Frontiers of Social Innovation.” High-risk and high-return impact opportunities need to be complemented with steady and replicable fixed-income investments that can channel more capital to basic human needs, writes Carrie Endries of Reynders, McVeigh Capital Management.
Follow the solutions. While many institutional investors drag their heels on fulfilling their pledges, the advocacy group Ceres has rounded up 20 case studies of institutional investors using “climate action plans” to begin to align their portfolios with net-zero goals via investments, engagement, policy and disclosure, Kristen Spalding explains. Impact fintech firm Forage is enabling online grocers to help more people in the U.S. access federal SNAP benefits, better known as food stamps. The Inflation Reduction Act includes funding the national and local green banks, which many advocates have pushed for for more than a decade. That just lays the groundwork for a new effort to ensure such capital reaches, and includes, the communities that need it the most. – David Bank
🎧 Impact Briefing. Host Monique Aiken is joined by Amy Cortese, who has been talking to investors such as Full Cycle’s Stephan Nicoleau about how the Inflation Reduction Act has reset the climate table. Plus, the headlines.
- Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
The Week’s Sustainable Living
Sustainable late-summer swaps. Close out the summer in style… and feel good about it. Climate & Capital has rounded up a list of sustainable alternatives to summer staples that will help lower your environmental impact. Our favorites:
- Stream2Sea sunscreen. The Protect Land + Sea-certified skin protection is the “first and only” mineral sunscreen proven safe for freshwater and saltwater fish and even coral larvae. Lather up.
- Spirare surfboards. Artist and surfer Kevin Cunningham has more than a dozen board styles made from recycled wood, ocean plastic waste and other alternative materials. Get stoked.
- OluKai sandals. Hawaiian brand Olukai uses recycled rubber and eco-leather to craft a range of water-safe footwear for men and women. A donation to Ama OluKai Foundation is made with each purchase to support Native projects. Slip ’em on.
- Leaf Shave razors. The no-plastic razors last a lifetime with replaceable, recyclable blades. Fall in love.
- Sustainable sunglasses. Options are proliferating, including bamboo-made shades from Swell Vision; Mita sunglasses made from recycled aluminum and water bottles; and Pala, which uses biodegradable acetate and recycled plastic.
- Get the full list at Climate & Capital.
The Week’s Dealflow
Deal spotlight: Food waste solutions. Companies and governments are recognizing the cost savings of curbing food waste, as well as the social and climate benefits. That’s creating an opportunity for investors, which are plowing increasing amounts of capital into food waste deals. Average private investment deal size has grown from less than $5 million in the early 2010s to roughly $17 million in 2021, according to the food waste nonprofit ReFED. This week, San Francisco-based Afresh raked in $115 million to help grocers reduce food waste by managing fresh food inventory and sales. The food waste space has “benefited greatly from climate funders making the connection between food waste reduction and climate change mitigation,” ReFED’s Alejandro Enamorado wrote in ImpactAlpha.
- Follow the money. In June, Bogota-based RobinFood raised $32 million to expand food access and cut waste. Finland’s Relex Solutions in February hauled in $568 million to help grocers meet consumer demand more efficiently. Among funds, Green Generation Fund raised €100 million this week to back food and green-tech ventures, and in May, ReFED and Closed Loop Partners launched a set of funds to catalyze capital for more food waste solutions.
- Share this post. And take a spin through all of our food waste coverage.
Financial inclusion. Black woman-led Hive Wealth, a financial app addressing the racial, gender and generational wealth gaps, secured an undisclosed investment from SVB Financial Group… Ghanaian fintech venture Zeepay snagged $10 million in a Series A round from Symbiotics and an undisclosed investor… Kenyan fintech venture FinAccess scored $500,000 to provide software to non-traditional financial institutions in Africa… India’s Jodo raised $15 million to help schools and families cover the costs of education.
Clean energy. Beacon Power Services snagged $2.7 million to provide data and grid management services to electric utilities in Africa… Project Solar raised $23 million to provide low-cost solar installations to homeowners… Utility Global secures $25 million to convert waste streams into low-cost and low-carbon hydrogen.
Climate finance. InfraCo Africa, the Africa-focused development arm of the Private Infrastructure Development Group, invested $43 million to launch a climate infrastructure fund… INVL raised €81.3 million ($83 million) to invest in sustainable forest and farmland in Central and Eastern Europe and the Baltic Sea region.
Impact tech. Forage secured $22 million to help low-income Americans order groceries online… Produze scored $2.6 million to connect India’s smallholder farmers to international retailers… Raincoat scored $4.5 million to scale disaster insurance in the Caribbean and Latin America… Ting Internet secured $200 million for communication infrastructure in communities.
Education and skills. Bacon, an on-demand app for gig workers, clinched $8 million in Series A funding… Betterplace secured a $12 million convertible note from Jungle Ventures to expand its blue-collar workforce management platform.
Investing in health. Cera Care raked in $320 million to deliver home health services to the elderly… Mexico-based women’s health startup Daisies acquired Aplícate, a personalized mental health and nutrition app for employees.
Low-carbon transition. Orange EV raised $35 million to meet the growing demand for its heavy duty electric and zero-carbon trucks… The International Finance Corp. will lend €8.1 million and help secure matching funds from other lenders for Zener’s low-carbon cooking stoves in Togo.
Creative economy. Black women-led Clutch scored $1.2 million in a round led by Precursor Ventures to build a digital marketplace that focuses on content creators of color.
Returns on inclusion. London-based venture fund Cornerstone VC secured €20 million to invest in up to 40 underrepresented founders in the U.K.
The Week’s Talent
Generate Capital promotes Peggy Flannery and Pietro Lomazzi to managing director of investments. Alex Raksin, ex- of Oaktree Capital, joins Generate, also as managing director of investments. Greg Richards, ex- of Energy Impact Partners, joins as managing director of credit… Yvonne Ofosu-Appiah of Wangara Green Ventures joins Impact Investing Ghana’s board of directors… Balderton Capital hires Elodie Broad, ex- of Deloitte, as its first head of impact and sustainable future goals.
Shashank Churukanti, ex- of SpaceX, joins Evergreen Climate Innovations as a venture associate… David Mathewson, ex- of Small Enterprise Assistance Funds, joins Quona Capital as partner and COO… Mekaelia Davis, ex- of Surdna Foundation, will join Ballmer Group as director of Black Family Economic Mobility… Benjamin Downing, consultant and former Massachusetts governor candidate, joins The Engine as vice president of public affairs.
Third Sphere’s Stonly Baptiste joins Impact Capital Managers’ board of directors… Kerry Constable, ex-of Google, joins Standard Chartered to lead its net-zero and sustainability strategy… Summa Equity’s Tommi Unkuri, Gustavo Salem and Nick Roelofs will lead U.S. operations in a new office in Palo Alto, along with investment director Anna Ryrberg.
The Week’s Jobs
Pacific Community Ventures seeks a chief financial officer and a research analyst in Oakland… AgroCenta Technologies is looking for a remote chief financial officer… RMI’s Climate Intelligence Program is hiring a carbon markets manager in Boulder, Colo… New Story is looking for an impact investment senior manager in Mexico City.
Human Rights Watch is hiring a researcher of climate displacement in New York… The Estée Lauder Companies is recruiting a manager of sustainability and climate action in New York… UNDP seeks an English-speaking impact investing researcher for a six-month internship in Istanbul… UBS is hiring a writer to create sustainability and impact investing content in London.
That’s a wrap. Have a wonderful weekend.
– Aug. 12, 2022