The Brief | July 14, 2023

The Week in Impact Investing: Inclusion

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ImpactAlpha

TGIF, Agents of Impact, and Happy Bastille Day. Vive la révolution!

Baking bigger pies. Justice, equity and diversity may be on the ropes, but inclusion as a business strategy appears to have legs. Designing products and services for the broad base of workers, customers and communities is becoming the proven path to long-term growth, outcompeting extractive practices like predatory lending, overdraft fees and excessive parking fines. Working with the Siċaŋġu Lak̇ota Oyate on the Rosebud Sioux tribal lands in South Dakota, a group of foundations provided early catalytic grants to set the Wolakota Buffalo Range on the path to financial sustainability. ​​”Successful projects and businesses in tribal communities have to be community-driven, led by the folks on the ground,” Siċaŋġu Co’s Aaron Epps told ImpactAlpha’s Jessica Pothering. 

Fund managers on this month’s Liist of open impact funds, put green twists on inclusive, place-based investing, with flexible loans, receivables financing and diverse leadership. Paths to inclusive wealth run through residential and commercial real estate, as Roodgally Senatus and I reported this week, including shared equity strategies for businesses and homeowners. Says Partners in Equity’s Talib Graves-Manns, “That type of capital is necessary for a lot of our really brilliant entrepreneurs that know how to hustle and have the grit to take it to the next level.” Inclusion as a word may already be overused; as a strategy for success, it’s just getting started. – David Bank 

The Week’s Podcast

🎧 Impact Briefing. David Bank chats with Musa Mabesa, head of South Africa’s Government Employees Pension Fund, in the latest conversation from the “Connecting capital to communities” gathering at the Salzburg Global Seminar, sponsored by the Robert Wood Johnson Foundation. Host Monique Aiken has the headlines. 

Putting Africa’s pension funds to work for Africa’s social infrastructure. Drawing Africa’s pension funds deeper into impact investing is one of the goals of this week’s Africa Impact Summit in Cape Town. To explore the opportunities, and the obstacles, ImpactAlpha sat down with Mabesa, who is principal executive officer of South Africa’s Government Employees Pension Fund. The GEPF is the largest pension fund in Africa with about 1.8 million members, including 550,000 pensioners, and approximately $140 billion in assets, and the largest investor in South Africa’s stock market. “We’re a significant player, and that makes us a responsible investor, because we will not only look after the investments of our members, but we’ve got a responsibility to watch out for South Africa Inc. as a general investor,” Mabesa tells ImpactAlpha. 

Most of the GEPF’s assets are invested in public equities in South Africa, and most of the rest in fixed-income investments. Mabesa’s focus on “impact” is largely limited to the 5% allocated to alternative investments, including private equity. As of last year, the fund had $725 million committed to seven Africa-focused private-equity funds, including several Pan African Infrastructure Development funds. The GEPF acquired 25% of one of the country’s biggest mortgage providers, SA Home Loans, to help finance the firm’s program to back mortgages for pension fund members. “We try to leverage the muscle that we have, as a big investor in the economy,” says Mabesa, “to see how we can ease the burden of providing houses for members and use the strength of the balance sheet that we have to assist our members tin accessing housing.” Keep reading.

The Week’s Agent of Impact

Amy Duffuor, Azolla Ventures: Bridging climate gaps with catalytic capital. Many investors look at promising new climate solutions and say, “Great, come back to me when you have traction.” Azolla Ventures is more likely to say, “How can we help you get there?” Azolla, launched in 2021 by the nonprofit Prime Coalition as a follow-on to its 100% catalytic climate Prime Impact Fund, just clinched $239 million, combining $80 million in philanthropic capital with $159 million in impact-aligned investment capital. Prime was an early supporter of startups such as Lilac Solutions, a developer of novel lithium extraction technology that went on to raise $170 million from investors including Breakthrough Energy and T. Rowe Price. Azolla, which blends both catalytic and commercial capital, aims to de-risk solutions with big decarbonization and commercial potential. “We’re really trying to peel back the layers and find those diamonds in the rough and the climate verticals that are falling through the cracks,” says Duffuor, a general partner.

The daughter of immigrants from Ghana, Duffuor grew up in Philadelphia. She earned a master’s degree in migration studies at Oxford University and an MBA at The Wharton School. She consulted on supply chains in London, ran an early stage social venture accelerator in Southeast Asia, and, as a renewable power banker, helped residential solar provider Sunnova with its initial public offering in 2019. The tug of early-stage companies and mounting concern about climate change brought her to Prime Coalition to first manage the Prime Impact Fund and then co-found Azolla Ventures. “I wanted to work with thoughtful people who were intentional about doing things differently,” she says. “We wanted to play a role in democratizing access to impact investing.”

The Week’s Dealflow

Deal spotlight: A social media platform for India’s poor. The founders of Delhi-based Gram Vaani had a vision for giving India’s rural poor a greater voice and agency. They launched a voice- and mobile-based social media platform in 2008 to enable rural communities to collect and share local information in local languages. Over 15 years, the model has evolved as technology has changed, but the company’s purpose is the same: to provide community-driven content to people rarely given a voice in mainstream media and society. 

Gram Vaani reaches three million people in eight local languages with information on healthcare, agriculture, worker rights, child development and governance. Gram Vaani’s mobile app is growing, but in-person engagement remains core to the model. “This is not expected to become the next Facebook,” says Mahesh Yagnaraman of Acumen India, which led Gram Vaani’s latest equity round. “It’s targeted for local people and for the people themselves to be the agents.” Media Development Investment Fund reupped in the round.

  • Workforce development. Acumen backed Gram Vaani because of its workforce-centered engagement “channels.” A youth-focused channel posts work opportunities and helps migrants access information and government benefit schemes and resolve disputes. A channel for women helped female factory workers secure better bathroom facilities; another allowed female healthcare workers to speak openly about sexual and reproductive health products for women in their communities. “It was moving to see the level of candor and transparency with which women could communicate freely and safely about those issues,” Yagnaraman tells ImpactAlpha.
  • Taking risks. Media is unfamiliar investment terrain for Acumen, but the investor has known the Gram Vaani team for years: founder Vijay Sai Pratap was an Acumen fellow. Successful exits in recent years makes it possible for Acumen to take risks in pursuit of its impact-first investment mission, says Yagnaraman. “Those exits allow us to put money into companies many mainstream impact investors wouldn’t.”
  • Keep reading. 

Clean energy. Canada Pension Plan Investment Board and Power2X will invest €130 million in green molecule projects… Carlyle secured $591 million for a planned $2 billion renewable and sustainable energy fund… MySol Grid Zambia clinched $7.5 million in debt from the Facility for Energy Inclusion… Oklo, a small-scale nuclear fission startup, will go public via a special purpose acquisition company headed by entrepreneur Sam Altman.

Economic inclusion. Aequitas Impact Fund provided a $2 million loan to a Nicaragua-based unit of Pro Mujer… JAX Microfinance Fund raised $250,000 from the Community Foundation for Northeast Florida to invest in non-predatory local small business lenders… Lagos and Berlin-based Propel scored €2.5 million to support remote hiring of African talent.

Financing fish. Dutch sustainable aquaculture venture The Kingfish Company secured €32 million in convertible debt from Ocean 14 Capital… eFishery raked in $200 million for sustainable seafood in Indonesia.

Investing in health. French health tech company Sonio secured $14 million for an AI-powered device that automates ultrasound reporting and neonatal monitoring… MyDawa, a woman-led healthcare startup in Kenya, scored $20 million to expand its online health consultations, pharmacy and lab services… NLC Health Impact Fund scored €20 million to invest in early-stage medtech, biotech and digital healthcare companies.

Low-carbon transition. CarbonCure scored $80 million to commercialize lower-carbon concrete… Delhi-based Battery Smart raised $33 million for its EV battery swapping service…  Prime Coalition’s Azolla Ventures raised $239 million to catalyze climate capital… Nexus PMG raised $50 million to support waste-to-value projects… Singapore-based NEU Battery Materials raised $3.7 million from Shift4Good and SGInnovate to recycle lithium-ion batteries… Spring Lane Capital clinched $290 million for second sustainable infrastructure fund… Suffolk Technologies raised $110 million for sustainable construction innovation.

Muni impact. Impact muni bond: Rehabilitating and retrofitting affordable housing in New York.

Returns on inclusion. First Australians Capital raised half of a targeted $30 million fund to invest in Australia’s Indigenous entrepreneurs… Insight Partners secured $118 million to invest in diverse fund managers.

The Week’s Talent

Spring Lane Capital brought on Jason Scott, ex- of Encourage Capital and Renewable Resources Group, as entrepreneur-in-residence… The McKnight Foundation’s Tonya Allen was named co-chair of The Presidents’ Council on Impact Investing, alongside Surdna Foundation’s Don Chen… Isaiah Oliver, ex- of the Community Foundation of Greater Flint, took the helm of the Community Foundation for Northeast Florida, succeeding Nina Waters… KKR managing director George Aitken took over as the firm’s chief of global impact in Asia, replacing Chee-Wei Wong who stepped down last week.

The Week’s Jobs

💼 Share the week’s impact jobs. Want to post a job in The Brief? Drop us a note.

US Jobs

In New York: Veris Wealth Partners is looking for an impact investing senior research analyst; the Global Impact Investing Network seeks a lead climate solutions investing strategist and a director of impact principles; ERM is looking for a consulting director for ESG and impact post-investment value creation; and One Rock Capital Partners is hiring an ESG senior associate.

In California: Founders First Capital Partners has an opening for an investor relations associate in San Diego; and East Bay Community Energy is recruiting a structured finance manager in Oakland.

Strada Education Foundation is hiring a strategic investments platform manager in Indianapolis… Mirova is looking for an RFP project manager in Boston… Builders Vision has an opening for an operations accountant in Chicago. 

International locations

In Singapore: GenZero is on the hunt for a carbon sales and management vice president; Convergence Blended Finance is recruiting an Asia-Pacific associate; and ABC Impact seeks an investment analyst or associate… Impact Partners is hiring a project assistant in Paris… Global Partnerships is recruiting a global portfolio impact officer in Nairobi… Alterna Impact seeks an impact business development fellow in Guatemala City. 

Remote jobs

The Charter School Growth Fund is looking for an investment manager… Mercy Corps Ventures is on the hunt for a consultant… Runway has remote openings for a development director and a director of people and culture. 

That’s a wrap. Have a wonderful weekend. 

– July 14, 2023