The Calvert Foundation, distinguished by its inception of its innovative community investment (CI) note, is launching a new line of business called Capital Aggregation to pool capital using syndications to enable impact investment at scale.
Calvert expects to originate, structure, administer and participate in transactions, the announcement said. Transactions will target deals in the range of $10 million to $50 million.
Significance – Its Potential
The new structure affords Calvert the ability to meet the needs of the growing market:
Growth stage enterprises that need more larger-sized funding but are facing increased transaction cost hurdles
Impact investors, accredited and institutional, that are looking to diversify their risk / return portfolio holdings.
Calvert hopes to increase the supply of new capital sources – already in the past 24 months, Calvert has identified 50 investors who are interested in Capital Aggregation.
The new structure is also rare and one-of-a-kind, according to David Bank at Impact Alpha, typically seen in legacy financial markets. Calvert’s move could stimulate similar such syndication structures in other organizations in the future.
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Jennifer Pryce, Calvert Foundation
Ms. Pryce continued: “We are encouraged by the exciting growth we see in interest in impact investing from financial institutions, foundations, family offices and other investors, but also see an increased focus on niche portfolio creation rather than in investments that meet market demand.
We know that players active in fixed-income markets have the capacity to do enormous good, and we believe that by pooling investor interest and dollars, our Capital Aggregation business can accelerate capital flows to the communities we serve to maximize our collective impact.”
Sustainable feedstock maker Calysta, AltSchool and Bonsai AI were among this past week’s notable investing deals. Many of the ventures are based in California.
Abundant Robotics – its apple-picking robot promises to reduce the $200 billion orchard farming industry’s reliance on seasonal labor, labor that hasn’t resulted in productivity improvements in the last 20 years despite yield increases. $10 million in Series A from 7 investors. Based in Hayward, California.
Source: St. Jude Medical 2016
Advanced Cardiac Therapeutics– offers a novel catheter ablation, or electrical inactivation, technology with temperature control and high resolution electrogram to treat atrial fibrillation – a type of heart disease that affects 1-2% of Americans today (up to 18 million by 2050, according to projections, figure below). Electrophysiology global market for devices is growing fast (figure above). $45 million in venture funding to now total $69 million from 4 investors. Based in Santa Clara, California.
Atrial Fibrillation projections – Camm J. Am J Med 2013
AltSchool – Zuckerberg-funded private “network of schools” and experimental educational technology, or “edtech,” platform aims to personalize education for children, raised $40 million in Series C to now total $173 million from 25 investors. Based in San Francisco, California.
Bonsai– platform for “machine-teaching” and automating the management of complex machine learning algorithms, Bonsai promises to help developers take advantage of the latest advances in artificial intelligence or AI. $7.6 million in Series B to now total $13.62 million from 7 investors. Microsoft Ventures and Samsung among them. Based in Berkeley, California.
Calysta – this week’s spotlight, is developing a platform for a new sustainable, non-GMO alternative, biological feedstock protein called Feedkind. Its “methane-eating bacteria” based technology could one day feed pets or even people, enabling an $8 billion “biofeed” market in a decade, according to its founder. $40 million in Series D to now total $88 million in equity funding from 8 investors. Based in Menlo Park, California.
Check out Calysta’s carbon footprint report – resulting in up to “98% less water than alternative ingredients including soy and wheat proteins,” and requiring “almost no agricultural land to produce, freeing that land for other food crops.”
Epic Sciences – a developer of blood-based tests that predict drug response in cancer, using a platform it has developed to identify and characterize rare cells including circulating tumor cells (“CTCs”). $40 million in Series D to now total $85.5 million in funding from 13 investors. Based in La Jolla, California.
Grove Collaborative – customized sustainable household products such as soap, laundry detergent, paper towels via its online grocery e-commerce platform. Raised $13.5 million in venture funding (SEC filing). Based in San Francisco, California.
Outset Medical– the medical device and technology startup’s novel “Tablo” hemodialysis system allows patients to “self-serve” and monitor their dialysis treatments independently without relying on medical staff. $76.5 million in Series C to now total $187.5 million from 7 investors including T. Rowe Price Associates. Based in San Jose, California.
Paytm – is India’s largest e-commerce platform, with over 20 million registered users, offering mobile recharge, utility bill payments and its Paytm mobile wallet to replace cash. $1.8 billion in new funding from SoftBank ($9 billion valuation). Based in Noita Uttar Pradesh, India.
Other Deals of Note
Apple launches $1 billion fund for advanced manufacturing in the U.S. CEO Tim Cook noted that funding came from the company’s onshore assets rather than the billions it has offshore.
Purdue University has agreed to acquire Kaplan University, the for-profit higher education business of Kaplan Inc., in the process creating a public online university under Purdue, potentially rocking the online education market.
Jimmy Kimmel’s heartfelt monologue yesterday, sharing his new baby Billy’s open-heart surgery with footnote questions to the administration’s proposed cuts to the Affordable Care Act is really a case study of how new media can very quickly promote or derail news.
Videos of the late night host’s tearful plea is already swaying public opinion and is certain to impact votes to repeal the Obama-era healthcare act on Capitol Hill this week.
The latest bill requires insurers to provide coverage to those with pre-existing conditions, however, it also allows insurers to charge higher rates to those same patients.
If revised, states could obtain a waiver to allow insurers to charge higher rates based on the “health status” of a person if they let their coverage lapse.
Insurers could also offer policies that limit benefits for those with pre-existing conditions.
States could apply for permission to opt out of the law’s essential health benefits, including maternity, emergency care and mental health.
Up to $300 billion could be scrubbed from Medicaid.
The American Medical Association (AMA) and other consumer advocacy groups have called on Congress to vote against the measure.
House Democrats are united in opposition. House Republicans are currently short of the 216 votes needed to pass the bill – 20 have voted “NO” so far.
22 million Americans are projected to lose their healthcare insurance if the ACA is successfully repealed.
The size of the impact investing market has grown to $114 billion from $35.5 billion in 2015 and $25.4 billion in 2013, according to an investor survey conducted by the GIIN which is expected to be published in mid-May.
What’s Changed, is the Growth Real?
The latest GIIN survey is based on 208 survey respondents. Past years’ trend reports were based on smaller sample sizes – 62 respondents.
Impact Investing 2015 AUM $35B – GIIN
Still, GIIN has been carrying out annual investor surveys for several years and compiling a directory of impact investment funds and products.
By comparison, in another recent study by the GCIA, impact investing, based on that report’s definition of the category, stood at $248 billion in 2016, up from $101 billion in 2014.
Why the higher number? The GCIA report, which covers 500 SRI respondents in the U.S. region alone, includes targeted private market investments, and community investing, where capital is specifically directed to underserved communities or individuals.
Takeaway
Measuring the impact investing market is clearly not easy, so the best way, at the moment, to interpret the differing numbers is from the perspective of the market’s growth trajectory.
Numbers Aside, the Real Significance
“GIIN’s Bouri says that in 2007 and 2008 the Rockefeller Foundation convened meetings at its property in Bellagio – an area that juts into Lake Como, in northern Italy – and that the term impact investing “had come up as a potential label for the use of investment capital to address social and environmental problems”.
It stuck. And has had a big, if you forgive the term, impact.
John Goldstein, co-founder of Imprint Capital, an institutional impact investing firm that was acquired in 2015 by Goldman Sachs Asset Management, where he is now managing director, says that this was a “valuable brand pivot” that allowed “fresh thinking around practices, some of which had built up some ingrained scepticism”.
Bouri says the creation of the brand was powerful because it “connected a bunch of really exciting fragmented efforts into a unified market”.
“It coalesced all these different strategies under a bigger umbrella that makes it easier for large scale global investors to connect with and pursue more holistic strategies that will have an impact on a variety of fronts at the same time,” he says.
The $8 billion forecast in November was made by McKinsey. This new $40 billion forecast was made by The GIIN, a different group.
Based on the language used in the interview with GIIN, assumptions made on growth rates and another recent study by the GCIA, the new forecast seems optimistic.
Still, this does not preclude the possibility that impact investing’s growth rates, regulatory incentives or addressable markets in the country may change to support the new forecast. India remains ground zero for impact investing’s promise (see video).
Partial Transcript
“In India, about $4 billion has been invested as part of impact investments in about five years. On an average annual basis, it is around $ 1 billion,” GIIN’s Advisor for South Asia Anil Sinha said in an interview.
“We hope there will be 25% annual growth rate as impact investments grow and it might grow from $4 billion to $35 to $40 billion in India by 2025,” he said.
In Seattle, the initiative is being led by The Low Income Housing Institute (LIHI), a nonprofit affordable housing developer in the U.S. Northwest. LIHI manages over 2,000 housing units at 50 sites in 6 counties throughout the region.
The tiny home site, called Othello Village, now serves 300 homeless people and has moved nearly a hundred of them into real housing or more stable situations.
Why This Matters
In many cities like San Francisco, the homeless problem is an intractable social issue, costs up $240 million a year in the Bay area, and is endlessly debated with no permanent relief in site. In a recent report, San Francisco has the highest population of homeless in the U.S.
San Francisco homeless among the highest in U.S.
Seattle’s tiny home approach to help its homeless seems like one approachable solution San Francisco might consider. A social impact bond, like Denver’s or Australia’s experiment, could be underwritten to feed parts of that solution’s funding needs.
Homeless Children U.S.
In other many parts of the U.S., the numbers of homeless people are growing. There are up to 2.5 million children that are homeless in the streets of the U.S. today, according to studies.
The cost to construct the tiny houses at Othello is $2,200 each and can be additionally sponsored by private donations, according to LIHI. The tiny homes are superior to tents or even to conventional shelters because personal belongings can be locked up and tenants have access to their private units 24 hours a day.
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Sharon Lee, Executive Director of the Low Income Housing Institute at the Denny Park apartments. Photo by Ron Wurzer
“We’re very aggressive at getting people off the street, keeping them dry and warm and then getting them into real housing,” LIHI Executive Director Sharon Lee said. “Which is the goal, right?”
Why haven’t we done more of this?
One reason is a city-hired consultant blasted the idea last year, saying temporary encampments are a distraction from building real housing. This is fine in theory, but in reality we just had a lottery for 109 units of real housing and more than 2,000 people showed up. So there’s a crying need for something in the meantime.
Another reason is that any homelessness facility is politically tricky to site. A third reason, probably the biggest, is that city politicians spent much of last year bogged down in power struggles and an ill-fated crusade to open city parks to camping.
Now, to its credit, the city has committed to opening two new emergency tiny- house sites (as well as a tent camp in West Seattle). One tiny house village will be in Licton Springs, along north Aurora, and another in Georgetown. Slated to open this spring, they will together include 80 tiny houses.
Adding a handful already at other sites, that will bring us up to a grand total of about 120 citywide.
That’s one slow-rolling emergency response.
“It’s great they’re doing something, but we could easily have done so much more,” Lee says.
Human development has made much progress in the last 25 years – poverty is declining, more people live longer, fewer children are dying overall, more people are connected through technology, digital and social – yet new challenges have emerged.
Worldwide, one person in nine is hungry, one in three malnourished. About 15 million girls a year or one every two seconds marry before age 18. 18,000 people a day die because of air pollution. Every minute, 24 people on average are displaced from their home. Every minute, 4 people on average continue to get infected with HIV.
Issues like climate change, religious extremism, epidemics and persistent geopolitical issues are the main drivers. Many have been left out, or have been deprived of social and economic rights. Many are desperate to migrate to other countries, are refugees even in their own countries, or are dying everyday due to violent conflicts, disease or pollution.
Why This Matters
Human development is all about increasing progress, mobility and freedom so humans are free to choose what they value and maximize their well-being.
Impact investment can be a tool to channel investments that affirm those rights.
Available data and recent trends suggest that impact investment favor selling services and products that benefit human development or target certain population segments, like women.
Women’s Rights
State of Women 2017 – UNDP
The UN Report specifically highlighted that women in many areas continue to be deprived of social and economic freedoms to help households get relief from poverty. Deprivations facing such women are the most extreme barrier to global progress in human development.
There are 18 countries today where husbands can deny their wives the right to work, and another 100 countries where women are prevented from pursuing careers only because of their gender.
Problem-Defining Before Prescribing
The report recognizes that sustainable development is an issue of social justice. In many economies – true even in more developed countries like the U.S. – there is bias of policy options towards those with affluence and have structured legal systems and institutions in a way that preserves the power of the wealthy.
Four strategies to promote human development – UNDP
Sustainable development is also an issue of human security. Deeper understanding of threats, risks and crises from violent extremism or climate change is needed to balance the shock-driven response to threats in communities globally, and the promotion of a culture of prevention.
Sustainable development is also an issue of ability to participate in public debates, and create agency structures to represent the voices of the unheard or the deprived. Past efforts have been well-intentioned work to improve well-being, but more is needed to improve freedom of individual and collective agency.
Finally and perhaps most importantly, sustainable development is also an issue of identity. Humans deserve options to choose among different identities that they value. Insistence of a single “national” identity in many geopolitical states leads to extremism and pose a threat to human development. Minority identity groups, already disadvantaged, compete for limited economic and political resources and get left out. Policies informed by society’s past norms or social traditions often deny the freedom to choose the identities they value. These types of biases exist today in many economies, in small rural communities or in inner cities even in developed nations like the U.S.
Progress Remains Possible
The report holds out hope that progress in human development is achievable. The world has the resources, the technology, enough human ingenuity and the expertise to continue.
The Internet, absent half a century ago, now brings people together online or offline, virally in many cases over new social platforms invented just a decade ago. Mobile devices like smartphones magnify this ability, and can reach humans even in lesser developed regions like in East Africa or India. Innovation labs and venture capital in well known regions like Silicon Valley are hard at work developing the next miracle drug or technology enabler like Artificial Intelligence.
Crowdfunding, absent too just a decade ago now allows individuals to contribute small amounts of money towards philanthropic causes or projects that in many cases require larger funding.
Newer philanthropic innovations are occurring, blending traditionally philanthropic approaches with conventional investing and creating new impact investing vehicles like social impact bonds, and the Rise Fund.
Social taboos are also receiving increased attention and debate. Civil society and policymakers recognize this trend. Same-sex marriage is performed in nearly 24 countries today. LGBTQ have equal constitutional rights in 5 countries; while a small number, their rights are at least discussed in the United Nations. Norms, values and legal frameworks are evolving to empower more women.
Finally, awareness of sustainability has increased. Climate change is more visible. Responsible ways to operate businesses in a way that reduces harm to the environment or natural resources have increased. In some economies, government has subsidized or supported clean energy which have benefited business like Tesla.
Realization is growing that natural resources are everybody’s responsibility, from individuals to global institutions. Evidenced by agreements like the Paris Accord in 2016 and the UN 17 SDG goals, global consensus is emerging to ensure a sustainable world for future generations.
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Key Messages
This Report conveys five basic messages:
Universalism is key to human development, and human development for everyone is attainable.
Various groups of people still suffer from basic deprivations and face substantial barriers to overcoming them. Human development for everyone calls for refocusing some analytical issues and assessment perspectives.
Policy options exist and, if implemented, would contribute to achieving human development for everyone.
A reformed global governance, with fairer multilateralism, would help attain human development for everyone.
EverFi has raised $190 million in Series D funding to continue teaching and engaging students on its unique digital platform the essential skills in life that are not normally covered in conventional classrooms – financial education, sexual assault prevention, workplace health, diversity and inclusion.
The TPG Rise and Growth Funds led the Series D investment, contributing $150 million, along with other backers. U2 lead singer Bono, a well-known activist and a partner with TPG Growth Fund, and Jeff Skoll, a global entrepreneur and impact investor, co-founded The Rise Fund.
What EverFi Is
EverFi digital-learning courses are delivered over a Software-as-a-Service (SaaS) subscription model, allowing reach and scale. Its courses have been seen by 16 million students in the U.S. and Canada to date. Because it runs over SaaS, older PCs can be used along with more modern tablets and notebooks.
One example course is AlcoholEdu, an online alcohol prevention learning course. The digital course uses EverFi’s proprietary path-oriented and interactive user experience to provide a customized program for all students, based on their drinking choices and readiness to change. According to EverFi, over 90% of students who have taken AlcoholEdu have completed the course.
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Nehal Raj, a partner at TPG who leads tech investments, said that EverFi’s business meshes well with the firm’s investment thesis, which involves homing in on an outdated process in a market featuring relatively few competitors.
Education has traditionally been “done in a labor-intensive, inefficient way,” Raj said on a call, mentioning the paper-based products, in-person meetings, and binders filled with sign-in sheets and lists of checkboxes, that are its hallmarks.
EverFi “automates all that in a tech-centric way,” Raj added.
Based in Washington, D.C., EverFi has about 200 employees. The company sells software subscriptions to schools and businesses that help teach financial literacy (understanding mortgages and credit, for example), responsible college behavior (involving hazing and alcohol consumption), corporate compliance (like sexual harassment and diversity training), and other programs.
Among the firm’s customers are Google, Oracle(ORCL), Whole Foods(WFM), and Airbnb, as well as universities such as Harvard, MIT, and Stanford and 20,000 K-12 schools.
Next-generation 911 emergency call delivery network RapidSOS, the Dave app that helps predicts bank overdrafts and helps consumers avoid big fees, and all-natural kids meal creator KidFresh were among this past week’s notable investing deals.
RapidSOS – this week’s spotlight, is an emergency technology platform to predict and preempt emergencies before they occur, warn people in harm’s way, and connect any device (car, IoT, wearable, phone) directly to 911 and to first responders in an emergency. RapidSOS spent 4 years working closely with public safety officials across the U.S. to develop a universal data link into 911 and first responder networks to help carry 240 million 911-call traffic data each year. $14 million in Series A funding to now total $19 million from 10 investors. Based in New York, New York.
CrediHealth – platform connects consumers to better information on hospital services and costs and to doctors and specialists. $1.5 million in funding. Based in Gurgaon, India, CrediHealth works with more than 630 hospitals across the country.
Dave App
Dave – wants to save you from banking fees due to overdrafts through predictive and innovative algorithms over mobile. Banks racked up over $30 billion from such fees that penalized 25% of Americans who carry on average less than $250 in their accounts last year. Dave has also partnered with Trees for the Future — to plant trees for each 1% tip it receives. $3 million in seed funding. Based in Los Angeles, California.
EverFi– software-as-a-service and digital curriculum to schools and other organizations. TPG Rise ($2B fund) is notably among who the latest funders are. $190 million in Series D funding. Based in Washington, DC.
Faasos– aims to be the best-in-class “Food on Demand” delivery business in India. Delivers as many as 12,000 orders a day (2015). Faasos faces a crowded competition food-delivery space. UberEats in India, announced just this January, might become the new elephant in the room. $6.4 million in Series C funding to now total 60.4 million from 5 investors. Based in Pune, India.
Kidfresh– is targeting the snackables set with nutritious frozen meals and snacks for children. Studies show that in the U.S., just one out of 10 children receive the recommended daily intake of nutrition among food groups. $10 million in funding from 3 investors. Based in New York, New York.
MarcoPolo Learning – a mobile-based early childhood education startup, serves more than 5 million children in more than 150 countries, with plans to create more premium animated content for kids and distribute it through a variety of channels. $8.5 million in Series A funding to now total $11.9 million from 7 investors. Based in New York, New York.
Nutriati– specializes in “fractionating,” or breaking down garbanzo beans (chickpeas) into high-protein and gluten-free flours, which it sells to manufacturers for use in commercial products. $8 million venture funding from 4 investors. Based in Richmond, Virginia.
Sense360 – sells technology to help physically track consumers in brick-and-mortar stores and then sell that data to retailers. Opportunities to provide “360-degree view” of consumer activity offline with online. $7 million in Series A funding to now total $9.75 million from 11 investors. Based in Los Angeles, California.
Innovation of Note
Researchers at the University of California, Riverside’s Bourns College of Engineering have developed a low-cost chemical process to create nanosilicon anodes for high-performance lithium-ion batteries from used waste glass bottles.
Pope Francis became the first sitting pope to deliver a speech on TED. Broadcasted over recorded video, the Pope expressed his deep conviction on the ties or impacts we make to each other, and that “life is about interactions.”
Two main messages – Humans and their interactions are connected. Humans should be served by technology and politics, not the other way around, and humans should not be relegated to a “culture of waste.”
Urges Humility and Solidarity – “How wonderful would it be if solidarity became the default attitudein political, economic and scientific choices,in relationships among individuals, peoples and countries.Only by educating people to a true solidaritywill we be able to overcomethe “culture of waste,”which concerns, first and foremost, the peoplewho are cast aside by our techno-economic systems.” (paraphrased)
Nearly two years ago, the Pope also published an urgent call to arms on climate change. The 183-page “Laudato Si” (“Be praised”) was addressed not only to Catholics around the world but also to “every living person on the planet.”
Brief Papal Bio
Pope Francis was born in Buenos Aires, Argentina in 1936 and is as pedigreed in religion as in the sciences – he has a Masters in Chemistry and another Masters in Philosophy, and a PhD in Theology. In fact he was a chemical technician before he joined the priesthood. So his admonitions on climate science, dismissed by some last year including Governor Santorum in the U.S., has not been without an educated mind’s footing.
Since arriving at the Vatican, Pope Francis has put poor people and poverty at the center of his global agenda, and frequently makes headlines for offering tangible support to people in need. His April TED video on the subject of inclusion is, while somewhat unexpected given that no papal figure has ever given a talk on TED, therefore not a real surprise.
“0:15 Good evening – or, good morning, I am not sure what time it is there.Regardless of the hour, I am thrilled to be participating in your conference.I very much like its title – “The Future You” –because, while looking at tomorrow, it invites us to open a dialogue today,to look at the future through a “you.”“The Future You:”the future is made of yous, it is made of encounters,because life flows through our relations with others.Quite a few years of lifehave strengthened my convictionthat each and everyone’s existence is deeply tied to that of others:life is not time merely passing by, life is about interactions.
1:27 As I meet, or lend an ear to those who are sick,to the migrants who face terrible hardshipsin search of a brighter future,to prison inmates who carry a hell of pain inside their hearts,and to those, many of them young, who cannot find a job,I often find myself wondering:“Why them and not me?”I, myself, was born in a family of migrants;my father, my grandparents, like many other Italians,left for Argentinaand met the fate of those who are left with nothing.I could have very well ended up among today’s “discarded” people.And that’s why I always ask myself, deep in my heart:“Why them and not me?“
2:35 First and foremost, I would love it if this meeting could help to remind usthat we all need each other,none of us is an island,an autonomous and independent “I,” separated from the other,and we can only build the future by standing together, including everyone.We don’t think about it often, but everything is connected,and we need to restore our connections to a healthy state.Even the harsh judgment I hold in my heartagainst my brother or my sister,the open wound that was never cured, the offense that was never forgiven,the rancor that is only going to hurt me,are all instances of a fight that I carry within me,a flare deep in my heart that needs to be extinguishedbefore it goes up in flames, leaving only ashes behind.
3:38 Many of us, nowadays,seem to believe that a happy future is something impossible to achieve.While such concerns must be taken very seriously,they are not invincible.They can be overcome when we don’t lock our door to the outside world.Happiness can only be discoveredas a gift of harmony between the whole and each single component.Even science – and you know it better than I do –points to an understanding of realityas a place where every element connects and interacts with everything else.
4:27 And this brings me to my second message.How wonderful would it beif the growth of scientific and technological innovationwould come along with more equality and social inclusion.How wonderful would it be, while we discover faraway planets,to rediscover the needs of the brothers and sisters orbiting around us.How wonderful would it be if solidarity,this beautiful and, at times, inconvenient word,were not simply reduced to social work,and became, instead, the default attitudein political, economic and scientific choices,as well as in the relationships among individuals, peoples and countries.Only by educating people to a true solidaritywill we be able to overcomethe “culture of waste,”which doesn’t concern only food and goodsbut, first and foremost, the peoplewho are cast aside by our techno-economic systemswhich, without even realizing it,are now putting products at their core, instead of people.
