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#Deaflow: Follow the Money
EXEO raises $100 million to fill Africa food investment gap. Rapid urbanization, buy-local opportunities and increased precision on African farms are creating private-equity investment opportunities. The Pan-African firm EXEO Capital raised more than $100 million in the first close of Agri-Vie Fund II. The new fund continues the same investment thesis as EXEO’s first fund, which has committed $100 million to a dozen food processing and ag ventures in East and Southern Africa. Institutional investments from Africa, Europe and North America, led by Norway’s development agency, Norfund, show swelling investor interest in Africa’s private equity markets, particularly for mid-size and growth stage companies.
Backstage Capital eyes second fund for women- and minority-led startups. It took Arlan Hamilton 16 months to convince Marc Andreessen of Andreessen Horowitz, Brad Feld of Foundry Group, ex-Salesforce executive Susan Kimberlin and others to put up $5 million for Backstage Capital to invest in women- and minority-owned businesses. Hamilton expects it to take as little as two months to raise Backstage’s second fund, as Silicon Valley investors wake up to VC and tech’s lack of diversity. Backstage has invested in 31 businesses. The new fund will aim to seed three-times as many, focusing on businesses started by women of color.
University of California breaks with Wells Fargo over values. The University of California is the latest to tell Wells Fargo it is taking its banking business elsewhere. UC canceled $475 million in business with the bank, including a $300 million line of credit. The university was under pressure from the Afrikan Black Coalition over Wells Fargo’s investments in private prisons, but a university spokesman said the move was spurred by Wells Fargo’s scandal over unauthorized bank and credit card accounts. The city of Seattle has moved to end $3 billion in business with the bank over its direct lending on the Dakota Access pipeline.
Japan will use dormant bank accounts for social impact investments. The new fund, to be launched in 2019, will be modeled on the UK’s Big Society Capital, which uses unclaimed bank accounts to finance charities and social enterprises. Portugal and Israel have also moved to create such capital pools. An estimated 100 billion yen ($886.5 million) is sitting in dormant bank accounts in Japan, though only a portion would be directed to the social-impact fund. Big Society Capital has collected more than $375 million from dormant accounts since 2012, along with $250 million from commercial banks.
South African pilots social impact bond for low-interest student loans. The experiment is an attempt to make education more affordable after student protests over tuition hikes that most middle-income families can’t afford. The government has raised 200 million rand ($15 million) to begin piloting its Ikusasa Student Financial Aid Programme for 2,000 students in 2018. The program will offer low-interest loans to university students from families earning less than 600,000 rand per year who are enrolled in high-demand subjects like engineering and mathematics. Low-yield bonds issued to savings depositors will fund the program.
#Signals: Ahead of the Curve
The Pakistani Dream? The middle class in wealthy countries like the US may be shrinking, but it’s growing in countries like Pakistan. Relative stability in politics and national security has paved the way for upward economic mobility for the Asian country’s 200 million people. The poverty rate has fallen more than 50 percent since 2002, creating a 38 million-strong middle class. Consumer products giants like Nestlé say demand in Pakistan is surging along with growing disposable incomes. Pakistani homes are increasingly equipped with middle-class products like TVs, washing machines and refrigerators. The so-called “developing world,” particularly in Asia, is expected to be home to 64 percent of the global middle class by 2030.
More than a half-million apprenticeships bridge the skills gap. The 130,000 apprenticeships that have been registered in the past two years bring the U.S. total to 505,000. Once common in skilled trades and manufacturing before these sectors went into decline, apprenticeships in the U.S. are making a comeback, fueled by $265 million in federal funding last year. Amazon last week said it would train 10,000 U.S. veterans for careers in tech. The U.K. is pushing to add three million apprenticeships by 2020.
Internet of Things is making cities smarter. First, apps tackled the inconveniences of city living: On-demand rides, rooms and meals, then laundry, cleaning services, and even power tools. Now, sensors are helping residents and city planners make cities more efficient and less stressful. CB Insights’ compendium includes urban Internet of Things startups doing everything from tracking traffic congestion to developing disaster plans. Many startups are based far from the usual hubs, in places like New Orleans and Reno. This makes sense, given that such mid-sized cities are the fastest growing urban centers; transparency and efficiency will be needed to keep pace with growing populations.
#2030: Long-Termism
24 million: The projected global workforce in clean energy (nearly triple the 8.1 million in 2015) by 2030 – if the world meets U.N. targets on climate change and development. “The continued job growth in the renewable energy sector is significant because it stands in contrast to trends across the energy sector,” says Adnan Amin, director-general of the International Renewable Energy Agency. Already, in the U.S. more people are employed in solar power than in generating electricity from coal, gas and oil energy combined.
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