The Week in impact investing: Urgent impact



TGIF, Agents of Impact!

The Week’s Agent of Impact

Thea Messel, Unconventional Ventures. Nordic countries get consistently high scores for social progress but venture capitalists there have a surprisingly poor record for financing female founders and other “underrepresented entrepreneurs.” Thea Messel is moving into that capital gap to capture what might be called ‘diverse-founders alpha.’ Investing in entrepreneurs overlooked or underestimated by other investors is the thesis of U.S. funds like Arlan Hamilton’s Backstage Capital, Kesha Cash’s Impact America Fund and Henri Pierre-Jacques and Jarrid Tingle’s Harlem Capital. Messel launched the idea in Copenhagen this week with Unconventional Ventures, a micro-fund for women, people of color, LGBTQ and immigrant entrepreneurs in Nordic countries like Denmark, Sweden and Norway. At Danske Bank, Messel was part of a small team of “corporate entrepreneurs”; one project, pitch events for all-female founders, gave her the idea to start a fund. “We were a bank with an unpopular brand, in a competitive space for banks to break into,” she recalls. “Yet despite that we received this amazing dealflow.” At an entrepreneurship event in Sweden last summer, she met Hamilton, who became her first investor and advisor.

Messel grew up in Oslo, studied philosophy and economics at Copenhagen Business School, and joined Danske to pursue “green” investing. “It was so hard to get those decisions through,” she recalls, “I felt like I was banging my head against the wall.” On the side, after her first child, she co-founded a sustainable clothing brand for busy mothers. Early support from Hamilton and LEGO Ventures’ Alexis Horowitz-Burdick helped attract 60 investors for Unconventional Ventures, some cutting checks as small as €500. The €125,000 micro-fund will make tiny, but crucial, early investments to demonstrate the value of underrepresented founders solving unmet challenges. “We believe that underrepresented founders present one of the biggest market opportunities today,” declares Unconventional’s website. Don’t underestimate the fund’s own female founder. Says Messel, “We’re creating an ecosystem of allies who would love to support each other.” – Amy Cortese

The Week’s Big 6

1. Battle of the Opportunity Zone narratives. Investigative reporters have raked the muck for Opportunity Zone opportunists who are working the angles to qualify their projects for the bill’s capital gains tax breaks. Also worthy of attention: Stories of Opportunity Zone capital providing a lifeline for local industries affected by the trade war, financing to repurpose blighted buildings, and a way for mayors to put their cities on the map. Shaping the market.

2. ‘Overthrowing the dictatorship of profits’ (podcast). Sir Ronald Cohen has words for critics of impact investing from both the left and the right. “We’re putting impact by profit’s side to keep it in its place.” Cohen spoke with ImpactAlpha’s David Bank from the GSG Impact Summit in Buenos Aires. The popular protests that forced the summit’s relocation from Santiago, Chile, Cohen said, added “poignant urgency” to impact investing’s mission. Read on and listen to the podcast interview.

  • Activist impact investors. Impact investors need to start speaking the language of social and environmental justice, says ImpactAlpha contributor Meg Massey.

3. Environmental sandboxes. Innovators in finance and energy can skirt regulations to test new ideas – legally. Controlled experimentation in “regulatory sandboxes” could speed innovation in environmental restoration as well, argues Phoebe Higgins of the Environmental Policy Innovation Center. Dig in.

4. Social-izing stock markets. The U.K.’s Labor Party wants to delist from the London Stock Exchange companies not adequately addressing climate change. Social stock exchanges, launched or proposed, in Canada, India, Jamaica, Scotland, Singapore and the U.S. are niche, but listings are on the rise. Take stock.

5. Multilateral banks try to bridge climate financing gap. Multilateral development banks are bailing on fossil fuels and ramping up green project financing. The World Bank and the European Investment Bank are ahead of their targets, but almost no bankers are moving fast enough. Overall, climate financing fell 11% last year. Onward.

6. Managing mission drift. The impact strategies of startups can evolve with growth, sometimes out of necessity and sometimes because the impact mission wasn’t fully baked in after all. In a guest post on ImpactAlpha, Uma Sekar of Capria, which invests in emerging markets impact fund managers, offers investors a roadmap for managing mission drift in their portfolios. Check it out.

The Week’s Dealflow

Catalytic capital. Memphis launches early childhood education pay-for-success program… Stone Family Foundation backs $10 million sanitation impact bond in Cambodia… European Commission backs €70 million in guarantees for African impact entrepreneurs.

Gender lens. Alitheia and IDF Capital raise $20 million for African gender-lens fund… Netherlands’ top banks invest in €21 million women-focused fund.

Food and agtech. Australia’s Tenacious Ventures raises A$16 million for sustainable ag fund… ResponsAbility invests in India’s Wingreens Farms… Ethical meat startup Crowd Cow raises $15 million… Ellen DeGeneres and Portia de Rossi back vegan dairy startup Miyokos.

Well being. TeiaCare secures €1.1 million to help nurses keep tabs on senior patients… Medikabazaar raises $16 million for India’s medical supply chain.

Circular economy. Leyline backs waste-to-fuel facilities in Philadelphia and New Jersey… AMP Robotics raises $16 million to automate recycling sorting.

Creative economy. Kimaï snags €1.1 million for ethical jewelry designs.

Education and jobs. Impact Engine focuses on the future of work with $25 million second fund.

Personal finance. Fundopolis launches to jumpstart local equity crowdfunding.

The Week’s Talent

Miriam Warren (Yelp), Tyler Nickerson (Amalgamated Bank) and Alexandra Aquino-Fike (East Bay Community Foundation) join CommonFuture’s board of directors… Jit Bhattacharya joins Factor[e] Ventures in Nairobi… Amy Duffuor and Michael Campos join Prime Impact Fund… Jim Egan joins the board of Media Development Investment Fund… Nuveen’s Vijay Advani moves to executive chairman as Jose Minaya steps up to CEO; Rekha Unnithan and David Haddad are Nuveen’s co-heads of impact investing.

The Week’s Jobs

The Global Impact Investing Network is hiring an Australia liaison… Confluence Philanthropy is looking for a development manager in Oakland… Big Society Capital is looking for an investment director in London… Prime Coalition is hiring for the PRIME Impact Fund in Cambridge, Mass… Lemelson Foundation is hiring a chief financial and administrative officer… Media Development Investment Fund seeks two evaluation consultants.

Acumen Latam Capital Partners seeks a senior portfolio associate in Bogotá… Oikocredit is hiring an investment officer in Amersfoort, Netherlands… Convergence is recruiting in Toronto and Hong Kong for an interim communications lead, a senior associate or manager of knowledge and a managing director or associate director of Asia.

Thank you for reading. 

– Nov. 22, 2019

You might also like...