The Brief: Jan 27, 2017
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Hello ImpactAlpha readers!
Q&A with Derek Handley: From B Team to VC
Derek Handley has a ticket to go to space with Virgin Galactic. But first the veteran of Richard Branson’s B Team has big ambitions here on earth. His new firm, Aera VC, has made six impact investments using its “social term sheet” and is building an “activist community” of family offices.
“These companies will do great. Positive impact on their communities or the world. They should also perform from a financial and venture perspective,” Handley tells ImpactAlpha. “We think there’s going to be more and more of them appearing and we think that there are still few early-stage funds that are specializing in this space.”
Read the Q&A with Dennis Price at ImpactAlpha.
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#Deaflow: Follow the Money
Good absorbs Upworthy in social-impact media merger. The two companies have huge combined reach but both have struggled to find profitable business models. Together, the companies claim 276 million followers on Facebook and 31 million monthly unique visitors to their websites. Upworthy, which is focused on online video, will remain a standalone brand under Good Worldwide. The companies will combine their newsrooms and about 20 people from both companies were told Friday that their jobs had been eliminated, Politico reported. Good Magazine was founded in 2006 by Ben Goldhirsh, Max Schorr, and Casey Caplowe. Upworthy had raised $12 million in venture backing in two rounds, according to CrunchBase.
Obama adds impact investor to foundation board. Like the former president, Deval Patrick, the former Massachusetts governor turned private-equity guy, combines politics and finance. He is now raising Bain Capital’s Double Impact fund. Also on the board for the foundation on Chicago’s South Side: David Plouffe, Obama’s former campaign manager, who recently joined the $45 billion Chan Zuckerberg Initiative. “The conversations I have with Silicon Valley and with venture capital pull together my interests in science and organization in a way I find really satisfying,” told Bloomberg last year. Will the former president become the impact investor-in-chief?
Green Digital Finance Alliance aims to boost climate action. Yes, there’s an app for that. Ant Financial, the Chinese online-payments processor that spun off from Alibaba, launched the alliance with the UN’s Environment Program to drive digital technologies that support climate action. About 72 million people already use One, Ant’s smartphone app, that lets users create a carbon account and earn ‘green energy credits’ for reducing their footprint. Ant has more than 450 million customers and processes about 58 percent of China’s online payments through its ‘Alipay’ service.
Fish 2.0 stocks the pipeline for sustainable seafood investments. The seafood industry is notorious for opacity, fraud and egregious labor abuses. The Fish 2.0 competition has become a go-to source for investors looking for companies that can tap the growing demand for seafood and reverse the depletion of the world’s oceans. The third round of the competition opened with 19 sponsors including USAID and the Packard, Moore and Walton Family foundations. Finalists will vie for $50,000 and attention from investors at Stanford University in November….Meanwhile, Catalina Sea Ranch in Southern California raised $2 million to expand its offshore mussel production and develop its “Ocean Internet-of-Things” monitoring and data tracking platform for sustainable aquaculture.
#Signals: Ahead of the Curve
Elon Musk takes the business case for a carbon tax to Trump. The CEO of electric car company Tesla is the latest to catch the president’s ear with the suggestion to put a price on carbon, floating the climate-friendly idea at a meeting of business insiders at the White House. As CEO of ExxonMobil, Rex Tillerson, now Trump’s nominee for Secretary of State, also backed the idea, which has support from other oil and gas companies as well. There’s widespread agreement that putting a price on carbon emissions would drive market innovation; the biggest opponents are anti-tax politicians.
Ignia demonstrates investment opportunities in Mexico’s emerging middle class. The Monterey-based venture capital firm has invested $200 million in companies supporting upward economic mobility. The emerging middle class represents 70 percent of the population, with $426 billion in annual purchasing power. Ignia’s latest investments have been in Abra, a mobile money startup using blockchain, the technology behind Bitcoin; Pangea Money Transfer, an app-based cash transfer service targeted at the $25 billion Mexicans in the U.S. send home every year; and Sr. Pago, which lets even unbanked merchants accept credit cards. “The Mexico of tomorrow will be built by the small and medium-sized businesses of today,” says Ignia’s founder, Álvaro Rodríguez. “The emerging middle class is just as viable and successful a market as the top of the pyramid.”
#2030: Long-Termism
Can a robot do your job? Almost half of the activities for which people are paid almost $16 trillion in wages could be automated with current technology, according to an ongoing study from McKinsey Global Institute.
Whether that includes your job depends on the extent to which your tasks are predictable and repeatable and how much human interaction and judgment are required. In food service, almost half of all labor time involves predictable physical activities such as preparing and serving food and beverages or collecting and cleaning dirty dishes. Three out of four of those activities could be automated. In manufacturing, 90 percent of the activities of welders, cutters, solderers, and brazers do could be automated; for customer-service reps, less than 30 percent.
The good news: People and technology will increasingly work together as activities are automated. Overall, automation could boost global productivity by up to 1.4 percent annually by 2065, the report predicts. That could mean more jobs, not fewer. Bar-code scanners and point-of-sale systems in the 1980s reduced store labor costs by about 4.5 percent. But cashiers were still needed; the number of checker jobs grew by an average of more than two percent between 1980 and 2013.
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