Difficulty as a signal for opportunities in deep tech

Greetings Agents of Impact!

🚀 Claude, meet ImpactAlpha Edge. Based on yesterday’s enthusiastic response, we’re running this one back. ImpactAlpha Edge subscribers have exclusive access to a Claude connector that infuses AI workflows with the intelligence of ImpactAlpha. Plug the connector into Claude to build strategies, map markets, draft communications and access insights from ImpactAlpha’s entire 12-year archive, as well as our Edge data on thousands of LPs, GPs and allocations. Book a demo and get an Edge.

📣What’s holding back asset owners from impact investing? Many foundations, family offices and other asset owners haven’t yet made allocations to impact investing.  ImpactAlphawants to understand what’s holding them back and what could help them take action. If you’re a decision-maker willing to share your perspective, we’d like to schedule a brief, off-the-record conversation (we’ll anonymize any insights we share publicly). Just complete this short form. Not you? Please forward to a friend or peer. 

• Difficulty as a signal for opportunities in deep tech
• Odyssey’s quest to streamline solar procurement
• Senegal-based Tanel Health exits to French insurer Alan
• Disaster prevention as an investable opportunity

Featured: GP Spotlight

Wavemaker Partners is writing early, small checks for ‘difficult’ deep tech.Venture capitalists are shoveling money into deep tech, including robotics, industrial tech, defense tech and, of course, AI. Singapore-based Wavemaker Partnersarrived on the scene way before it was cool. The early stage VC firm, which backs tech startups in the Asia-Pacific region, isn’t interested in popular technologies where a small check is sure to get a big return. Instead, it looks for the ideas that need building, proving and convincing. “Anything of significant long-term value has to be difficult,” co-founder Paul Santos tells ImpactAlpha. “It’s not that you’re looking for the difficulty. But the difficulty is a sign that you could be well rewarded if you solve it.”

• Greener concrete.Wavemaker’s latest investment is Neocrete, a company in New Zealand with an activating additive for concrete that reduces the need for emissions-intensive cement. Startups have raised hefty sums to reduce the environmental footprint of concrete, which is responsible for 8% of global CO2 emissions. Last month, Wavemaker invested in Neocrete’s $3.5 million equity round, alongsideIcehouse Venturesand Temasek Trust’s Catalytic Capital for Climate and Health. Neocrete’s dry-powder additive can be mixed with cheap materials like volcanic ash and fly ash. “Greener concrete that is better and cheaper than traditional concrete – it sounds too good to be true,” says Santos. Neocrete’s team of 15 in Auckland, New Zealand is facing “well-funded, better pedigreed” teams in bigger tech hubs, he says. “The true spirit of venture is you take a risk other people won’t take.”

• Overlooked opportunities.Santos, an entrepreneur and angel investor from the Philippines, started Wavemaker with entrepreneur and VC investor Eric Manlunas15 years ago. “Most people didn’t want to take technology risks in our region, they only wanted to do business model innovation,” says Santos. The partners committed to supporting entrepreneurs with a social or sustainability lens, and zeroed in on under-valued opportunities in deep tech and enterprise tech. One of its enterprise tech portfolio companies is Growsari in the Philippines. The company helps the country’s more than one million “sari-saris” – mom-and-pop shops – source inventory directly from manufacturers. “Not too many VCs would understand this business,” says Santos.
• The fun of fundraising.The partners raised $6 million for their first fund, mostly from friends and family. Their second fund raised 10x more capital and attracted Temasek and the International Finance Corp. Funds three, four and five are all over $100 million; Temasek and the IFC have reupped. “When you invest in the stuff that we do, which is not popular because it does not look like the things others have seen elsewhere, you have to fight to prove that you deserve the money,” says Santos. Wavemaker has fully exited its first fund and returned money to investors. “If you have a valuable company, somebody will want it.”
• Keep reading,“Wavemaker Partners is writing early, small checks for ‘difficult’ deep tech,” by Jessica Pothering.

Sponsored by SOCAP

Don’t miss the Capital Provider Experience at SOCAP26 in Chicago. This curated programming within next month’s SOCAP agenda is designed for LPs, GPs, investors, family offices, foundations and other capital allocators. The Capital Provider Experience will go beyond traditional panels or networking sessions to offer practical insight into where the market is moving, who’s leading with credibility, and how to structure and implement solutions. 

• Exclusive offer for the ImpactAlpha community: Save $200 with code ImpactAlpha26and join the Capital Provider Experience at SOCAP26 in Chicago, Oct. 12-14. Register now

Dealflow: Energy Access

☀️ Odyssey raises $74 million to streamline solar procurement in emerging markets.Households and businesses in emerging markets are hungry for clean, reliable solar energy. Boulder, Colo.-based Odyssey Energy Solutionsconnects thousands of small solar installers and engineering, procurement and construction companies, or EPCs, with financing and equipment suppliers in more than 50 countries.  “The focus of financing for distributed renewable energy has historically been on post-construction capital – funding that flows once a project is built,” said Odyssey’s Emily McAteer. Odyssey aggregates solar equipment orders to give its network of small business buyers access to wholesale pricing and covers upfront costs for installers and EPCs.

• Equity and debt. The $27 million in equity came from Broadscale Group, FMO, Al Mada Ventures, Union Square Ventures, Twelve Below, FJ Labs and Transition Ventures.The $47 million in debt came from British International Investment, Belgium’s BIO, Cygnum Capital, TripleJump and others. Read on.

• ⚡Energy efficiency. Gridsight, a Sydney-based company that helps utilities tap into latent capacity in the electric grid without added infrastructure, raised $26 million in a Series B round. Gridsight is expanding in the US, where AI-powered data centers, EVs and electrification are driving up power demand. Insight Partners, Galvanize, Airtree, Energy Transition Ventures and Aera VC invested in the round. Gridsight says it has supported 600 megawatts of solar capacity since the company was founded in 2020. (Gridsight)

• 🩺Investing in health. Tanel Health, a Senegalese health insurance startup serving roughly 70,000 employees of businesses in Senegal and Côte d’Ivoire, was acquired by Alan, a French health insurer backed by soccer athlete Kylian Mbappe and South African tech investment firm Prosus. The deal gives Tanel’s early backers, including Nigeria-based Ventures Platform, Asia Africa Investment & Consulting and angel investors, an exit. Tanel will rebrand as Alan, and supports Alan’s expansion beyond Canada and Europe.(Financial Times)

• ♀️Gender smart. Axxo’s second Female Catalyst Fund secured a €33.3 million ($39 million) final close to invest in early-stage, women-led startups in Europe. The fund was backed by the European Investment Fund, Aurum Impact, Speedinvest, Cherry Ventures, EnBW New Ventures and others. More than half of the fund’s limited partners are women. The Berlin-based, women-led firm is launching a matchmaking platform to connect aspiring entrepreneurs with potential co-founders. (Auxxo)
• 🚰Water access. Dutch family office and impact investor DOB Equity invested in Irrisol Engineering, which designs, builds and operates solar-powered water systems in Uganda. Irrisol offers pay-as-you-go plans based on household incomes. “Partnering with DOB Equity gives us the capital, expertise and long-term partnership we need to replicate our model in more communities across Uganda,” said Irrisol’s founder Joash Bwambale. (Africa Private Equity News)

Impact Voices: Prevention Dividend

Investing before the damage is done. The money institutions spend repairing preventable harm offers a roadmap to overlooked and investable solutions. That’s the premise of a guest post on ImpactAlpha by Impact Entrepreneur’s Laurie Lane-Zucker, based on his new book, “The Impact Entrepreneur Breakthrough,” which is out this week. Insurers pay after wildfires, utilities pay for grid failures, employers pay when illness sidelines workers, governments pay for disaster response. In each case, Lane-Zucker argues, the harm has been priced; that price points to a business opportunity. He calls the value created by moving capital upstream the “prevention dividend”. The question, he says, is who pays and when. “If the answer is a named institution, there may be an investable prevention business on the other side of that expense,” he writes. “If the answer is ‘everyone, a little,’ the opportunity may be just as valuable – but it requires a different financial architecture.”

• Two models.Take Wildfire Defense Systems, which contracts with insurers to defend individual homes before fires arrive. Whisker Labs‘ fire-detecting sensors are now bought in bulk by more than 20 insurance providers. State Farmhas deployed them across two million homes. Where costs are diffuse – think pandemics, biodiversity loss and conflict – Lane-Zucker calls for different instruments entirely, from resilience bonds to outcomes contracts that route public savings back to whoever financed the intervention. Prevention businesses “get waved off as philanthropy because they create public benefit,” he says. “Structurally uncapturable interventions get pitched as though venture economics alone will somehow solve the value-capture problem. Both errors waste capital.”
• Keep reading, “Investing before the damage is done,” by Laurie Lane-Zucker.

Agents of Impact: Follow the Talent

Hearstlab hiresEmily Fallon Baum as a venture advisor… Ninety One appointsTherese Hernandez as head of institutional for the midwest and strategic relationships in the US… The Asian Infrastructure Investment Bank appointsGustavo de Rosa as chief financial officer… The Gates Foundationis looking for an advisor for AI global policy and advocacy, as well as associates for its Strategic Investment Fund for South Asia and Africa… UpMetricsseeks a senior client manager. 

CitiGroupis hiring an impact investing vice president… JPMorganChaseseeks a vice president of US governance and global philanthropy… Elevate Philanthropy is searching for a director of operations and a consultant… Amalgamated Bankis hiring a climate portfolio manager… Lowercarbon Capitalseeks an investor to join its early-stage investment team… Applications for the 2027 LabStart Fellowshipare open… Equitable Facilities Fundis looking for a director for school lending and underwriting… Georgia Resilience and Opportunity Fundseeks a senior director for program innovation… Farmhand Ventures is on the hunt for an associate.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!