We’re pleased to report that three SV2 Investees had exits this year, and that SV2 made four additional investments, all with a focus on environment or climate adaptation and mitigation. We benefited from a terrific learning series on Investing in Climate Solutions, led by Partners Jennifer McFarlane, Tony Stayner, and Paul Traina. As we enter our eighth year of impact investing at SV2, we’re poised to continue and deepen our practice together.
Exits
SV2 had three portfolio exits this year: OpenInvest and Nepris were both acquired at significantly increased valuation, returning 8x (OpenInvest) and 6x (Nepris). Village Enterprise’s Development Impact Bond was repaid at the maximum rate, returning 1.3x.
OpenInvest is a Public Benefit Corporation offering a transparent, values-oriented alternative to traditional investment portfolios. Using technology, OpenInvest tailors investment portfolios according to the specific values of investors to help promote social and environmental good. SV2 invested $50,000 in July 2017, and received an 8x return (71% IRR) in June 2021 when OpenInvest was acquired by J.P. Morgan.
Nepris connects educators and learners with a network of industry professionals virtually, bringing real-world relevance and career exposure to students. Nepris also provides a skills-based volunteering platform for organizations to engage in education outreach within the future workforce. SV2 invested $25,000 in August 2016, and received a 6x return (42% IRR) in November 2021 when Nepris was acquired by PSG Equity.
Launched in 2017, the Village Enterprise Development Impact Bond (DIB) funded a ‘graduation out of poverty’ program run by the non-profit Village Enterprise, enabling more than 14,000 first-time entrepreneurs, 75 percent of them women, in Kenya and Uganda to start small businesses and form business savings groups. This first ever development impact bond for tackling extreme poverty in Africa exceeded its targets, sustainably improving the livelihoods of 95,000 East Africans. Under the impact bond model, investors (including SV2) provided upfront funding for the work, with ‘outcome payers’ repaying the investment according to the results achieved. Since all agreed targets were met, the outcome payers repaid Village Enterprise the maximum amount. SV2 invested $25,000 in March 2018, and received a 1.3x return (8% IRR) in February 2022 when the outcome payers repaid the loan.
Learning
SV2 Partners Tony Stayner, Jennifer McFarlane, and Paul Traina worked together to plan and lead a six-part learning series on Investing in Climate Solutions. This learning series covered various approaches which investors might consider for personal asset allocation in support of climate solutions, including Public Investments, Real Assets, Venture Capital, and Defensive Strategies. Our guest experts’ slides and recordings of the sessions can be viewed here.
New Investments
Following the Venture Capital presentation, SV2 Partners considered two climate-focused venture funds and recommended a $50,000 investment in Buoyant Ventures. This is SV2’s second investment in a venture fund and the first in a fund led by a 100% women-owned VC firm. The fund invests in companies offering digital solutions to communities and businesses to mitigate ( i.e., reduce emissions) and adapt (i.e., address the risk to lives and livelihoods today as well as climate justice and equity) to climate change. Buoyant Ventures invests in seed through Series B rounds. Impact is best summarized by the fund’s primary targets, UN SDGs: #13 – Climate Action, #7 – Affordable Clean Energy, #6 – Clean Water and Sanitation, and #12 – Responsible Consumption and Production. Buoyant seeks to invest in and help build high performing diverse teams.
SV2 made three other investments this year in companies focused on environmental impact. Change:WATER Labs and Sanivation both work on sanitation. Poor sanitation is responsible for a wide range of problems including the spread of disease, diarrheal deaths, and water pollution. Sanitation affects all 17 of the Sustainable Development Goals (SDGs). Croptix is a smart Ag subscription platform using data and machine learning analytics to help farmers detect and manage fatal diseases in permanent crops to save their farms. This means saving the livelihoods of many farmers, not just for that year, but for several years, as Croptix is dealing with permanent crops. Early detection also stops the unnecessary use of pesticides. This company’s work is related to SDG 12 ( Responsible Consumption and Production), SDG 15 (Life on Land), and SDG 8 ( Decent work and Economic growth).
As we enter our eighth year of impact investing at SV2, we are poised to continue and deepen our work as we apply lessons learned. We invite you to join us! If you’re new to impact investing, learn more about how it works at SV2 by checking out this overview. The SV2 Impact Investing Working Group meets monthly to discuss prospective impact investment opportunities, hear pitches from social entrepreneurs, and perform due diligence in order to make informed investment decisions on behalf of SV2. All Partners are welcome to begin regularly attending IIWG meetings at any point in the year or are welcome to audit meetings on a drop-in basis. This is a fantastic way to hear from inspiring social entrepreneurs and participate in a hands-on and highly engaged investment process. Please reach out to Jody Chang with questions.