This partnership with AlphaMundi and Factor[e] will extend efforts to discover, vet, and engage with early-stage ventures—fostering private sector investment in clean energy solutions for agriculture in developing countries.
Powering Agriculture has partnered with AlphaMundi and Factor[e] to form the Powering Agriculture Investment Alliance. The objective of the Alliance is to accelerate the development and deployment of clean energy innovations that improve agricultural productivity in the developing world by increasing the distribution and supply of new and existing solutions. Specifically, the Alliance seeks to help commercially viable companies grow and scale by improving their investment-readiness and increasing their access to financial capital. By July 2021, the Investment Alliance will catalyze a minimum of $25 million in private sector finance for ventures with the potential to achieve transformational development impact in the clean energy-agriculture nexus.
AlphaMundi and Factor[e] have a track record of making profitable investments in socially and environmentally sustainable enterprises that generate substantial net benefits to society. Both organizations embrace Powering Agriculture’s goal of improving lives in the developing world by helping to scale clean energy solutions that increase agriculture productivity and/or value. Powering Agriculture funds are helping to subsidize on-the-ground activities that will enable AlphaMundi and Factor[e] to discover, vet, and engage with earlier-stage ventures—effectively helping to build capacity to absorb more private sector capital.
Founded in 2007 by a group of partners with extensive experience in the financial industry as well as responsible investments, microfinance and philanthropy, the AlphaMundi Group has provided debt and equity financing to scalable social ventures in strategic sustainable human development sectors such as microfinance, affordable education, fair trade agriculture and renewable energy.
The AlphaMundi Foundation, via the Switzerland-based investment firm AlphaMundi Group, has been investing in clean energy and sustainable agriculture companies since 2009. The Washington, D.C.-based nonprofit, was founded in 2016 and provides three key functions: technical assistance for companies in emerging markets, quantitative impact measurement, and field building for the impact investing industry. In March 2018, the AlphaMundi Foundation finalized a $3 million partnership over three years to join the Investment Alliance. The group will prioritize investments in companies with a three-year minimum track record of operations, $500,000 or more in annual revenues, and demonstrated social or environmental impact.
Through the Investment Alliance, the AlphaMundi Foundation supports technical assistance and improved impact measurement for companies operating in the clean energy-agriculture nexus, while the AlphaMundi Group contributes private sector investment funds through direct debt and equity investments in one of its managed impact investment funds. Additionally, the AlphaMundi Foundation will continue to broaden the pipeline of investible clean energy companies for the AlphaMundi Group and other investors and therefore catalyze additional private sector funding to this space (or expedite the flow of private capital funds) in a manner that would not have been otherwise possible.
Factor[e] is a low-volume, high-touch investor that supports a small number of early-stage energy-related companies that have both the potential to positively affect millions of people and a path to financial sustainability. Founded in 2013, Factor[e] makes equity investments in the range of $200,000–$700,000 for very early seed-stage start-up companies operating in frontier and emerging economies. In addition to making equity investments, Factor[e] provides a wide range of technical and business resources (e.g. engineering design, financial planning, business model development, and validation) and works with ventures to close multiple rounds of funding.
Factor[e] sees itself as bridging the gap between donor/concessional capital and more commercially oriented capital. Factor[e] invests at early stages of company development—with inherent technology risk—at a time when concessionary capital is still vital for growth. In addition to financial resources, Factor[e]’s philosophy is oriented toward providing hands-on support to help grow these businesses. Especially in the areas of technology, Factor[e] has engineers, technologists, and entrepreneurs on staff to provide guidance and mentorship to each of the investee companies.
Factor[e] in particular seeks technology-based companies that align with their thesis around loss reduction and waste minimization as well as sustainable intensification:
Loss Reduction and Waste Minimization
- Physical plants that serve as integrated platforms that link farmers to high-value markets
- Efficient, traceable logistics for ag value chains, formalizing and squeezing waste out of informal markets
- Hyper low-cost farmgate food loss reduction technologies
- Financial innovation to extend access to cold storage financing, especially refrigeration-as-a-service
- Modes of input finance and delivery at dramatically lower transaction costs, built for scale
- Optimized input design for lower cost, higher returns, and reduced environmental impact
- Agricultural mechanization within reach—financially and physically—through mechanization-as-a-service
- Efficient production of nutrient-rich organic fertilizers