The Brief | July 22, 2022

The Week in Impact Investing: Volatility

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TGIF, Agents of Impact!

The Week in Impact Investing: Volatility

🗣 Ups and downs. Gas started flowing to Europe again this week. Stock markets mostly turned upwards. But the relief may be fleeting during this turbulent summer. Much of the world is dangerously hot, inflation is spiraling, and recession looms. The shakeout recently claimed Airlift, a formerly high-flying darling of Pakistan’s venture scene that has been hammered by the rising cost of food and price sensitivities, as ImpactAlpha’s Jessica Pothering reports. At a moment for urgent climate action, congressional gridlock is putting the U.S. at a competitive disadvantage to Europe, Third Sphere’s Shaun Abrahamson says in a dispatch.

No one ever promised that the path to an inclusive, green future would be a straight line. For all of the turbulence, long-term trend trajectories are clear. As Amy Cortese reports from the Formula E race in Brooklyn, electric vehicles have reached a market and cultural tipping point. The resilience of early-stage climate tech investing has proved to be a bright spot amid the broader market gloom. Sometimes what’s perceived as risky is anything but. Lending to emerging markets’ small and mid-sized businesses, for example, has provided stable returns amid market volatility (see this week’s chart, below). A looming recession may make impact investing even more compelling (see Deal Spotlight). “Investing in innovative ideas with long-term horizons offers opportunities for investors to diversify and hedge their portfolios, thus making them less, rather than more, risky,” argue the authors of the latest post in our “Frontiers in Social Innovation” series with Stanford’s Center for Social Innovation. One example: British International Investment’s catalytic investments in affordable medicines, farmer productivity and climate resilience, and off-grid solar for millions of African households. That is a course worth staying. – Amy Cortese

🎧 Impact Briefing. Jessica Pothering joins host Brian Walsh to dissect the crash landing of Airlift, and chew over the broader Covid-fueled boom and bust in instant grocery delivery. Plus, the headlines.

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

🗳️Last chance to vote for SOCAP Open sessions. As many as half of the sessions at SOCAP22, from Oct. 17-20, will be chosen from community-generated ideas submitted through SOCAP Open. Scan the hundreds of submissions and vote for your favorites by midnight tonight. A sampling:

The Week’s Chart

Stability amid volatility: Private debt for small businesses in emerging markets. In a globally connected marketplace, it’s tough to find truly uncorrelated asset classes. MicroVest’s Leela Vosko compared a range of emerging-market indices with the Symbiotics Microfinance Index (SMX-MIV), which tracks the monthly performance of investment vehicles that invest in lenders to micro, small and medium-sized businesses in their local economies. “Many of these businesses are resilient to local economic conditions and global macroeconomic volatility, and play a vital role in local supply chains that keep communities functioning,” Vosko writes (for context, see “Acquisitions in Europe reflect investors’ appetite for private debt in emerging markets“).

The Week’s Dealflow

Deal spotlight: Mergers and acquisitions. Evidence from the Great Financial Crisis shows that investors that made significant acquisitions have outperformed those that didn’t. Large asset managers and private equity investors, sitting on nearly $2 trillion in dry powder, appear to be heeding the lesson. This week, Generate Capital acquired esVolta, a large-scale battery storage developer, owner and operator with over 900 megawatt-hours of storage capacity in North America. The deal reflects “the enormous potential for battery storage projects to rebuild our energy system,” said Generate’s Scott Jacobs. The firm earlier this year acquired organics recyclers StormFisher and Atlas Organics. Separately, funds managed by BlackRock this week purchased Vanguard Renewables, whose anaerobic digesters convert food and dairy waste to clean energy, from Vision Ridge Partners.

  • Go deeper. In M&A activity this year: Apollo Global Management took a $175 million stake in community solar provider Summit Ridge Energy… Mirova, the $30 billion impact unit of Natixis, acquired Nairobi-based SunFunder… Global Infrastructure Partners acquired Atlas Renewable Energy in a deal valued at nearly $2 billion.
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Clean energy. CrossBoundary Energy raised $40 million to expand clean energy in Africa… TAE Technologies secured $250 million to build its fusion reactor… TPG Rise Climate and BlackRock and Temasek-backed Decarbonization Partners injected $300 million in clean-hydrogen and carbon-black maker Monolith… Powin, a grid-scale energy storage tech developer, secured $135 million.

Climate finance. Catalyst Fund scored $3.5 million from FSD Africa to support high-impact tech startups targeting underserved and climate-vulnerable communities in Africa… Pegasus Capital Advisors raised $170 million for Global Fund for Coral Reefs. 

Electric vehicles. Germany’s Wingcopter raised $42 million for electric delivery drones… India’s electric vehicle manufacturer Ola Electric will invest $500 million to build a battery research and development facility in Bangalore… Lightship scored $23 million to build all-electric recreational vehicles.

Health and wellbeing. Moving Analytics raised $20 million to create cardiac rehabilitation care programs, particularly for women and people of color… Humanity Health scored $6 million to support career opportunities for women and people of color in the healthcare industry… U.A.E.-based Omooma scored $2.5 million for its Arabic-language maternal health content.

Impact tech. Silicon Badia secured $5.2 million from Smart Capital to invest in early-stage tech startups in the Middle East and North Africa… Mexican fintech Stori raised $150 million from Goodwater Capital, General Catalyst, GIC and others… Ukrainian edtech startup Preply raised $50 million to advance online language learning… Wheelocity raised $12 million to cut waste from India’s food supply chain. 

Inclusive economy. Achieve Partners notched an exit of tech training venture Genuent… Bangalore-based neobank NiYO raised $30 million from Multiples Alternate Asset Management… Carbon Equity bagged $1.8 million to bring private climate investing to retail investors… UnitedHealth Group committed $25 million to the Healthy Neighborhoods Equity Fund. 

Investing in water. Aqua for All and Family Bank are partnering to finance safe drinking water for low-income households in Kenya. The deal follows Aqua for All’s partnership with Oikocredit last month to improve water access and sanitation in Cambodia and East and West Africa.

New funds. New impact funds build their portfolios and scratch their way to a first close… Vektor Partners raised €50 million to invest in the future of mobility. 

The Week’s Talent

Julie Wallace, former global head of sustainability at Standard Chartered, joins LeapFrog Investments as head of impact. TIAA’s former president and CEO Roger Ferguson joins the firm’s global leadership council… Quinn+Partners brings on Jason Sukhram, ex- of MaRS Discovery District, as impact services lead and engagement manager, and Chelsie Hunt, a former freelance impact investment consultant, as a senior analyst.

Activate’s Ilan Gur will become CEO of the U.K.’s new Advanced Research and Invention Agency, or ARIA… Deloitte hires Wim Bartels and Arjan de Draaijer, both ex- of KPMG, as senior sustainability partners… Haley Glover, ex- of Amazon, is named director of UpSkill America, an initiative of the Aspen Institute Economic Opportunities Program… Cristina Bondolowski, ex- of HP Sustainability Impact, is named chief marketing officer at MSCI. 

LGT Crestone has appointed Amanda MacDonald, ex- of Perpetual Private, as head of sustainability… Bryan Locascio, ex- of Haas Sustainable Investment Fund, joins Capital Group as ESG senior specialist of impact measurement and management… Dominique Goss, ex-of TD Bank, is hired as executive director at M&T Bank’s Charitable Foundation to lead diversity and inclusion efforts.

The Week’s Jobs

In Boston, Social Finance seeks a vice president of impact investments, BNG Consulting, Inc. is looking for a director of impact operations, and Wellington Management is recruiting a principal for its Climate Innovation Fund, and Boston Impact Initiative is on the hunt for a senior impact investing associate… Capital Impact Partners is hiring a director of investments in New York. Also in New York, Tiffany & Co. is searching for a chief sustainability officer.

Opportunity Finance Network seeks a credit analyst in Washington, D.C… BlackRock seeks a sustainable investing research and strategy associate/vice president in New York or Washington, D.C… The Predistribution Initiative is looking for an associate to work with executive director Delilah Rothenberg… UBS is hiring a head of impact investing in Hong Kong… The California Endowment seeks an impact investing portfolio manager.

Microsoft is hiring a global societal impact and sustainability leader for its national transformation partnerships group… Knight Foundation is hiring a director of learning and impact in Miami… Climate Impact Partners seeks a remote sourcing manager for its Latin America portfolio management team… Netflix is looking for a director of ESG in Los Angeles, Los Gatos, Calif., or New York… VC Include is accepting applications from BIPOC fund managers for its first-time fund managers fellowship. 

That’s a wrap. Have a wonderful weekend. 

– July 22, 2022