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#Featured: Returns on Investment
Tweaking the ‘master algorithm’ for the future we want. Tim O’Reilly once again brings us news from the future. In his new book, “WTF: What’s the Future and Why It’s Up to Us,” the entrepreneur and tech seer takes on the current logic of capital markets themselves. “We need to understand how financial markets … have become a machine that its creators no longer fully understand,” he writes, “and how the goals and operation of that machine have become radically disconnected from the market of real goods and services that it was originally created to support.”
O’Reilly’s diagnosis is intriguing enough, but the real contribution of the book is in his outlines of an alternative. In the latest Returns on Investment podcast, O’Reilly speaks with ImpactAlpha’s David Bank about how to tweak the “master algorithm” for a more just, sustainable and prosperous future. Key words for that alternative include: open-source, diversity, commons, productivity and, for economist-wonks: positive externalities. “This question has recurred, ever more broadly, throughout my career: How can a business create more value for society than it captures for itself?”
Read, “Programming the master algorithm for the future we want” and then listen to the latest Returns on Investment podcast, “WTF: An Interview With Tim O’Reilly,” by David Bank on ImpactAlpha.
WTF? Programming the master algorithm for the future we want (podcast)
Dealflow: Follow the Money
Shell buys EV-charging company NewMotion. Royal Dutch Shell is hedging its bets as more countries commit to taking vehicles that burn fossil fuels off the road. The world’s sixth-largest oil company is buying Netherlands-based NewMotion, which makes public and home-based electric-vehicle chargers. Financial terms weren’t disclosed. Although less than 1% of cars sold today are electric, hybrid and all-electric vehicles could represent 70% of cars on the road by 2030. Last month, Shell announced plans to invest $1 billion on vehicle-charging and energy-management technologies. EV-support companies that have raised capital this year include ION Energy in India, which is developing batteries for electric vehicles, and Envision Solar in California, which builds solar-powered charging stations.
Lendable raises $6.7 million to back Kenyan “alternative lenders.”Lendable connects impact investors to social ventures that offer asset-based financing in Africa. In the company’s first deal, it helped arrange funds for Tugende, a Uganda firm that provides credit for motorcycle-taxi drivers to buy bikes through a lease-to-own arrangement. The funds will let Tugende, which in four years has sold bikes to 5,000 drivers, buy more vehicles and reduce its waiting list (read and listen: “Financing Uganda’s Boda Bodas to Boost Drivers’ Livelihoods”). Lendable structured a similar deal with Kenya’s Watu Credit, which also offers lease-to-own motorcycle financing, and brokered$550,000 in debt financing to Raj Ushangaa House for its pay-as-you-go solar kit business. Lendable’s latest fundraising was backed by KawiSafi Ventures, Omidyar Network, Fenway Summer Ventures, and fintech angel investors.
Tugende: Financing Uganda's Boda Bodas to Boost Drivers' Livelihoods (Podcast)
$53 million Educapital fund to finance edtech startups in Europe and Israel. The women-run fund wants to spread edtech finance beyond the U.S. and China, where 90% of of the sector’s venture funding is concentrated.Two-thirds of the children in primary school now will work in jobs that don’t yet exist, says Marie-Christine Levet, Educapital’s founder. “Schools have not historically embraced change,” she says. “However, education systems must innovate in order to accommodate [that] reality.” Educapital’s €45 million fundraising was led by French investment bank Bpifrance, with backing from book publisher Hachette Livre and Education for the Many. Educapital plans to invest in 15 ventures in Europe and Israel, including K-12 programs and corporate-education companies.
See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].
#Signals: Ahead of the Curve
Tackling the challenge of impact metrics. Trillions of dollars are needed each year to achieve the U.N.’s 2030 Sustainable Development Goals. For impact investors to make a meaningful dent, better impact measurement is needed. The U.N. Development Programme is turning to some of the world’s leading universities to come up with a comprehensive yardstick for measuring SDG progress. The new council, said the group in statement, “will undertake research to improve the analytical frameworks, evidence, and policy environment that encourage and guide commercial capital flows in support of the UN’s Sustainable Development Goals.” The SDG Impact Finance Research Council includes Penn’s Wharton School, Oxford’s Saïd Business School and the University of Cape Town’s Graduate School of Business. For a crash course on impact measurement, check out the “Cliff’s Notes” from the SVT Group and Middlebury Institute of International Studies, and an “atlas” of SDG data resources from the World Bank. ImpactAlpha explored impact management in its “Operation Impact” series with the Case Foundation, Acumen and the Impact Management project.
#2030: Long-Termism
Women in the megacities of the future. London is the most female-friendly city megacity of today, thanks to universal healthcare and access to education and financial services. The most dangerous city for women is Cairo, where violence against women is widespread. Delhi and Sao Paolo rank the worst for sexual violence, such as rape. Lima came in last in women’s access to healthcare, with wide gaps in reproductive health between the rich and poor and back-alley abortions are a leading cause of death for women. A survey by the Thomson Reuters Foundation of 380 gender experts in 19 countries ranked cities on measures for the treatment of women, including sexual violence, access to reproductive-health options, female genital mutilation and economic opportunity.
The status of women in megacities is crucial as accelerating urbanization means as many as six billion people will live in such cities by 2045. “We chose women because they are a real economic accelerator, re-investing 90% of their salary into their families. So when a woman thrives, her immediate community thrives with her,” says Monique Villa, CEO of the Thomson Reuters Foundation. “Understanding and preparing for the biggest issues arising from mass urbanization is crucial if we really want to meet the UN’s global goals by 2030.”
Tokyo and Paris followed London in female-friendliness. But even in leading cities, there’s more work to be done. In London, women earn £12,000 less than their male counterparts. Just over one-quarter of director-level roles are filled by women, and families face exorbitant childcare costs. In Paris, women praised economic opportunities but said harassment remains a problem. To which many women around the world might say, #MeToo.
Onward! Please send news and comments to [email protected].
