Impact Finance Bulletin: Source raises US$130m to scale renewable clean water solutions

Our regular impact finance bulletin brings you the latest funds, deals and programmes in the world of investing for good. Read on for our selection of impact investment headlines from the past month.

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Global: Clean water social enterprise Source raises more than US$130m to scale renewable solutions

US: EdTech provider APDS raises US$7m to 'transform the correctional system' with career readiness platform

India: LeapFrog Investments, Asian Development Bank and British International Investment among investors in Shubham Housing Development Finance US$112m funding round

Global: US$6trn funding gap to improve lives of 1bn people living urban slums, new GSG report shows

Global: 18 global financial institutions back ‘Just Transition’ label plan for financial industry

Global: Wysa raises US$20m to expand its AI-powered mental health services

UK: Future of social investment funding under pressure as Dormant Assets consultation opens

US: US$150m public-private partnership launches to support businesses in disadvantaged communities in Connecticut

More impact finance news in brief

 

Global: Clean water social enterprise Source raises more than US$130m to scale renewable solutions

Sustainable drinking water social enterprise Source has raised more than US$130m to scale its offering and accelerate innovation to provide off-grid, renewable ways to produce clean water. 

Source’s hydropanel technology uses heat from the sun to draw water vapour out of the air and transform it into drinking water even in remote, low-humidity locations. It currently operates in 50 countries around the world.

The fundraising round was co-led by Breakthrough Energy Ventures and Drawdown Fund and other investors include Microsoft’s Climate Innovation Fund, Fifth Wall, Blackrock, Duke Energy and Harvard Management Company.

The company plans to further scale its commercial, community and consumer offerings globally and to accelerate innovation in renewable water technologies.

Carmichael Roberts, co-lead at Breakthrough Energy's investment committee, said: “Over the last half-dozen years, Source has been building a tightly interconnected set of global solutions that have the power to make potable water poverty a thing of the past. As Source continues to execute and grow, we believe the company will have a generational impact.”

 

US: EdTech provider APDS raises US$7m to 'transform the correctional system' with career readiness platform

Social enterprise and certified B Corp APDS, whose digital education platform helps incarcerated people become job-ready and earn a living wage after release, has raised US$7m in series C funding.

APDS currently serves learners in more than 110 correctional facilities across 17 US states. Its curriculum, the “Whole Human Framework” delivers assessments and plans that “motivate, engage, educate, and equip incarcerated people to empower themselves”, the company says. It claims to be the only dedicated correctional EdTech provider that delivers technology and services for free to incarcerated learners.

“APDS is poised to transform the correctional system,” said Harris Ferrell, APDS CEO.  “The momentum is growing across the country to rethink our society’s approach to incarceration and preparation for reentry… APDS has been a leader in this process through our Whole Human Framework approach to education,” said Harris Ferrell, APDS CEO. 

The momentum is growing across the country to rethink our society’s approach to incarceration and preparation for reentry

He added the business could only achieve its mission “with dedicated investors who are double-bottom line oriented.”

The financing round was co-led by ​​ETS Strategic Capital and New Markets Venture Partners. The new funding will help the company to “develop our product, supporting the momentum of sales, and connecting our learners with the resources and support they need to obtain living wage jobs,” Ferrel said.

 

India: LeapFrog Investments, Asian Development Bank and British International Investment among investors in US$112m Shubham Housing Development Finance

Shubham Housing Development Finance, a specialist mortgage lender that provides home loans to low income consumers across India, has announced a total investment of US$112m led by Leapfrog Investments, British International Investment, Asian Development Bank (ADB) and Premji Invest. 

The company aims to bridge the gap in availability of formal credit to low-income households in India that struggle to access mortgages. Shubham says it believes that “access to credit should not be a barrier to buying a home – particularly for low-income consumers and those working in the informal economy”.

Christine Engstrom, director for Asian Development Bank’s Private Sector Financial Institutions Division, said the investment was the bank’s first in an affordable housing company in India. 

She added: “This investment will provide growth capital to support operations in the peripheries of larger cities, tier-II and tier-III [large to medium] cities, providing housing loans to lower-income households. This will also improve access to housing finance for women, a key focus area for Shubham and ADB.”.

Shubham has more than US$300m in assets under management and a presence across nine Indian states. It claims to have had an impact on more than 61,000 families and 140,000 individuals

 

Global: US$6tn in impact investing needed to improve urban slums, new GSG report shows

The Riverside Slums, Cartagena, Colombia
 
Above: The Riverside Slums in Cartagena, Colombia. Photo credit: Reg Natarajan
 

Impact investors must turn their attention to improving the lives of the 1bn people who live in slums across the Global South, according to the Global Steering Group for Impact Investment.

According to the latest report from the group, which promotes impact investment across the world, Informal Settlements: No longer invisible, US$6tn is needed to lift one in eight of the world’s population out of slum conditions.

Despite the urgent need for investment, public funds are insufficient to upgrade slums, says GSG, and investments in slums have been largely overlooked by investors to date. 

Read more on Pioneers Post.

 

Global: 18 global financial institutions back ‘Just Transition’ label plan for financial industry

Schroders, Leapfrog and British International Investment are among 18 financial institutions that have backed a new initiative that will develop a 'Just Transition' label for investment products that deliver a fair and inclusive transition to a net-zero economy.

The Just Transition Finance Challenge was launched by the Impact Investing Institute, a not-for-profit organisation running research and initiatives to advance impact investing worldwide, with support of the City of London Corporation, at the Finance for Impact summit held in London last week. 

Founding members of the challenge include public and private sector asset managers and owners such as Schroders, Leapfrog Investments, Blue Orchard, Bridges and British International Investment. They collectively have £3.6tn in assets and assets under management. 

Read more on Pioneers Post.

 

Global: Wysa raises US$20m to expand its AI-powered mental health services

Wysa, a digital platform that uses artificial intelligence (AI) to support people with mental ill health, has secured a US$20m to expand to new markets and improve the accessibility of its services.

The round was led by HealthQuad, a venture capital fund focussed on health, and other investors include British International Investment, the UK’s development finance institution, and Google Assistant Investments among others.

Using AI, the platform assesses patients according to their needs, and supports them with cognitive behavioural therapy (CBT), a talking therapy that can help people manage problems such as anxiety or depression by changing the way they think and behave. CBT exercises take place in an app with an “emotionally intelligent” AI agent rather than a human therapist. The platform also directs patients to further mental health services or crisis support.

Several studies have validated the efficacy of Wysa’s technology, and it has achieved FDA Breakthrough Device Designation – which is granted by the US’s Food and Drug Administration to tech innovations that “provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions”.

Wysa’s customers include employers, insurers and health services that want to support their workers, customers and patients facing mental health issues, such as Accenture, Colgate-Palmolive, the National Health Service (NHS) in the UK, and the Ministry of Health in Singapore.

Mental health triaging of patients using AI which is fast, effective and non-stigmatising for patients living in unaccepting societies answers a huge need

Charles Antoine-Janssen, chief investment officer at HealthQuad, said: “The needs for Wysa are present all across, from high income to low-income countries. 

“Mental health triaging of patients using AI which is fast, effective and non-stigmatising for patients living in unaccepting societies answers a huge need in India, the rest of low income Asia, Africa as well as the wealthiest countries of the world.”

The company says it has a user base of over 4.5m people across 65 countries. The funding will enable the company to expand into the US, UK, India and other global markets, and improve wider usability through multi-lingual support and easier access via WhatsApp. 

 

UK: Future of social investment funding under pressure as Dormant Assets consultation opens

Nadine Dorries and Nigel Huddleston dormant assets consultation

Above: Secretary of state for digital, culture, media and sport Nadine Dorries, left, and civil society minister Nigel Huddleston
 

A public consultation opened on 16 July about how £738m of dormant assets should be spent in England, potentially putting at risk the future flow of millions of pounds for social investment alongside financial inclusion and youth.

The Dormant Assets Scheme reunites people with lost financial assets, and, if the money remains unclaimed, uses it to back social and environmental initiatives across the UK. 

The Consultation on the English Portion of Dormant Assets Funding, launched by the UK government’s Department for Digital, Culture, Media and Sport, comes as the Dormant Assets Scheme has been expanded to include not only bank accounts but also insurance, pensions and investments. This, the government estimates, will unlock around £880m new funding for good causes across the UK. England receives just under 84% of this, which will be around £738m in the coming years, says the government.

Read more on Pioneers Post

 

US: US$150m public-private partnership launches to support businesses in disadvantaged communities in Connecticut 

The Connecticut Small Business Boost Fund, a public-private partnership that will provide low-interest loans to small businesses and nonprofits in Connecticut, launched earlier this month. 

The programme aims to provide  flexible working capital to ventures in low-income and historically underserved communities . It is open to organisations with 100 or fewer full-time employees and annual revenues of less than US$8m, and will offer loans ranging from US$5,000 to US$500,000 at a 4.5% interest rate.

The state of Connecticut made a foundational investment of US$75m and other investors include Citizens Bank, M&T Bank, and First Republic Bank. The fund will deploy loans through local community development financial institutions (CDFIs) and lenders specialised in serving underserved and underbanked communities.

Connecticut Governor Ned Lamont said: “This fund was established to support small business owners who may have previously experienced barriers to accessing financial support and works with and through community lenders that are dedicated to equitable lending practices.”

The fund will offer support and guidance services, in addition to the financial assistance. “We consider this programme to be a one-stop shop for small-business owners,” Connecticut Department of Economic and Community Development (DECD) commissioner David Lehman said.

 

More news in brief:

  • Global: Schroders has published its Institutional Investor Study 2022, which shows that impact investing is a preferred approach for sustainable investment among 48% of institutional investors surveyed. 
  • Global: Xpansiv, a global carbon and environmental commodities exchange platform, has announced a US$400m investment from Blackstone.
  • Spain: Barcelona-based private equity firm Miura Partners has launched a new impact fund with a €150m target, La Vanguardia reports.
  • UK: Aristata Capital has raised nearly £40m for its first impact litigation fund aimed at supporting people and communities affected by damaging commercial activity to gain compensation and “close the justice gap” in commercial litigation.
  • India: British International Investment is to invest up to US$250m in a new electric vehicle venture to be launched by Indian automotive group Mahindra & Mahindra.
  • Kenya: Family Bank and Aqua for All have announced a €2.9m partnership to establish an unsecured loan facility aimed at community-based water service providers.
  • France: The Mutuelles Impact fund has announced a €80m close to support impact businesses developing innovative solutions to improve healthcare.
  • Global: Phenix Capital’s Impact Report on Resilient Economies reveals that more than 1,105 funds worldwide currently contribute to building resilient economies and €232bn has been committed towards these funds since 2015.
  • Senegal: BLOC Smart Africa Fund has invested US$360,000 in Afrikamart, a Senegalese agritech start-up.
  • Global: Systemiq Capital has announced the US$70m first close of its second fund to back early-stage climate tech entrepreneurs, focussing on food and material production and transportation.
  • Global: Global VC firm Cathay Innovation has launched a new €1bn fund to invest in companies that are driving the sustainable transformation of industries, Sifted reports.
  • UK: Ofwat, the economic regulator of water services in England and Wales, has announced a new “open access” competition for innovators in the water sector, making £4m available to entries up to £500,000.
  • UK: Impact property fund manager Resonance has acquired a 15-property portfolio in Greater Manchester for its National Homelessness Property Fund 2.
  • US: The Tipping Point Fund on Impact Investing has awarded a US$250,000 grant to the Value Reporting Foundation (VRF) to support the organisation's research on standards for human capital management. 
  • Global: ​​KKR has raised nearly US$1.5bn for its Global Impact Fund II, Impact Alpha reports.
  • France: Groupama Social Impact Debt, a newly launched private debt impact fund from Groupama AM, has announced a first close at €150m. The fund aims to contribute to job creation and to increase the purchasing power of its investees' employees.
  • US: Partners Capital has announced the close of its inaugural private equity environmental impact fund, Partners Capital 15 degrees Fund, at US$143m.
  • Nordics: eBay Ventures, Nysnø, Bring and others have invested US$20m in second-hand fashion platform Tise (Via Dealroom).
  • Global: Seedstars announces investors including Rockefeller Foundation have committed a total of US$20m to its second emerging market seed stage fund, which will invest in startups looking to improve finance, commerce, health, work and education across developing countries.

 

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