Greetings, Agents of Impact! Cheers to all of you who joined our LinkedIn Live on HBCU impact and innovation, with The Plug’s Sherrell Dorsey. Catch the replay here.
Featured: Good Jobs
In a strong labor market, investors look for companies to out-compete through ‘quality jobs.’ The Great Resignation turned out to be The Great Reshuffling. As workers reshuffle, they look for jobs they actually want. Employers that offer respect and advancement opportunities, along with smarter benefits, wellness support and, yes, higher pay, have a competitive edge in recruiting and retaining talent key to business success. Some investors are betting that rising expectations among workers will require employers to continue to woo them and try to keep them with “good,” “quality” or “gainful” jobs. The workplace disruption has given rise to private-equity and private-debt strategies to deliver “worker solutions” and “workforce impact.”
- Worker solutions. Lafayette Square, led by Damien Dwin, made a splash with an investment lens focused on the middle market and the low-income people who make it work. Such companies have large workforces but underdeveloped human capital infrastructure, says Don Baylor, who runs Lafayette’s “worker solutions” platform, a data-driven effort to help portfolio companies improve access to traditional benefits. “We see human capital analytics and the increased attention to human capital solutions as part of our risk management.”
- Value creation. Not all investors or business leaders see poor job quality as a problem worth solving. According to recent research, they should. “There’s an opportunity here,” says Tom Woelfel of San Diego-based HCAP Partners, which has raised three funds to invest mezzanine debt in lower middle-market companies. The firm’s “gainful jobs approach,” which helps measure and improve job quality standards across HCAP’s portfolio, has helped the firm win deals and achieve successful exits, says Woelfel. “Not only is it about a positive impact for workers,” he says. “It’s also a lever of value-creation that can be activated.”
- The takeaway. If labor shortages and rising wages are the new normal, then rising productivity through better recruitment, greater engagement and stronger retention can be a win-win for workers, employers and the broader economy.
- Keep reading, “In a strong labor market, investors look for companies to outcompete through ‘quality jobs,’” by Dennis Price and David Bank.
Catalytic grants aim to ready communities for clean energy funding. Sensing a historic moment with an unprecedented level of federal funding for clean energy and climate resilience, a handful of philanthropic organizations are teaming up to ensure that rural, tribal, communities of color and other under-resourced places are able to take part in the transformative opportunity. Invest in Our Future is a $180 million pooled fund intended to help communities navigate the roughly $1 trillion in federal funding available through the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, and the Inflation Reduction Act. “It became really evident that this was a pivotal moment for all philanthropy to engage and do our part to make sure federal funding is reaching marginalized communities,” says Rachel Isacoff of the Rockefeller Foundation, which is anchoring the fund along with the Hewlett, MacArthur and Packard foundations and billionaire-backed Breakthrough Energy. “We’re thinking about tackling community, economic and climate-related challenges all together in a way that would be supportive of locally-led initiatives.”
- Keep reading, “Catalytic grants aim to ready communities to deploy historic clean energy funding,” by Amy Cortese on ImpactAlpha.
Dealflow: Financing Farmers
Culttivo raises $14.5 million to extend credit to Brazil’s small-scale coffee producers. Brazil is the world’s largest producer of coffee. Most beans are grown and harvested by small producers, whose livelihoods are increasingly vulnerable to climate change. Culttivo is helping coffee farmers access credit for seasonal growing and to store harvests for preservation or to wait for higher prices. The fintech venture secured 70 million reais ($14.5 million) from the nonprofit Foundation for Agricultural Technological Innovation, or Figaro, to lend to farmers. Culttivo expects to recycle short-term loans to support 500 producers within a year.
- ESG risk screening. Culttivo uses satellite and on-farm data to estimate farmers’ production capacity and underwrite loans. Its model accounts for environmental factors and labor conditions. Those found illegally deforesting land or “involved in work analogous to slavery” are denied credit, the company says.
- Dig in.
Desaisiv raises $2 million to expand health insurance in the Middle East. Wealth extremes between oil-rich countries like Saudi Arabia, middle-income countries like Jordan, and unstable economies like Lebanon and Syria mean wide disparities in access to good healthcare. Jordan-based Desaisiv makes AI-based software to underwrite health insurance, lower costs and boost adoption of healthcare policies. Desaisiv aims to help insurance providers become “smarter, more efficient, and, most importantly, tailored to customer needs,” said co-founder Saed Khawaldeh. 500 Global, Terra VC, angel investors and family offices backed the company’s early investment round. CrossBoundary Advisory’s team in Jordan advised the deal. Check it out.
BluLever Education scores funding to train South Africa’s artisans and trade workers. More than 60% of South African youth are unemployed. Johannesburg-based BluLever Education is addressing the country’s jobs crisis with training for artisans and tradespeople. The company offers workshops on how to start and run a business, and apprenticeships in plumbing and other trades. Funding from the Elea, Autodesk and Oppenheimer Generations foundations and A to Z Impact will help BluLever develop electrical, automotive and welding programs. Share this post.
Dealflow overflow. Other news crossing our desks:
- Ev.energy, a UK-based EV smart-charging app for drivers, raised $33 million in Series B funding.
- UBS Optimus Foundation provided $600,000 to Philippines-based Blue Finance for a “marine-focused impact performance loan” for coral reef restoration. (Blue Finance)
- Water and sanitation infrastructure developer Aquasantec International secured $25 million in mezzanine debt from Vantage Capital for water access projects in East Africa. (Engineering News)
- Women-led Supply Chain Capital closed its $40 million investment fund for tech ventures enabling a more sustainable food system (see, “Illumen Capital and MassMutual back Supply Change Capital to invest in the future of food”).
Impact Voices: Impact Management
How three impact investors engage their stakeholders to validate impact. Before it invests, LeapFrog Investments seeks out existing and target customers to deepen its understanding of a company’s potential impact. Impact-focused venture firm Vox Capital in São Paulo works with its portfolio companies to undertake stakeholder-focused impact assessments. US-based Global Partnerships uses stakeholder-engagement data to work with a social enterprise’s management team to increase the value created for end-stakeholders. “The most important voices – and currently the voice most often missing from impact analyses – are those of the beneficiaries,” write BlueMark’s Sarah Gelfand and Layla Varkey with 60 Decibels’ Tom Adams in a guest post on ImpactAlpha. “Strong stakeholder engagement practices are a critical part of impact management and measurement.”
- Keep reading, “How three impact investors engage their stakeholders to validate impact,” by Sarah Gelfand, Layla Varkey and Tom Adams.
Agents of Impact: Follow the Talent
Aries Clean Technologies, a waste-to-biogas company, appoints Jon Cozens, ex- of Mura Technology, as CEO… Bezos Earth Fund has an opening for a sustainable finance associate director in Washington, DC… IFRS Foundation seeks a Montreal-based strategic affairs director to focus on multilateral development banks.
The Center for Sustainable Finance and Private Wealth is recruiting a North America-focused training and engagement program manager… Edison Energy is looking for a clean energy investments and advisory manager… ResponsAbility is on the hunt for an investment assistant in Peru.
Voyager Ventures is looking for an investment associate in San Francisco… Blue Forest is hiring a grants development associate in Sacramento… This year’s Carbon Smart Summit will convene executives from carbon registries and tech corporations, and from climate investment firms in New York Tuesday, Sept. 19.
Thank you for your impact.
– July 27, 2023
