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#Featured: ImpactAlpha Original

A loan fund for low-income Indian schools takes the prize in Sustainable Investing Challenge. A team of MBA students from Northwestern University’s Kellogg School of Management that proposed a low-interest loan fund for India’s 400,000 low-fee private schools took first place in the seventh annual Kellogg-Morgan Stanley Sustainable Investing Challenge.

The tone at Friday’s competition in New York suggested the tide is shifting towards long-term, sustainable investing. “Past teams in this competition have been walking against the wind,” Dave Chen, chairman of Equilibrium Capital and a founder of the Sustainable Investing Challenge, told the 10 finalists. “You guys get to walk with the wind. It’s always good to have the markets on your side.”

Keep reading Jessica Pothering’s coverage of the challenge on ImpactAlpha.

#Dealflow: Follow the Money

Indian microfinance firm Spandana is back from the brink. The Hyderabad-based firm has raised equity of $100 million and $170 million in debt that lets it fully repay its past loans. Founded in 1998, Spandana was one of India’s largest microfinance lenders in the microfinance hotbed of Andhra Pradesh, until the market crashed in 2010 following the imposition of severe microfinance regulations in the state. (At the time, average household debt in the state was nearly 8.5 times the national average.) Spandana had more than a half-billion dollars in outstanding loans and was forced to restructure its debt. "Our coping strategy was very simple: stay liquid when in stress," said founder Padmaja Reddy. Today, Spandana is one-third its size in 2010, operates in 13 Indian states and has expanded into distribution of mobile phones and solar lamps. The equity raise was led by private equity firm Kedaara Capital and included the Ontario Teachers’ Pension Plan. Debt financing was provided by IndusInd Bank, Yes Bank, and ICICI Bank.

Raise.Me raises $12 million to build college “micro-scholarship” pipeline. Raise.Me matches colleges and universities with eligible financial aid recipients in high school. The platform lets universities allocate “micro-scholarships” to high school students as rewards for good grades or extracurricular activities. Students can receive backing from multiple schools, though only receive the aid they “bank” from the school they attend. Some begin college with $20,000 in scholarships. Raise.Me, which launched in 2012, works with 19,000 high school counsellors nationwide, and has helped universities like NYU, Northeastern and Georgia Tech award $1 billion in aid. The financing was led by Redpoint Ventures and included GSV Acceleration, Owl Ventures, First Round Capital and SJF Ventures.

Incofin’s agRIF fund reaches $140 million for smallholder farm finance. The Belgian impact investor raised an additional $27 million from a new crop of investors, including AXA Investment Managers, Belgium-based family office Korys, and Invest in Visions in Frankfurt. Incofin launched agRIF in 2015 with the goal of raising $200 million to invest in microfinance institutions offering financial services for low-income smallholder farmers in Latin America, Africa and Asia. The latest raise brings agRIF’s total to $140 million, $34 million of which has been deployed. Incofin hopes to close the fund in June.

The Yield closes $6.5 million in financing to expand farm sensors from Australia to U.S. The Australia-based company produces sensors that inform farmers about “microclimate” data on their farms, like water and soil quality. Farmers then use a subscription service to make harvesting decisions. Many large, sophisticated farming operations still largely rely on sight and instinct to address problems and make harvesting decisions. The agriculture “internet of things” startup was backed by Bosch, KPMG and AgFunder, an online investment platform. It intends to use the latest funding to expand into irrigated crops and to the U.S. The Yield has raised $11.5 million to date. The Yield originally served Australian oyster farmers.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

Where Tesla still lags Ford: Self-driving cars. Electric car maker Tesla hit a milestone last week when its market value of $49 billion overtook Ford’s $46 billion (while selling 76,000 cars last year to Ford’s 6.7 million). But Big Auto still may have an edge over Silicon Valley upstarts in the race for self-driving cars. A recent report from management consulting firm Navigant ranks Ford ranks first in the U.S., and Tesla 12th. Other mainstream car manufacturers like General Motors, Renault and Volkswagen all ranked higher than self-driving car champions like Google and Uber. “The technology is great, but unless you can build tens of thousands of cars and get people in those cars, it’s not really all that useful,” says Navigant’s Sam Abuelsamid. Tesla may be focused on other technologies, such as battery storage for utility-scale electricity grids.

Water takes its place as a material risk – and investment opportunity. Banks, institutional investors and consumers are demanding companies disclose climate risks. But a related risk factor may be more pressing (and lucrative): water. A report from the U.K.-based Carbon Disclosure Project found that the impacts of droughts, floods, and water pollution cost businesses $14 billion last year—a five-fold increase from 2015. The companies in the London Stock Exchange’s FTSE Group’s Water Infrastructure and Technology Index have outperformed the more than 7,000 companies listed on FTSE’s All World index by 22 percent in the past five years. In 2015, institutional investors representing $2.6 trillion in assets called on water-intensive food and beverage companies to improve water management. Only one-quarter of large and mid-size companies have set water efficiency targets.

#2030: Long-Termism

Can the U.S. cut food waste in half by 2030? The United States wastes more food than any other country in the world—more than 60 million tons per year that are worth $160 billion. Some of that is lost before leaving the farm, but most is discarded by households, grocery stores, food manufacturers and restaurants. Meanwhile one in seven U.S. households are food-insecure.

The Obama administration’s 2015 plan to cut America’s food waste in half by 2030 was backed by the U.S. Department of Agriculture and industry players (see, “Ripe for Action: How a 20 Percent Cut in Food Waste Could Yield $100 Billion in Benefits). A number of startups are targeting the challenge globally, including Inspirafarms in east Africa and Central America and Yume in Australia.

In the U.S., cities, which manage most waste, may be the most effective drivers, according to Dana Gunders of the National Resources Defense Council. Some cities are experimenting with “pay-as-you-throw” models that charge residents for the volume of garbage they toss. Others are rolling out curbside collection of organics. “Put together, those make for a nice suite of options for cities,” she says.

Onward! Please send any news and comments to TheBrief@impactalpha.com.