The Week in Impact Investing: Thinking Bigger

TGIF, Agents of Impact! 

🗣 Utopia now. Burners are a resilient bunch. As they trickled back into normie life this week, many already were spinning tales of muddy boots, sunken cars, overflowing portapotties and adventurous liaisons into Burning Man legend. That may obscure the reevaluation that was underway even before the unseasonal desert deluge (climate change is real!) and the arrest of climate protesters as the annual arts festival got underway. Black Rock City, built on radical sharing and free expression, is “pretending to be a utopia, but actually becoming increasingly dystopian,” 30-year Burning Man veteran Adriana Roberts wrote two weeks ago, announcing this year’s burn to be her last. Might it be time to build utopia not as a pop-up city for a week every summer, but in real cities, all year long? In an essay on ImpactAlpha, Democracy Collaborative’s Marjorie Kelly, out with a new book “Wealth Supremacy,” called out impact investors and sustainability financiers not only for the inadequacy of half-measures, but for thinking too small. “Those of us seeking change have yet to coherently, collectively dream of a next system,” Kelly says. “We’re not dreaming at the scale of the problem.”

The distance between the real and the ideal is as old as Plato. Like Burning Man, the origins of SOCAP, next month’s social capital markets conference in San Francisco, were radical, a movement “untethered by the norms of capitalism,” as Robert Munson tells me on this week’s Impact Briefing podcast. “I think it’s important to still be a home to new and, yes, radical notions of what we should be in our world,” he says, and also to “combine that with executing and scaling, not just ideating.” Impact fund managers are executing and scaling, as reflected on this month’s Liist of impact funds currently raising capital, which includes five funds with nine-figure targets. The smallest fund, however, may have the biggest idea, as Roodgally Senatus details in his profile of the De-Carceration Fund’s Christopher Bentley (see Agent of Impact, below). Nowhere is the scale of the problems bigger than in Africa; that makes African solutions major opportunities as well. The world needs Africa’s help in the climate fight just as much as Africa needs the world’s, ImpactAlpha’s Jessica Pothering and contributor Lucy Ngige report from the Africa Climate Summit in Nairobi. A next system built on that kind of radical collaboration, globally and locally, could build, if not utopia, then an inclusive, abundant 21st century. It’s time to dream at the scale of the opportunity. – David Bank 

🤝 Let’s meet at the GIIN Impact Forum. Kick off the networking in Copenhagen with drinks with ImpactAlpha, along with Oxford’s Saïd Business School and Founders Factory Africa, Tuesday, Oct. 3, at the National Museum of Denmark’s Glass Hall. RSVP today.

The Week’s Podcast

🎧 Impact Briefing. David Bank catches up with Robert Munson, president of SOCAP and managing director at the Sorenson Impact Center, who is putting together next month’s gathering in San Francisco. Plus, host Brian Walsh has the headlines.

• Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
  
• Throwback podcast. Together at last year’s SOCAP, Monique Aiken, Rodney Foxworth and David Bank recorded, “SOCAP is back.”
  
• Register. Use the code “s23_impactalpha” to save $250 on your ticket to SOCAP23 in San Francisco, Oct. 23-25.

The Week’s Agent of Impact

Christopher Bentley, De-Carceration Fund: Lifting ‘justice tech’ entrepreneurs. In 15 years in impact investing, Christopher Bentley noticed “a lot of for-profit companies focused on the criminal justice system that were bad actors, using extractive business models or perpetuating a bad system by virtue of the way they did business.” Bentley and co-managing partner Lawrence Williams lead the De-Carceration Fund, which is raising a $25 million fund to back a dozen or more companies with innovative solutions to disrupt the US criminal justice system the US criminal justice system. “I wanted to find innovators building solutions to drive the changes that we want to see in the system, as opposed to the changes we don’t want to see,” Bentley tells ImpactAlpha. 

Bentley came up through Philadelphia’s network of impact investing organizations, working on Murex Investments’ good-jobs portfolio and SustainVC’s Patient Capital Collaborative. He served as a fund manager at Josh Mailman’s venture firm Serious Change Investments and as a program director for Investors’ Circle (now the American Sustainable Business Network). Along the way, he spotted a handful of companies focused on criminal-justice reform, including Pigeonly, now a De-Carceration Fund portfolio company. “I started thinking about why isn’t there a business sector that’s really focused on this in the impact world?” Bentley says. The De-Carceration Fund has backed four early-stage justice tech companies, including Uptrust, which connects defendants with family members, public defenders and probation officers, and Untapped Solutions, which provides reentry services to formerly-incarcerated people. Half of De-Carceration Fund’s investment committee is made up of impact investors; the other half are people who were formerly-incarcerated.

• Keep reading, “Lifting ‘justice tech’ entrepreneurs,” by Roodgally Senatus on ImpactAlpha and share the story on Instagram.

The Week’s Dealflow

Deal spotlight: Scaling green steel. Investors are reversing a slowdown in climate tech funding to address some of the thorniest decarbonization challenges. Sweden’s H2 Green Steel pulled in €1.5 billion ($1.6 billion) to build a large-scale green steel plant in Boden, Sweden that by 2026 will use green hydrogen produced on-site. Led by Swedish investor Altor, Singapore’s GIC, Hy24 and Just Climate, the deal is the largest private investment in Europe this year. The raise “marks the start of industrial scale decarbonization of basic materials production,” said H2’s Otto Gernandt.

• Electrifying steel. The blockbuster deal follows Boston Metal’s $262 million raise to commercialize its renewable energy-powered electrochemical process for making green steel. Boston Metal also is looking to begin commercial production around 2026. Investors in Boston Metal’s Series C round included ArcelorMittal, BHP Ventures, Breakthrough Energy Ventures, and Microsoft’s Climate Innovation Fund (see, “Boston Metal hauls in $262 million for green steel and metals”).
  
• Cost curves. Corporations are demanding low-carbon steel – and helping drive costs down the curve. The three dozen companies that are part of SteelZero have pledged to procure 100% green steel by 2050. BMW, Electrolux, Mercedes-Benz, Cargill Metals and other customers have signed offtake agreements with H2 Green Steel even before commercial production. Another boost comes from the Inflation Reduction Act’s green hydrogen subsidies, which could make the US among the lowest cost producers of zero-carbon steel.
  
• More. 

Agrifood investing. CH4 Global raised $29 million to reduce livestock methane emissions… Israel-based ViAqua Therapeutics snagged more than $8 million to develop feed for disease prevention in aquaculture… Omnivore sold its stake in Barrix to Sumitomo to notch another exit. 

Climate finance in Africa. Bezos Earth Fund will deploy $22.8 million for locally-led landscape restoration in Africa… Catalyst Fund raised $8.6 million for climate adaptation in Africa… FSD Africa allocated $19.5 million to support climate adaptation and resilience in Africa. 

Energy transition. Energy Foundry is looking to raise a $100 million fund to invest in clean energy companies… Israeli fusion energy venture nT-Tao snagged $22 million financing to develop and test a compact fusion reactor… Lydian secured $15 million to produce zero-carbon aviation fuel… The UK’s Bridgepoint Group is getting into energy transition infrastructure with the acquisition of Energy Capital Partners. 

Fund news. Adenia Partners said it is on track to exceed its $400 million target for its fifth fund… Infinity Recycling’s Circular Plastics Fund secured €50 million from the European Investment Fund… Women-led Unconventional Ventures crossed the half-way point to its target of €30 million. 

Green packaging. Chicago-based eco-friendly packaging manufacturer Cirkla snagged $3 million in pre-seed funding… Finland’s Paptic scored €23 million for sustainable packaging materials. 

Good jobs. Mentra scored $3.5 million in a seed round to build a hiring platform for neurodivergent professionals… Peru’s ELSA secured a revenue-based loan from IMPAQTO Capital to help prevent sexual harassment in the workplace. 

Media independence. Pluralis acquired an additional 13% stake in Poland’s Gremi Media.

The Week’s Talent

Richard Newell will step down as president and CEO of the environmental think tank Resources for the Future later this year… Mack Schow, ex- of German Investment Corp., joined Adenia Partners as head of investor relations… Waleed Elgohary, ex- of CPP Investments, joined Apollo Global Management in London to focus on climate investments… Kanarys appointed Google’s chief diversity officer Melonie Parker to its board of directors.

The Week’s Jobs

💼View dozens of other jobs on our new job board. Want to post a listing? Submit it here.

US jobs

In New York: KKR Global Impact seeks a senior manager… Neuberger Berman is hiring an investment ESG associate… Next Street has an opening for a capital advisory manager… The Investment Integration Project is hiring a commission-based salesperson for SaaS platform subscriptions.

Social Finance is looking for an associate in Boston… The Nature Conservancy is on the hunt for a business innovation manager to focus on ocean and climate in Arlington, Va… Mission Driven Finance is recruiting an Indigenous Futures director. 

Global locations

Matrix Renewables is hiring an accounting analyst in Madrid… Low Carbon is recruiting an onshore wind investment manager in London… Triodos IM is recruiting a senior legal counsel in the Netherlands.

Platinum Pacific Partners seeks a responsible investing and impact director in Sydney… GenZero has openings for a nature-based solutions vice president and an investment strategy senior associate in Singapore… Northern Arc Capital seeks a senior associate of impact and ESG in Mumbai.

That’s a wrap. Have a wonderful weekend. 

– Sept 8, 2023