The Brief | May 22, 2019

Zipline’s drone fleet, Haiti’s off-grid energy fund, learning the trades, Chief Opportunity Zone Officers, scouting impact startups at SEED

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Greetings, Agents of Impact!

The Call No. 9: How leading investors moved beyond trade-offs. Poke and prod the investment strategies of Prudential Financial’s Ommeed Sathe, Elevar Equity’s Sandeep Farias, Blue Haven Initiative’s Liesel Pritzker Simmons and Omidyar Network’s Robynn Steffen in a special Agents of Impact conference call, Thursday, May 30th. RSVP today.

Featured: ImpactAlpha Original

How Zipline raised $190 million to build a global drone logistics network, starting in Rwanda and Ghana. Improving emergency medical care in sub-Saharan Africa has not typically been the kind of challenge that attracts major investors more used to chasing tech unicorns. When the solution integrates a fleet of autonomous drones, sophisticated cold-chain management and software-driven automation, they get more interested. For California-based Zipline, delivering blood, vaccines and medications to clinics and hospitals in rural Rwanda and Ghana is a proving ground for something much bigger. Zipline last month raised $120 million from TPG Growth’s Rise Fund, investment firm Baillie Gifford, Singapore sovereign fund Temasek, Goldman Sachs, and Toyota Tsusho Corporation. That follows a $70 million raise last year and brings Zipline’s total fundraising to $225 million. The company says it did indeed join the ranks of the unicorns with the latest round, which valued Zipline at $1.2 billion.

Zipline’s drones can carry about four pounds of cargo and fly nearly 70 miles per hour. The firm says it has made more than 13,000 deliveries in Rwanda and handles two-thirds of the country’s blood supply outside of Kigali. But the company’s complex distribution system has not always been enthusiastically welcomed in countries that lack electricity, medical supplies and ambulances. After working closely with the government of Rwanda for years, the company faced political pushback in securing a deal to launch in Ghana. Critics questioned whether patients couldn’t be better served by investing in more basic medical equipment. “There is a growing feeling around the world that technology is not benefitting the vast majority of people,” acknowledges Zipline’s CEO Keller Rinaudo. Zipline is clearly not a typical social enterprise working to improve health systems in under-resourced settings. But neither is it the typical tech venture targeting the first-world problems of coastal elites. It has convinced global private investors to effectively subsidize access to emergency health care for rural Africans in the expectation of a huge future market opportunity.

Keep reading, “How Zipline raised $190 million to build a global drone logistics network, starting in Rwanda and Ghana,” by Jessica Pothering on ImpactAlpha.

Dealflow: Follow the Money

Bamboo Capital picked to manage $17 million renewable energy fund in Haiti. Less than one-third of Haitian households have access to electricity. In rural areas electrification rates are as low as 5%. The Government of Haiti and the World Bank selected Bamboo to manage the Off-Grid Electricity Fund, which has a goal of reaching 200,000 households in Haiti in the next decade. The Geneva-based impact fund manager has $290 million under management. The off-grid fund will invest debt and equity in providers of mini-grid and pay-as-you-go solar products. The Haitian government set up the fund; The World Bank’s Clean Technology Fund and Scaling Up Renewable Energy Program provided the capital. Bamboo Capital launched a tech-driven impact fund with the government of Togo in March. More.

Interplay Learning raises $5.5 million to train blue-collar workers. The Austin startup’s platform provides training in dozens of trade skills including HVAC, electrical, energy auditing, solar installations, manufacturing, and construction using virtual reality and 3D simulations. S3 Ventures led the $5.5 million Series A equity round, with Shasta Ventures, Sierra Ventures, Holt Ventures, Wild Basin Investments, and Shelter Capital Partners. “The content really engages our junior technicians, so they actually use it and can see a clear path on how to grow their technical skills,” said Interplay client Robyn Hass of Core Mechanical. “This means we can hire for attitude and train for skill.” Interplay says its user base is growing 40% month-over-month. Check it out.

Rockefeller Foundation seeds city-level support for Opportunity Zones. The goal of the $5.5 million in funding is to help cities attract and deploy impact-oriented investment to communities in economically distressed Opportunity Zones. Rockefeller will provide funding and human resources to six cities, beginning with Newark, to support city-level Chief Opportunity Zone Officers, as well as community engagement specialists. Prudential Financial added $950,000 to support the Newark effort. “Philanthropy has an important role to play in ensuring opportunity zones improve the lives of the residents in distressed communities,” said Rockefeller’s Raj Shah. Funding from Rockefeller is part of a broader effort by U.S. foundations to ensure Opportunity Zone investments benefit community members. Earlier this year, Kresge Foundation put $22 million into the Opportunity Funds of two impact fund managers, Arctaris Impact and Community Capital Management. Kresge also backed a Calvert Impact Capital Opportunity Fund incubator. Rockefeller will pick five more cities to receive funds in the coming months. Dig in.

Signals: Ahead of the Curve

Scouting the impact ecosystem at SEED. Investors, entrepreneurs, educators, consultants, and others up mingled over chicken pupusas and mushroom onigiri at SEED, a San Francisco conference for early-stage social ventures. At the Roxie Theater in the city’s Mission District, participants and judges vetted pitches from six startups seeking funding.

  • Native Women Lead, a cooperative focused on mentoring, investing in and helping to build companies led by native American women, won the $20,000 audience prize, plus another $5,000 from an expert judge.
  • The judges’ prize of $12,500 went to Savvy Cooperative, a patient-owned co-op built that connects health care companies doing market research for new products. Patients are compensated for their insights when they participate in focus groups, surveys, and interviews.
  • Ellie FunDay, another competitor, works with marginalized women in India to design organic baby blankets, stuffed animals, and other products.
  • Xyza (pronounced zai-za), a news platform for tweens, aims to build news consumption and critical thinking habits among the world’s 1.2 billion tweens (kids aged 8 to 13) with an online platform, weekly emails, and a pop-up event series.
  • Portland’s Wheyward Spirit takes excess whey from cheesemakers and turns it into a premium alcoholic spirit sold alongside rum, vodka, and whiskey.
  • The final competitor, Flourish, probes how Uber drivers and other underbanked populations spend their time. The ventures is integrating games and lottery-like experiences to help people save money. The goal, according to co-founder Pedro Mora: “World savings domination.”
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Agents of Impact: Follow the Talent

Open Society Foundation is looking for an investment principal on its economic justice team for a six-month term in New York or London… Generate Capital is hiring a director of financial planning and analysis and other roles… Sonen Capital reports that its global equity strategy beat traditional benchmarks across all of the key performance indicators that its monitors… In New York, the GIIN and Dalberg are hosting “Creating Gender Lens Investment Opportunities,” tomorrow May 23.

May 22, 2019.