TGIF, Agents of Impact!
Madness and wisdom. Non-fungible tokens, or NFTs, broke into the public consciousness last week when a digital version of the artist Beeple’s Everydays – The First 5,000 Days fetched $69.3 million in a Christie’s auction. The frenzy around blockchain-enabled tokens for just about anything calls for the requisite reference to Charles Mackay’s 1841 classic, Extraordinary Popular Delusions and the Madness of Crowds. Other current exhibits might include the wild rides of stocks like GameStop, along with the spate of special purpose acquisition companies, or SPACs. “Blank-check” companies listed on the stock exchanges have raised $166 billion so far in 2021, more than all of last year.
Now comes regulation crowdfunding, which immediately roared with activity under new rules that allow startups to raise up to $5 million (see No. 1, below). Backstage Capital’s Arlan Hamilton was hardly in a quiet period as she tweeted the venture firm’s progress toward the new maximum. Some investors grumbled that the valuation of Backstage’s holding company looks very different than it did last month, when the raise was capped at $1.07 million. Then again, perhaps the crowd sometimes knows what it’s doing. When “trailblazing fund managers have the resources they need, the whole startup ecosystem benefits,” Hamilton told ImpactAlpha’s Amy Cortese. “Backstage has a fighting chance at being successful over the next decade and we’re thrilled we can share some of that upside with the crowd.” – David Bank
Impact Briefing. On the latest episode, host Brian Walsh talks with Amy Cortese about regulation crowdfunding’s big week, and we hear from Republic’s Ken Nguyen and Wefunder’s Jonny Price. Plus the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
Clubhouse conversation. We’ll be on the drop-in audio app to talk about the week’s stories and whatever’s on your mind, hosted by ImpactAlpha’s Lyneka Little. Find us on your iPhone (only, unfortunately) today at 9am PT / 12pm ET / 4pm London. Drop by.
The Week’s Big 7
1. Crowdfunding scales up. Companies like Gumroad and Backstage Capital were ready to go this week as soon as new rules raised the cap to $5 million for “regulation crowdfunding” campaigns. Gumroad, an online marketplace for artists and creators, sold out in less than a day. By week’s end Backstage, a VC firm focused on diverse founders, had raised more than $4 million, after quickly maxing out under the old limit of $1.07 million last month. Republic, one of the leading crowdfunding platforms, closed on its own $36 million raise. “We are at the early stages of a multi-decade super-cycle of retail empowerment,” said Galaxy Interactive’s Richard Kim, who led Republic’s big round. Other crowdfunding platforms rode the momentum as well. Wefunder launched its own fundraise on Honeycomb, which in turn snagged its $1.7 million in seed financing for itself.
- Financing diversity. “New crowdfunding rules set to boost investment in diverse startups and founders.”
- Big day. “Retail investors demonstrate the power of the crowd.”
- Investor demand. “Rule changes could spur $1 billion in crowdfunded investment,” by Wefunder’s Jonny Price.
2. A dozen funds catalyzing transitions to employee ownership. Funds that finance the transition of businesses to employee ownership are hitting their stride. The funds range from concessionary, mission-driven funds to private-equity funds that return 12% to 15%. “Impact investors hold the power to provide the capital and drive a revolution in enterprise ownership,” The Democracy Collaborative’s Marjorie Kelly and Kendeda Fund’s Diane Ives write on ImpactAlpha. Keep reading.
3. These Amazon investors are backing the workers. The online retailer, facing its largest-ever labor organizing challenge, has argued that unions are bad for business, bad for shareholders, and even bad for workers. Some Amazon shareholders disagree. Better treatment of workers, they say, backed up by collective bargaining, can mean better long-term outcomes for investors as well, writes ImpactAlpha contributing editor Imogen Rose-Smith to kick off her Institutional Impact column. “Defined benefit pension plans have become increasingly vocal when it comes to defending the rights of workers of companies in which they are invested.” Solidarity forever.
- Union pension funds flex their muscles in Danone drama. Artisan Partners exacted its revenge on the French food giant this week when it succeeded in ousting CEO Emmanuel Faber, a champion of sustainable business. The “activist” investor had been a skeptic, and an outlier, on Danone’s mission-driven tilt. Then CtW – that’s short for Change to Win – an advisor to union pension funds, blasted back at Artisan’s practices and defended Danone’s. Dig deeper.
4. How some corporations are driving capital to Black founders and investors. “By scaling and partnering with diverse investors and entrepreneurs, corporates can activate purpose and unlock new avenues for inclusive innovation,” corporate venture capitalists Marcelino Ford-Livene and Moses Choi write on ImpactAlpha. A sampling of corporate venture capital and other initiatives from PayPal, Salesforce, Samsung and other companies suggests major corporations are beginning to see the moral imperative of dismantling systemic racism as good business. More.
5. Impak battles: Euronext NV vs. Deutsche Börse. Montreal-based ratings agency impak pitted Amsterdam-based stock exchange Euronext NV, against Frankfurt-based exchange Deutsche Börse in the latest edition of ImpactAlpha’s Impak Battles. Notable: This is the first Impak Battle in which neither company generated any material positive impact. Dive in.
6. Upskilling Americans for the future of work. “The future of work is now,” says Angela Jackson of New Profit. The venture philanthropy firm surfaced 15 early-stage workforce solutions with a “grand challenge” involving 25,000 workers and $6 million in prize money. Collect the whole set.
7. Slam dunk. Kevin Durant is the NBA’s top scorer… on Valuation of Impact Brand Equity, or VIBE. Impact holding company CoPeace crunched two billion data points to score NBA players for positive impact. KD and his Brooklyn Nets teammate Kyrie Irving took the top two spots. Rounding out the starting five: The Warriors’ Draymond Green, the Wizards’ Russel Westbrook, and the Lakers’ LeBron James. Just do it.
The Week’s Dealflow
Inclusive economy. Digital lender Indifi scores $5 million to help India’s small businesses recover from COVID… Microinsurance startup Bimaplan raises $500,000 to provide affordable insurance in India… Nairobi-based Equity Group Holdings secures $100 million for small businesses recovering from pandemic-related disruptions… IFC backs Vinci Capital Partners to invest in small businesses in Brazil… Calvert Impact Capital makes a $10 million debt investment in Chennai-based Northern Arc Capital.
Low-carbon transition. Noon Energy secures $3 million seed funding to develop long-lasting batteries… Haiti’s Off-Grid Electricity Fund lends $80,000 to Palmis Enèji to import solar energy products… Dutch solar electric car startup Lightyear raises $48 million… U.K. pension fund Nest Corp. is investing £250 million with Octopus Renewables… Active Impact Investments closes on $41 million for investments in North America-based climate tech ventures.
Agri-food investing. Pure Harvest secures a $50 million sukuk for Middle East greenhouse expansion… Pixxel raises $7.3 million to launch satellites for agri-analytics… DFC backs Missio Invest to lend to agri-businesses run by Catholic organizations… Wefarm secures $11 million for an online platform for global smallholder farmers.
Fund news. 3X5 Partners closes $100 million to invest in global health and climate action… Ankur Capital tops up early-stage impact tech fund in India… Savannah Fund reaches first close on Africa tech seed fund… Baltimore-based investment manager T. Rowe Price launches its first impact fund.
Education and skills. Skill Struck raises $1.3 million for STEM education for under-represented K-12 students… Austin-based SchooLinks raises $7 million to support college readiness for K-12 students.
Health and wellbeing. Biotech Nano Cures snags $20 million to bring treatments for COVID-19 to emerging markets… Health tech company Unite Us scores $150 million to invest in community-based organizations focused on social care.
The Week’s Talent
Zee de Gersigny of agri-investor Victus Global Capital is appointed director of the Collaborative for Frontier Finance. She steps in for CFF’s Sarah Johnson, who is pausing her role for maternity leave… Martina Edwards of Access to Capital for Entrepreneurs Inc. joins Atlanta-based Zane Venture Fund as partner… Scott Kupor, managing partner at Andreessen Horowitz, and Katherine Lauderdale, chief legal officer of PBS, join the board of the Global Impact Investing Network.
Marla Blow, ex- of the Mastercard Center for Inclusive Growth, joins the Skoll Foundation as president and chief operating officer… Katie Drasser, ex- of the Aspen Institute, becomes CEO of Rock Health’s nonprofit arm… Visa appoints Michelle Gethers-Clark, ex- of the United Way in Greensboro, N.C., as chief diversity officer and head of corporate responsibility.
Hideki Takada is named principal counsellor of Japan’s newly established Climate Change Office… Ashley Walter, ex- of Fenwick & West, joins Orrick to advise clients on ESG issues. Perry Teicher, who leads Orrick’s impact finance and investment group, is promoted to impact finance counsel. Betsy Popken becomes sustainability and human rights counsel… Heran Getachew is promoted to director of investments at Illumen Capital.
The Week’s Jobs
OpenInvest is recruiting a senior director of business development for the E.U. and U.K. in Amsterdam… Runway is hiring a portfolio director in Oakland… Starbucks has an opening for a corporate social impact specialist in London… Cambridge, U.K.-based Raspberry Pi Foundation seeks an impact analyst… RallyAssets has openings for a manager of private investment research, senior associate of business development, and associate of client services… Alterfin seeks an investment manager for its Central Asia microfinance and sustainable agriculture portfolio, based in Bishkek, Kyrgyzstan.
That’s a wrap. Have a wonderful weekend.
–Mar. 19, 2020