The Brief | January 6, 2023

The Week in impact investing: Deploy

ImpactAlpha
The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣 The buildout. Optimism may not be self-fulfilling, but pessimism surely is. That’s why, like many Agents of Impact, ImpactAlpha leans can-do, solutions-oriented and slightly rose-colored. ReachScale’s David Wilcox took us to task for excessive cheerleading on climate progress in our 2023 lookahead by citing the “unstoppable S-curves” of falling prices and rising deployment that are accelerating the low-carbon transition. For a reality check, he says, try to find financing, as he has, to install 500 megawatts of solar power on leased farmland in the Indian state of Maharashtra, just one among many stalled renewables projects. “No democratic country in the Global South should have an easier time financing new megawatts than India,” Wilcox writes. Such undeniable obstacles to deployment underscore the extent to which the global energy reboot and sustainable development must drive a transformation in finance as well. The fund managers on The Liist are on the case; check out our January collection, compiled by ImpactAlpha’s Jessica Pothering with our partners at Realize Impact. 

That doesn’t mean the deals come easy (see Dealflow Spotlight, below). Key to ramping up activity are “entrepreneurs who think like project developers,” Spring Lane Capital’s Nate Lowbeer-Lewis explains in a guest post. Needed skill sets: protecting against cost overruns, drafting financeable offtake contracts, and navigating permitting pathways with multiple stakeholders. Still missing: predevelopment capital for feasibility studies, site acquisition, architectural and engineering work, and permitting, and demonstration capital for the first deployment of a new solution, and possibly the second, third and fourth as well. Collaboration is key: to deploy electric “dollar vans” in New York’s transit deserts, Brooklyn-based Dollaride brought its network of drivers together with tech and climate startups, impact investors and state agencies, as Roodgally Senatus reports (hear Dollaride’s Su Sanni and Chris Coles on this week’s Impact Briefing podcast). In the U.S., last year’s Inflation Reduction Act and other legislation is spurring a surge of investment in renewable energy, batteries and electric vehicles (see chart, below), as Amy Cortese reports. Hope may not be a strategy, but with policy leadership, catalytic capital and an endless supply of grit, we can deploy the social and physical infrastructure needed to exceed even today’s best-case scenarios. – David Bank

🎧 Impact Briefing. Host Monique Aiken and ImpactAlpha’s Roodgally Senatus chat with Su Sanni and Chris Coles of Brooklyn-based Dollaride, which is electrifying the city’s informal “dollar vans” to boost drivers’ livelihoods and cut carbon in New York’s transit deserts.

⚡Amplify your team’s impact in 2023. A warm welcome to the Agents of Impact teams at Allstate Investments, Bivium Capital, Apex Partners, The Capital Group, Westfuller Advisors, 60 Decibels, Acumen and Ceres. Their enterprises are taking advantage of ImpactAlpha for Teams. You can raise your team’s game in the new year and save with substantial discounts. We’ll onboard your colleagues with a customized welcome page.

The Week’s Chart

A green, inclusive manufacturing revival. The Inflation Reduction Act has been called an industrial policy bill masquerading as a climate bill. The landmark legislation, along with the infrastructure and CHIPs bills signed into law last year by President Biden, are “unlocking investment in high-growth, high-potential industries that will grow the economy from the bottom up and middle out,” as White House economic advisors Brian Deese and Anita Dunn put it in a year-end memo. Automakers committed more than $33 billion for new EV and battery plants in 2022 alone. Deese and Dunn foresee more than $3.5 trillion in public and private sector investment over the next decade. – Amy Cortese

The Week’s Dealflow

Dealflow spotlight: Following the money in 2023. The year’s slow start to dealflow is no fluke. Despite a year-end flurry, investments in everything from venture capital to sustainable and green bonds were down last year from 2021. Bright spots were climate tech, which last year accounted for one-quarter of all venture capital investments, and investments in Africa, which were actually up in 2022. This year, watch out for “natural capital” investments. Terratai, a new investment firm focused on biodiversity, launched in Indonesia this week. Kering and L’Occitane Group committed €140 million ($148.5 million) to a natural capital fund mobilizing capital from fashion and beauty brands. Global summits last year reached new agreements to dial up the flow of capital for conservation and climate-vulnerable communities.

  • Runner-up. The investment pace in 2021 was always going to be hard to match. The full year’s VC numbers aren’t out yet, but 2022 activity appears to have far exceeded the dealflow in 2018, 2019 and 2020. 
  • Hot climate tech. Investors are looking for innovations that can flatten the curve of climate change. Nearly $5 billion has flowed in recent years to startups in fusion energy, which reached a critical milestone last year. More than half of climate tech investments are going into the biggest carbon-emitting sectors. India has become the third-largest market for climate tech startups.
  • Africa’s boom. Africa will have attracted more than $5 billion in venture capital last year, up from about $4.2 billion, when the final tally is done, according to Africa: The Big Deal. That makes the continent the one region where investment activity exceeded 2021. The number of investors active on the continent is also up. And fintech accounted for 37% of the VC pie last year, down from 53% in 2021, suggesting that investors are increasingly diversified.
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Clean energy. Pune-based Ecozen raised $10 million to make solar-powered refrigerators and irrigation systems for India’s agriculture sector… South Africa’s Solarise Africa secured $3 million from the E.U.’s ElectriFI Electrification Financing Initiative for commercial and industrial solar installations… The Norwegian Climate Investment Fund backed ReNew Power’s renewable power transmission project in the Indian state of Karnataka. 

Education and skills. Bangalore-based Varthana raised $7 million from MicroVest to provide affordable school loans to students in rural India… Mumbai-based Eduvanz raised $12.6 for its education lending marketplace that offers no-interest loans to students in India.

Financial inclusion. Elevar Equity re-upped investment in SarvaGram to speed financial inclusion in rural India… MUFG Bank bet $200 million on Indonesia’s Akulaku to gain access to underbanked consumers… ASN Bank re-upped its investment in Symbiotics’ debt fund for micro, small and mid-sized businesses in Africa… 

Sustainable packaging. Cabinet Health secured $17 million to make sustainable packaging materials for the pharmaceutical industry… Singapore-based Alterpacks clinched $1 million to make biodegradable food containers and “bio-pellets” to replace petroleum-based resins used in manufacturing machinery. 

Alt-proteins. Liberation Labs secured $20 million to build a fermentation facility to produce alt-proteins at commercial scale.

Circular economy. Plastics recycling company Nexus Circular scored $150 million in a round led by Cox Enterprises. 

Climate tech. U.K.-based Concretene raised £8 million to green and strengthen concrete by mixing it with graphene.

Fund news. Visa Foundation invested €5 million in Amsterdam’s gender-focused Borski Fund… Dolma Impact Fund raised $72 million for sustainable development in Nepal.  

The Week’s Talent

The Rockefeller Foundation named Natalye Paquin, ex- of Points of Light, as chief operating officer… Jed Emerson was promoted to chief impact officer at Alvarium Tiedemann… Valentin Olivry, ex- of Elevar Equity, was named director of impact finance at Sorenson Impact… Lloyd McAllister, ex- of Newton Investment Management, was named head of sustainable investment at Paris-based Carmignac… Alison Taylor of Ethical Systems stepped up to clinical associate professor at NYU Stern School of Business. 

Singapore appointed Lim Tuang Liang, former chief of science and technology, to the new role of chief sustainability officer, the first such role for a country… Melanie Nakagawa, ex- of the National Security Council, started her job as Microsoft’s new chief sustainability officer… Matthew Denn, former lieutenant governor and attorney general of Delaware, joined the Draper Richards Kaplan Foundation as managing director. Nicole Pollock, former chief of staff and policy for Providence, R.I., will become the foundation’s chief of staff.

The Week’s Jobs

Fifty Years is hiring a recruiter, a synthetic biologist, a storyteller, and a chief of staff… Trimtab Impact is looking for a catalytic capital senior associate… Common Future seeks an investment operations manager… Quantified Ventures is hiring an associate director for the outdoor economy, a senior associate for environment and resilience, and other roles… The Center for Economic Democracy is recruiting a communications associate and a capital strategies associate/manager.

Boston’s Mayor’s Office of Workforce Development seeks an economic development contracts and grants administrator… U.N. Women is hiring an evaluation specialist… TruFund Financial Services is looking for an impact investment officer in New York… Boston Consulting Group is recruiting a project leader or principal for climate and sustainability… Time’s CO2 division seeks a carbon market strategist in San Francisco… Boston Trust Walden Company seeks an ESG analyst. 

The Nature Conservancy seeks a state director for Arkansas in Little Rock… The Bill & Melinda Gates Foundation is hiring a program officer for digital learning research and development in Seattle… Chan Zuckerberg Initiative is looking for a program officer for diversity, equity and inclusion in science in Redwood City, Calif… The World Resources Institute is hiring a director for the intergovernmental High Ambition Coalition for Nature and People secretariat in the Washington, D.C.-Baltimore area.

That’s a wrap. Have a wonderful weekend. 

– Jan. 6, 2022