Impact Management | August 29, 2017

Useful impact data, lab-grown meat, Rise Fund’s under-30 challenge, Mexican impact bonds

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Greetings, ImpactAlpha readers! We’re ba-a-ack.

#Featured: Open Mic

Impact Management: How the right data can drive performance for people and the planet. All investments have an impact. But what type of impact and how does it compare? Bridges Fund Management facilitated the Impact Management Project, a group of more than 700 impact practitioners backed by the Ford Foundation, Omidyar Network, Anthos, PGGM and BlackRock and others, to find some answers.

The group has agreed to track performance on five dimensions of “impact,” the positive and negative experiences of people and the planet — what outcomes the investments drive, how much, for whom, the contribution they make and the risk they take. “Using a shared convention for understanding and describing our impact does not mean that we all use the same tools,” the group reports in the third in our series, Operation Impact, which explores challenges and solutions in the practice of impact investing. Even with different tools, “we can each try to ensure that the five dimensions of impact are visible in our decision-making frameworks and how we talk about our goals.” With such useful data, impact practitioners can “understand which of our effects on people and planet are really good or really bad, and therefore to change our course .”

Read, “How the right data can drive performance for people and the planet,” from the Impact Management Project, on ImpactAlpha:

Impact Management: How the right data can drive performance for people and the planet

#Dealflow: Follow the Money

Bill Gates backs Memphis Meats’ lab-grown beef, chicken and duck. San Francisco-based Memphis Meats produces lab-grown meat from animal cells, distinguishing it from vegetarian “meat” companies Impossible Foods and Beyond Meat, which Gates has also backed. Memphis Meats claims it uses 1% of the land and 10% of the water typically required to raise livestock for consumption. Joining Gates in the company’s $17 million Series A round were a host of high net worth and venture capital investors, including Richard Branson, agricultural giant Cargill, Kimbal Musk and Fifty Years, which was an earlier investor in the firm. The round, led by venture capital firm DFJ, brought Memphis Meats’ fundraising total to $22 million; the company has not yet commercialized its products. Sustainable protein startups have raised hundreds of millions of dollars in private capital.

Kingo raises $8 million to expand off-grid solar in Latin America. The Guatemala-based venture provides pay-as-you-go home solar kits to 48,000 rural households. Kingo hopes to reach one million homes by 2021. Kingo’s Series B round was backed by French utility ENGIE and Colombian utility EPM’s innovation fund, as well as French and Dutch development banks and a prior investor, the InterAmerican Development Bank-backed Honduras Energy Finance Facility. Kingo has raised $19 million since it launched in 2013.

TPG’s Rise Fund, Echoing Green and Forbes launch $500,000 challenge. The Global Under 30 Impact Challenge is open to startups tackling issues in education, energy, food and agriculture, financial services, growth infrastructure, healthcare, and communications and technology. Entrepreneurs from anywhere in the world must be under 30 years old and their businesses must be at least two years old and generating revenues. The winner will get a $250,000 investment from TPG’s impact investment fund and $250,000 in media grants from Forbes. Impact startup accelerator Echoing Green is supporting the judging, which will take place at a Forbes event October 2 in Boston. Applications are due September 6.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

Can Mexico tap impact bonds for peace and prosperity? Impact investors could help Mexico finance programs that reduce violence and reintegrate ex-offenders into society. A successful £5 million social impact bond in Peterborough, England helped keep fewer prisoners from returning to prison. Along with 88 others, social impact bonds have raised $322 million in 19 countries to take on homelessness, worker training, education and prison recidivism. Mexico’s impact investment market is $1 billion and growing. Public safety, along with education, health and employment are ripe for impact bonds, says a new report from from the Brookings Institution and Mexican think tank Ethos. Such bonds can “finance certain aspects of public services, including coverage and quality, in a transparent, innovative and collaborative manner, while also generating savings for the government,” the report concludes. Mexico is Latin America’s second-largest economy but lags in education, health and equality. Mexico’s first impact bond, in the state of Jalisco, aims to train 1,320 female heads of household to increase their purchasing power, savings, and assets. The Jalisco government and the Global Innovation Fund will repay the Multilateral Investment Fund and other impact investors after 30 months, if trainings hit their targets.

#2030: Long-termism

Africa’s informal path to youth employment. Africa’s youth bulge is both a crisis and an opportunity. By 2035, sub-Saharan Africa will have more working-age people that the rest of world’s regions combined, according to IMF forecasts. By 2055, the continent’s youth population, aged 15–24, is expected to be nearly 500 million, or more than double 2015 levels. According to theAfrican Development Bank, 12 million young people entered Africa’s labor force in 2015, but only 3.1 million jobs were created. Acquiring work visas can be extremely difficult for Africans, hampering the flow of goods, services, and people across borders. And Africa’s leaders may have a hard time understanding the young and jobless. The median age of Africa’s population is 19.5 years, while the average age of an African president is 62.

The fifth European Union-Africa Summit, to be held later this year, will focus squarely on African youth in terms of migration, security, and employment; the African Union’s theme for 2017 is “Harnessing the Demographic Dividend Through Investments in Youth.” Youth Connekt Africa, launched by the United Nations Development Programme and the government of Rwanda, encourages youth-friendly policies, such as access to finance and skills development. The World Bank has some concrete suggestions.

Sub-Saharan Africa’s informal economy, one of the largest in the world, provides a kind of cushion. Informal sectors contribute as much as two-thirds of GDP, and account for between 30 and 90 percent of total employment (excluding agriculture). Informal employment and income provides livelihood to many people who might otherwise be jobless.

Onward! Please send any news and comments to [email protected].