The Week in impact investing: Countdown

TGIF, Agents of Impact! 

🗣️ Watchful waiting. With SOCAP following on GSG following on Climate Week, impact investing’s virtual fall conference season is in full swing (see No. 4, below). But for all the resolve around COVID-19 and recommitments to justice, the direction of the future seems to hang in abeyance. The COP26 climate talks in Glasgow that open next Sunday look likely to disappoint (see No. 1). High expectations for the U.S.’s return to climate leadership (and to the Paris climate agreement) have given way to a global “ambition gap.” The U.S.’s own progress hinges on a single vote in the Senate. We’ve had our chances to act; perhaps we’re just not up to big challenges.

A surprising light in the gloom is private capital. Big private equity and infrastructure funds are oversubscribed, corporate commitments are increasingly ambitious and endowments and pension funds are both divesting and investing. Catalytic capital for promising early-stage ventures, capital-intensive commercialization and massive replication is laying the groundwork for increasing returns to scale across sectors and geographies (to learn how, join The Call). Visionary early-stage investors like Earthshot Ventures’ Dawn Lippert are solving for both climate and justice (see, Agents of Impact). This year’s uptick to $1 trillion in climate financing must now be tripled or quadrupled, and fast. Global capital markets have been waiting for a signal from Washington, from Beijing, from Glasgow. Private investors can send their own signal: lead, follow or get out of the way. The countdown is on, for COP26 and for a last chance for a sustainable future. – David Bank

⚡ The Call: Catalytic climate capital. Join Breakthrough Energy Catalyst’s Jonah Goldman, Prime Impact’s Amy Duffuor, LEAF Coalition’s Eron Bloomgarden, Convergence’s Joan Larrea and other Agents of Impact who are using catalytic capital to bridge persistent capital gaps in climate finance, Tuesday, Oct. 26th at 10am PT / 1pm ET / 6pm London. RSVP today.

🎧  Impact Briefing. On this week’s podcast, ImpactAlpha’s David Bank joins host Monique Aiken to pick out highlights from SOCAP21 and from Monique’s conversation with Native Women Lead’s Vanessa Roanhorse (see No. 2, below) and to preview next week’s Agents of Impact Call. Plus, the headlines. Tune in, share and follow us on Apple, Spotify or wherever you listen.

The Week’s Agent of Impact

Dawn Lippert, Elemental Excelerator and Earthshot Ventures. Dawn Lippert is closing capital gaps at both ends of climate tech funding. For more than a decade with Elemental Excelerator, Lippert has been plugging the capital gap for early-stage startups building for communities on the front lines of climate change. With Earthshot Ventures, her new $60 million venture capital fund, Lippert is mobilizing commercial and institutional capital to take those solutions to scale in every community. Most “climate technology has to be deployed in location,” Lippert told ImpactAlpha. That means listening not only to technical experts and investors, but to community members, nonprofits, local utilities and regulators. “That’s the understanding of the ecosystem that’s required to get projects in the ground.” The strategy, Lippert says, makes Elemental and Earthshot “responsive to community needs, but also better investors.”

The low-carbon rebuild means building retrofits, mobility electrification, energy-use optimization and infrastructure investments in urban and rural communities. The diverse-led, high-impact ventures enabling those still face a capital gap. Investors like Lippert are overcoming biases and repricing risks by surfacing overlooked talent and great companies from climate-impacted communities. Elemental is building a startup ecosystem inclusive of race, ethnicity, gender and geography, starting in Hawaii and California. “If we invest with this knowledge, we will be able to decarbonize faster, center equitable solutions and be better investors,” says Lippert. The community-driven strategy is delivering returns. Elemental-accelerated companies have raised more than $4 billion in follow-on capital. Earthshot is bringing institutional capital to the party. From seed to scale – that’s how to close a capital gap. – Dennis Price

• Share Dawn Lippert’s story and like it on Instagram.
  
• ICYMI: “Elemental Excelerator’s climate-tech unicorns develop locally, deploy solutions globally.”

The Week’s Big 7

1. Catalytic climate capital. Climate financing could top $1 trillion this year, but significant gaps remain in early-stage innovation, late-stage commercialization, project financing and climate justice. Prime Coalition aims to fill an “idea-to-impact gap” for capital-intensive startups. Breakthrough Energy Catalyst has raised more than $1 billion for “nontraditional traditional blended finance” to accelerate commercialization and drive down costs for key climate solutions. The LEAF Coalition, for Lowering Emissions by Accelerating Forest Finance, aims to mobilize at least $1 billion to pay countries and states to protect their forests. More.

• Countdown to COP. Whether wealthy nations will meet their (repeated) promise to deliver $100 billion per year to help developing nations make the climate transition may determine the fate of the COP26 global climate summit in Glasgow. Check it out.
  
• Debra Schwartz on catalytic capital (podcast). The head of impact investing for the MacArthur Foundation says new investors, including family offices and corporate venture funds, are stepping up with flexible, patient and, yes, concessionary capital. “We’re seeing lots of creativity across the board,” Schwartz said on the latest Agents of Impact podcast. Tune in. 

2. The Reconstruction: The Indigenous wisdom of Vanessa Roanhorse (podcast). Tired: Collateral. Wired: Character. Deep local engagement and relationship-based lending are expanding access to credit, says Roanhorse, a co-founder of Native Women Lead, who joined host Monique Aiken on The Reconstruction. “Just because you’re unbanked, or not banked at the moment, doesn’t mean you’re actually high risk. It just means the system hasn’t worked for you.” Read more and listen in.

3. Q&A with Living Cities’ Joe Scantleburry. Alternative underwriting practices. Worker ownership structures. Shifting power and decision-making to investors of color. The incoming CEO of Living Cities is drawing on the organization’s three decades of place-based and race-intentional investing in U.S. cities to build forward better for all Americans. “The strategy for us is really one of transformation,” Scantlebury told ImpactAlpha. Know Joe.

4. Narratives for change at SOCAP21. The annual gathering was again online. Macro’s Poppy Hanks said films like Blue Bayou and Blast Beat can change the discussion around immigration. The key: “Creating a narrative that people can see a version of themselves in.” In her state of the field roundup, Duke University’s Cathy Clark said, “We are putting more effort, more money into our problems globally, and getting fewer results. So something’s wrong.” Get the download.

5. A dozen retail plays on the climate transition. Public-market funds may have only a marginal effect on mobilizing capital for climate action, but a raft of clean-energy ETFs provides exposure to companies with products and services that directly address climate change. “Investing in the climate transition is no longer just for institutions,” SustainFi’s Lana Khabarova wrote for ImpactAlpha. Keep reading.

6. Taking on gender-based violence at work. Only a handful of “gender lens” funds are taking intentional action on gender-based violence and sexual harassment in the workplace. ​​“This is a missed opportunity for impact investors to impact the safety and success of women in the workforce,” Ayesha Khanna, Virginia Schippers and Minh Nguyen-Hiltunen of Care Enterprises wrote in a guest post. Onward.

7. ABCs of impact investing (video). Avoid harm, Benefit stakeholders and Contribute to solutions. This week’s video from Duke University’s Cathy Clark helps investors assign the ABCs of impact management to their portfolios of impact investments. As more investors classify their investments, said Clark, “impact performance will be easier to communicate up and down the investment value chain.” Learn your ABCs.

The Week’s Dealflow

Spotlight: Women Rising. Underfunding Black women innovators has left social and environmental solutions on the table. New York-based Echoing Green is partnering with Goldman Sachs’ One Million Black Women initiative to create fellowships for Black women social entrepreneurs focused on education, healthcare, workforce development, financial inclusion and climate justice. “Giving Black women a platform to invest in their ideas is essential to closing opportunity gaps,” said Goldman’s Asahi Pompey.

• Gender smart. Women-led Alloy raised $3.3 million from Kairos HQ and PACE Healthcare Capital to provide remote health services for menopausal and post-menopausal women… Media venture Black Ballad, which focuses on Black women in the U.K., secured £335,000 ($454,000) in angel, venture and crowd-funded capital… Woman-led Ejara in Cameroon raised $2 million for impact-focused crypto… And Sudan’s first foreign venture capital investment in 30 years supported woman-led Alsoug.com.
  
• Funding the funders. Four venture funds led by women of color – The 22 Fund, WOCstar Fund, Supply Change Capital and 2045 Ventures – form the Ally Capital Collab to coordinate fundraising and investments.

Climate finance. Electric vehicle battery maker Our Next Energy raises $25 million… Saildrone secures $100 Million to assess climate impacts on the oceans through data collection and ocean mapping… Actis’ sustainable energy infrastructure fund raises $4.7 billion… Kenyan sanitation venture Sanergy secures $2.5 million from the Japan International Cooperation Agency… CarbonCapture secures $35 million to suck carbon from the atmosphere.

Agrifood investing. Smallhold secures $25 million to grow organic mushrooms in local warehouses… Gunn Agri Partners secures A$100 million (US$75 million) to help Australia’s small and mid-sized farms transition to regenerative and energy efficient farming practices… Netherlands-based Agreena raises $4.7 million to verify and sell carbon credits from regenerative farms.

Financial inclusion. India’s Niro raises $3.5 million in a round led by Elevar Equity to boost consumers’ access to credit through online shopping and other sites… India’s M2P Fintech clinches $35 million from Tiger Global Management, Omidyar Network India, Better Ventures and others to help financial services firms integrate digital services.

Small businesses. Nigeria’s Sendbox raises $1.8 million to provide affordable, last-mile delivery services to small businesses and merchants… SMBX raises $11.5 million to democratize small business lending… Egyptian enterprise tech venture Cartona raises $4.5 million to help small retailers source inventory from fast-moving consumer goods companies. 

Inclusive economy. Republic raises $150 million to ride the growth of equity crowdfunding… Wonolo clinches $138 million to connect gig workers with temporary and flexible work that pays a living wage.

Fund news. Brazil’s Monashees targets $700 million for early- and growth-stage impact investments.

The Week’s Talent

Tessa Flippin, formerly of Chicago’s TechNexus Venture Collaborative, has launched Capitalize VC to empower diverse entrepreneurs and investors… John McKinley, ex- of Dartmouth’s Tuck School of Business, rejoins BlackRock as managing director of governance and sustainability policy… Melinda Wright, ex- of Walton Family Foundation, joins Cambridge Associates as global head of diversity, equity and inclusion… Rick Hampson, ex- of Citizens Bank Michigan, joins Arctaris Impact Investors as a principal to expand the firm’s ESG and impact investing practice in Ohio and Michigan. 

The Week’s Jobs

CDC is hiring a director for capital solutions in London… Candide Group is looking for a portfolio manager for its Olamina Fund… Visa seeks a director of social impact stakeholder engagement and content creation in San Francisco… Aceli Africa is hiring a senior associate in Dar es Salaam, Tanzania… Societe General is recruiting a CSR and sustainability analyst in Singapore… Also in Singapore, McKinsey seeks a sustainability insights manager… M25 is looking for an analyst in Chicago… Fidelity Foundations is hiring a regional program officer in Boston… PwC seeks an ESG deals director in Austin.

Elemental Excelerator is recruiting a policy lab co-director in Hawaii or the San Francisco Bay Area… Praxis Labs is hiring a chief of staff in Brooklyn… Include Ventures is hiring a principal, a senior associate and a junior associate… JustLeadershipUSA is looking for a director of programs and impact in New York… Global Partnerships seeks a senior credit officer in Seattle… California Black Freedom Fund is recruiting an executive director… SolarFi is looking for a chief operating and financial officer in Atlanta… Kopernik is hiring for a visual communications officer and other roles.

Tides seeks a senior advisor for corporate social impact in San Francisco… Adasina is looking for a business development coordinator in San Francisco… The Puget Sound Partnership is hiring a tribal liaison in Washington State… The Community Center for Education Results seeks a director of research partnerships… Seattle Foundation is looking for a scholarships associate advisor in Seattle… Mercer is searching for a sustainable investment senior associate in Boston… Twilio.org is recruiting a senior impact fund manager.

That’s a wrap. Have a wonderful weekend. 

– Oct 22, 2021