The Week in Impact Investing: Collaboration

TGIF, Agents of Impact! In today’s Brief:

• Impact collaborations
• Responsible exits
• Black ownership economy
• Inflection point for deep tech in India

🗣 Winning combinations. Teamwork makes the dream work. In San Antonio and other cities, a new crop of mixed-use real estate ‘corridors’ are combining small business support with community and shared ownership models to revitalize neighborhoods, build local wealth and protect against displacement, reports Roodgally Senatus. Other impact investors are collaborating to fuse philanthropy with deep impact investing in dozens of multi-donor funds that are built on top of donor-advised funds. The model allows for quick, affordable and flexible design and collaboration, Impact Assets’ Tim Freundlich explains in a guest post. In her annual state of the field letter, Fran Seegull of the US Impact Investing Alliance called for accountability, system-level thinking and, yes, collaboration. With impact investing at a crossroads, Stakeholders Capital’s Terry Mollner convened fellow sustainable asset managers, including Freundlich, Matt Patsky, Amy Domini, Leslie Samuelrich and Geeta Aiyer, who together are proposing to recast the field as “common good investing” to counter conservative attacks.

Collaboration between humans and artificial intelligence is increasingly central to nearly every solution. Workforce-focused VCs are optimistic that AI can open pathways to higher-skilled jobs for workers who have been shut out of the middle class, reports Dennis Price. Education investors have important decisions to make about what AI solutions will help teachers and students. The wrong choices could entrench systemic education gaps; the right ones could give teachers more time to actually teach, explains Rethink Education’s Matt Greenfield. 

ImpactAlpha is collaborating with partners across the field, including on our growing set of specialized databases of fund managers focused on the ownership economy, climate and gender, and investing in local economies, which we launched this week with Neighborhood Economics. Next week, we launch ImpactAlpha Latin America, a specialized monthly newsletter (opt-in!) developed in collaboration with local investment networks and ecosystem builders. Intentional collaborations among people, funds, institutions and sectors will be the key to meeting the great challenges of the 21st century. Successful collaborations require commitment, shared vision and knowing one’s role. Ours is to elevate the good work of Agents of Impact who are teaming up to make positive change. Keep it coming. – Isaac Silk

🌎 Sign up for ImpactAlpha Latin America. Just in time for next week’s Latin America Impact Investing Forum, ImpactAlpha is standing up a specialized monthly newsletter for the region. Partners include FLII, New Ventures, Alterna, Latimpacto, Aliança Pelo Impacto and Pro Mujer. Opt-in to receive ImpactAlpha Latin America in your inbox. Sign up. 

📞 Next Week’s Call: How fund managers drive alpha through impact. Join Tideline’s Ben Thornley, Impact Capital Managers’ Marieke Spence, Bain Capital’s Larissa Quinn, and Aaron Rudberg of S2G Ventures, in conversation with ImpactAlpha’s David Bank, to explore the levers for effective and financially material impact value creation, Wednesday, Feb. 28 at 10am PST / 1pm EST / 6pm London. RSVP today.

The Week’s Short Signals

💪🏾 Black ownership economy. Black-owned businesses surged 14% during the pandemic. Even at that growth rate, it will take 80 years to reach parity with the Black share of the population as a whole. A new report calls on community developers, investors, and Black entrepreneurs to acquire, merge, and expand existing Black businesses. (Brookings Institution)

💰 Responsible exits. It may be tempting to rush to sell in a hot market, but a bad exit can undo decades of social impact work. A report offers guidelines to help investors navigate this crucial stage with integrity. (Cerise+SPTF)

☠️ Antitrust watch. Higher prices, lower wages, erosion of democracy. These are just a few of the ways that increasingly concentrated corporate power undermines healthy economic, political, and social functioning. (Columbia Center on Sustainable Investment)

🔻 Peak gas. European liquid natural gas demand has dropped 20% since Russia invaded Ukraine, thanks to renewable energy deployment and efficiency measures. Peak LNG for the continent is forecast for 2025. (IEEFA)

☀️ Bright future. Solar power generation in Texas keeps reaching new heights – a record 16,668 megawatts, or enough power for more than 3.3 million homes, was reached last week. The Lone Star State has tapped less than 2% of its rooftop solar potential. (Houston Chronicle)

• ICYMI: “Don’t mess with Texas’s lead in the low-carbon energy transition”

🌿 Red, white… and green. How green are Americans? Just over one-quarter are engaged environmentalists, or “plant protectors,” according to YouGov’s sustainability report. Another 19% care about nature but are price sensitive. Some 24% are “green rejectors” with negative views on environmental sustainability and skepticism about climate change. (YouGov)

The Week’s Dealflow

Deal spotlight: ‘Deep tech’ impact investing in India. Pure EV, an electric motorbike maker based near Hyderabad, is the latest Indian EV startup to close an equity round. But there’s more to impact tech in India than just EVs. The country is emerging as a hub for deep science tech startups working on breakthrough solutions in climate change, food security and other global challenges. Capital flows to India’s deep tech ventures surpassed $1 billion over the past three years and are on pace to reach $10 billion in the next five, according to a new report from impact tech investor Ankur Capital that includes the chart above. Growth capital and corporate backing is needed to scale locally-developed solutions. “The entire Indian deep science tech ecosystem is at an inflection point,” according to Ankur. Watch David Bank’s interview with Ankur co-founder Rema Subramanian.

• Ten-figure markets. Deep science tech entrepreneurship in India has potential to unlock multi-billion-dollar global markets. Bangalore-based Sea6 Energy is farming seaweed to make biostimulants to increase plant yield. Synthetic biology company String Bio is making protein for animal nutrition and crop inputs for agriculture – both $100 billion markets. Synthetic biology and battery storage markets are just as large. Molecular diagnostics is estimated to be worth $45 billion.
  
• Big payoffs. Most of the funding supporting India’s deep science tech scene has come in the form of grants, support through incubators and labs, and seed investments. Growth-stage venture investors are often reluctant to back deep tech because of its capital intensity and long product development timelines. Ankur Capital’s Ritu Verma says it can be worth the wait. “When they hit the market, then they hit the market big time,” she told ImpactAlpha. Foundational work in chemistry and electrodes in the 1980s and 1990s ultimately led to the creation of lithium-ion batteries, today a $50 billion market. Argues Verma, “Investors need to wake up to the possibilities.”
  
• Share this post. 

 Agrifood investing. India’s online seafood vendor Captain Fresh raised $48 million in an extended equity round… Iowa-based soil analytics startup Trace Genomics raised $10.5 million in a round led by S2G Ventures and Ajax Strategies… Israel’s WeedOUT raised $8.1 million in a round led by Fulcrum Global Capital for its green solution for herbicide-resistant weeds… WIC Capital invested in a local snack food company in Senegal.

Clean tech. AtmosZero raised $21 million for zero-carbon industrial boilers… D.light closed $7.4 million solar securitization deal in Nigeria… Eli snagged $6.8 million to help consumers electrify their homes… Fever Energy, in Sweden, clinched €10 million ($10.8 million) in seed funding to develop a network of virtual power plants throughout Europe… Nigeria’s Arnergy, which sells small solar systems for homes and businesses, secured $3 million from Breakthrough Energy Ventures, Norfund and other investors.

Climate tech. Kairos Aerospace scored $52 million to help oil and gas companies reduce methane leaks… Overture raised $60 million to help climate tech founders tap government support.

Education and upskilling. Edtech venture BridgeCare raised $10 million to provide data and software to government and nonprofits in order to make early childhood education more equitable and accessible… Social Finance’s UP Fund invested $6 million in Tampa-based Learning Alliance Corporation to train US workers for jobs as broadband and fiber technicians. 

Electric vehicles. Indian EV finance, insurance and maintenance company Vidyut secured $10 million in debt and equity… Electric two-wheeler maker Pure EV raised $8 million in equity.

Financial inclusion. Bangladesh-based PriyoShop clinched $5 million to supply inventory, financing and a business management app to mom and pop shops… Omnivore, Siana Capital and Unleash Capital Partners led a $6.5 million Series A financing round for Ayekart, a fintech company that lends to India’s small and mid-sized agribusinesses.

Fund news. India’s National Investment and Infrastructure Fund invested 2.1 billion rupees ($25 million) in Amicus Capital’s second fund for manufacturing, healthcare and financial services startups.

Institutional impact. Malaysian public pension fund manager Kumpulan Wang Persaraan invested $21 million in two startups and two fund managers to address financial inclusion, food security and climate change… The New York State Common Retirement Fund reached its goal of investing $20 billion in climate and sustainability-aligned private equity, bond, infrastructure and real estate assets. It’s looking to double its investment in green assets by 2035. The pension fund also announced that it’s restricting investments in eight oil and gas companies, includingExxonMobil.

Investing in health. London-based Juniper raised €1.7 million ($1.8 million) to provide reproductive health insurance that covers a gap between employer-sponsored plans and the public health system.

The Week’s Talent and Jobs

Keyur Patel, previously with PSG Equity, joined Boston Impact Initiative as portfolio manager… Halcyon Venture Partners promoted Dahna Goldstein to co-founder and managing partner… Shannon Mullins, a former sustainability and climate change manager at Deloitte, joined The Predistribution Initiative as head of special projects… Ilona Limonta-Volkova, previously with Conrad N. Hilton Foundation, joined TruStage Ventures as an investor… UBS Wealth Management’s Santi Miller has been seconded to Ownership Works through October… Wanjiru Kamau-Rutenberg, previously an executive in residence at Schmidt Futures, joined Ford Foundation as a senior fellow.

Share the week’s impact jobs. View dozens of other jobs on our new job board. Want to post a listing? Submit it here.

That’s a wrap. Have a wonderful weekend. 

– Feb. 23, 2024