New Collaborative Looks to Make Market-Rate Investments with Conservation Impact

Conservation Finance Network
By Vincent Caruso
May 21, 2019

Impact Cap­i­tal Man­agers (ICM), a net­work of impact-focused ven­ture cap­i­tal and pri­vate equi­ty funds, is out to dis­prove the notion that invest­ing for impact requires sac­ri­fic­ing finan­cial return. On the con­trary, ICM mem­bers aim to match or exceed the over­all per­for­mance of the mar­ket, and they believe social and envi­ron­men­tal objec­tives con­tribute to their suc­cess.

ICM mem­bers invest in com­pa­nies across a wide range of growth stages and indus­tries, includ­ing sev­er­al with con­ser­va­tion-ori­ent­ed mis­sions. Their work sheds light on how this grow­ing branch of impact invest­ing can help address con­ser­va­tion chal­lenges.

The Promi­nence of Mar­ket-Rate Impact Invest­ing

Since launch­ing in April 2018, the ICM net­work has grown from 25 funds with a com­bined $5 bil­lion under man­age­ment to 40 funds rep­re­sent­ing over $11 bil­lion of impact cap­i­tal. Its mem­bers, based in North Amer­i­ca, span the gamut of mar­ket-rate impact investors. The net­work includes ven­ture cap­i­tal firms that helped estab­lish the field, like DBL Part­ners, SJF Ven­tures and Bridges Fund Man­age­ment, along with main­stream finan­cial insti­tu­tions that more recent­ly embraced impact invest­ing, includ­ing the TPG Rise Fund and Bain Cap­i­tal Dou­ble Impact.

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Port­fo­lio Com­pa­ny Engage­ment

When the oppor­tu­ni­ty aris­es, impact ven­ture cap­i­tal funds can con­tribute envi­ron­men­tal exper­tise to assist port­fo­lio com­pa­nies in tar­get­ing new, con­ser­va­tion-ori­ent­ed busi­ness oppor­tu­ni­ties. For exam­ple, DBL Part­ners, an ICM mem­ber, lever­aged its knowl­edge of organ­ic and envi­ron­men­tal­ly sus­tain­able farm­ing after invest­ing in Farm­ers Busi­ness Net­work (FBN), an ag-tech com­pa­ny that uses machine learn­ing to ana­lyze aggre­gat­ed data from its mem­ber farm­ers. FBN pro­vides farm­ers with democ­ra­tized infor­ma­tion that improves out­comes by enabling bet­ter oper­a­tional deci­sions, includ­ing fer­til­iz­er appli­ca­tion, land use prac­tices and seed selec­tion.

DBL has been a key investor in FBN since June of 2014 and a board mem­ber since 2015. Dur­ing that time, DBL has engaged in an ongo­ing dia­logue with FBN’s lead­er­ship about the company’s poten­tial to address key issues in farm­ing today, includ­ing work­er access to health­care and the shift to sus­tain­able farm­ing prac­tices. In part due to these con­ver­sa­tions, FBN intro­duced a health insur­ance prod­uct for the fam­i­lies of its mem­bers in 2018. That same year, FBN acquired AgriSe­cure, a start­up that helps farm­ers of large row crops switch to organ­ic pro­duc­tion.

After the acqui­si­tion, we felt empow­ered as a board mem­ber to advo­cate for the busi­ness oppor­tu­ni­ty pre­sent­ed by organ­ic pro­duc­tion,” said Nan­cy Pfund, founder and man­ag­ing part­ner at DBL. “We worked with the lead­er­ship at FBN to pub­lish a white paper explain­ing the process of going organ­ic and why it was com­pelling. The paper pro­vid­ed a well-researched, effec­tive com­mu­ni­ca­tion tool to mar­ket the new organ­ic dimen­sion of their plat­form.”

The paper, “Got Organ­ic? Wel­come to the Age of 21st Cen­tu­ry Organ­ic Farm­ing,” out­lines the eco­nom­ic oppor­tu­ni­ty pre­sent­ed by organ­ic farm­ing and pro­vides a roadmap for con­ven­tion­al row crop farm­ers inter­est­ed in tran­si­tion­ing. Since its release to more than 3,000 farm­ers at the Decem­ber 2018 Farmer2Farmer con­fer­ence in Oma­ha, Nebras­ka, the paper has helped increase inter­est in organ­ic pro­duc­tion across the FBN net­work, and the com­pa­ny now plans to orga­nize addi­tion­al edu­ca­tion­al oppor­tu­ni­ties for farm­ers. For exam­ple, DBL and FBN are orga­niz­ing a work­shop and organ­ic farm tour dur­ing the sum­mer of 2019 in Nebras­ka that will include tra­di­tion­al and organ­ic farm­ers along with pub­lic and pri­vate enti­ties engaged in farm finance.

To read the full arti­cle, vis­it Con­ser­va­tion Finance Net­work