Brightcore Energy: Why We Invested

By Chris Wu and Clara Purk

Emissions from residential and commercial buildings account for 29% of total US greenhouse gas emissions. Total energy consumption by this sector makes up 40% of total US energy consumption, with 60% of utility-scale electricity generation coming from fossil fuels. As a result, any successful climate mitigation strategy must focus on reducing emissions from the built environment. Energy efficiency programs and onsite renewable energy installations are some of the most cost-effective ways for buildings to cut emissions, as they also reduce energy costs for building owners. Many cities and states are committing to ambitious climate action plans, implementing stricter building energy efficiency and clean energy standards and offering incentive programs for energy efficiency and renewables, providing strong regulatory tailwinds for companies driving improved energy efficiency.

Solution

Brightcore Energy (“Brightcore”) is an “efficiency as a service” company providing project development, implementation and funding for a range of energy efficiency and renewable energy retrofits for commercial and institutional (“C&I”) customers. Its product offerings include LED lighting, solar PV, and geothermal, with targeted growth in battery storage, EV charging, and other renewable solutions. Brightcore's implementation services include project development, engineering and design, permitting, interconnection, procurement, installation, maintenance and service. In addition, the expansion of its sustainable financing capabilities enable Brightcore to act as a capital provider for customers and finance efficiency and clean energy projects at $0 upfront cost.

Why We Invested

Since it began operating in 2016, Brightcore has built a strong reputation for delivering efficiency projects with over 150+ projects completed and 76,100 metric tons of GHG avoided. The company’s leadership team has a proven track record of executing in this market, with co-CEOs Rob Krugel and Konstantin Braun having worked together for 20+ years running a C&I solar PV developer and working in structured finance. We believe Brightcore’s strategic positioning in the Northeast will enable it to take advantage of the growing market for efficiency and renewable energy projects in key states. For example, New York City’s Local Law 97 sets increasingly stringent limits on carbon emissions for approximately 50,000 buildings in order to meet NYC's required 40% citywide emissions reductions by 2030 (from a 2005 baseline). New York state’s RPS (Renewable Portfolio Standard) requires that 100% of the energy that utilities sell must come from renewable resources by 2040 and New Jersey must reach 50% by 2030. Similarly, RPS policy goals have been set in many states throughout the country, including MA, PA, CT, CO, and CA. Brightcore’s sustainable financing strategy, enabled by this funding led by SER Capital Partners, will further its competitive advantage in this increasingly crowded market.

Impact

We believe that Brightcore has the ability to make a positive impact on climate change and the environment by improving energy efficiency and reducing fossil fuel consumption within the built environment. LED lighting projects reduce electricity usage by about 60-70% while also addressing waste, as the lifespan of an LED light is 50-100x that of an incandescent bulb. Solar PV reduces the reliance on fossil fuels and offsets the emissions required to create and install a project within a year of operation, on average. Continued expansion of geothermal energy will replace old boilers that burn fuel oil or gas with a clean, renewable energy source by drawing heat from below ground. Installing more battery storage systems will help make the energy grid more resilient by shifting load to off-peak hours and displacing dirty gas and oil-fired peaker plants, enabling further reduction in GHG emissions within the built environment, helping cities meet their sustainability goals.

Traxen: Why We Invested

By Elizabeth Coston McCluskey and Tasha Seitz

More than 70% of goods shipped in the US are transported via truck, representing 11.84 billion tons. Long haul trucking is a massive source of fuel consumption: the International Council on Clean Transportation estimates that tractor trucks represent 71% of all fuel consumed by heavy-duty vehicles. Fuel also represents a significant portion of the operating cost for trucking and logistics, at 24%, second only to labor costs. As engines and aerodynamics have become more fuel efficient over time, driver behavior has become a more significant factor determining fuel consumption. A study conducted by the American Trucking Associations’ (ATA) Technology and Maintenance Council found a 35% difference between most efficient and least efficient drivers based on speed, acceleration, braking and route selection. 

Solution

Traxen provides a cloud-connected intelligent cruise control system that assists drivers to reduce fuel consumption during highway driving while improving safety & drivability. Using sensors that can be retrofitted onto existing trucks combined with data on weather conditions, high definition maps, estimates of internal loads, and projected traffic, Traxen can manage a truck’s speed from end to end to optimize for safety and fuel efficiency. 

Why We Invested

The founding team and board at Traxen is steeped in the industry and the problem they are addressing, with backgrounds in autonomous driving, electrification and connected vehicles. The team’s vision is to enable a pathway for trucking and logistics companies to realize the benefits of autonomous vehicles as technology and policy evolves. While it is early, there are strong indications regarding the effectiveness of the technology: a third party study verified by the North American Council for Freight Efficiency (NACFE) showed an average 7% improvement in fuel efficiency in a side-by-side comparison for trucks carrying identical loads along a typical long haul route. 

Impact

There is potential for compelling environmental impact given that long haul trucking is such a significant means of freight transportation and consumer of fossil fuels, and long haul is likely to be the last segment in trucking to adopt electric vehicles given challenges related to charging infrastructure and range. A conservative, “back of the envelope” analysis suggests that a 5% improvement in fuel efficiency would translate to reducing greenhouse gas emissions by 25 million metric tons/year in the US, or the equivalent of taking more than 5 million cars off the road. 

OnlineMedEd: Why We Invested

By Ander Iruretagoyena and Priya Parrish

Medical doctors and other healthcare professionals play a vital role in society, as COVID-19 has reminded us all. While the United States is a leader in educating doctors, there is a global need for well-trained physicians and healthcare infrastructure to deliver high-quality care. At the same time, the medical field offers prospects of high quality, well paid, and stable jobs for those who can break into the competitive job market through rigorous academic training. However, due to the systemic limitations of the current medical education model, there is a significant lack of diversity among medical professionals. In the U.S., for example, 6% of active physicians are Latino, 5% are Black, and 36% are Female. Specifically, the lack of diversity among faculty (predominantly White (63.9%) and Male (58.6%)) and unequal resources across schools to support students with rigorous coursework, disadvantages students of diverse socio-economic backgrounds. Compounded with the detrimental effects of implicit bias in delivering care to racial and gender minorities, there is a meaningful opportunity to help narrow the disparities in health outcomes.

Solution

OnlineMedEd (OME) is a global digital healthcare learning platform for aspiring and practicing healthcare professionals. Currently, more than 86% of medical students in the United States use OME to supplement knowledge needed to pass their board exams, as well as in their clinical practice. 250,000 monthly active users learn from the platform, while an average of 50,000 are global users in 191 countries. 

Growth among international users has grown 50% as OnlineMedEd has proven its ability to create effective supplementary curriculum beyond medical school walls. Over the past year, OME launched its Crash Course suite of free online video tutorials to more than 30,000 redeployed health care providers helping during the pandemic. The company has also transitioned medical school faculty online, and is a natural partner to support institutions in the transition towards active digital-enabled learning. 

Built by founders with medical education experience, the platform is centered around the PACE (Prime, Acquire, Challenge, Enforce) pedagogical method. For each lesson, students have access to: 

• Prime: Lesson overviews, companion notes, diagrams and key takeaways

• Acquire: Peer-reviewed video lectures comprehensively covering the topic and contextualizing within the broader curriculum 

• Challenge: Board-style questions or quizzes; additional video-based explanations for Q&A 

• Enforce: Digital Flashcards for review, automatically set to a study calendar based on memory science

Why We Invested

OnlineMedEd’s platform has attained a leading market share, strong user engagement, and favorable brand preference in the traditional medical school market for supplementary education. With its freemium business model, the company is already democratizing access to medical careers by helping students graduate from rigorous programs and succeed as practicing physicians.

The Company originally served 3rd and 4th year medical students, but in the past two years, OnlineMedEd has invested to expand content to address 1st and 2nd year students, creating a full digital medical curriculum. This foundational success positions OME well to expand into a multi billion-dollar addressable market across adjacent verticals (e.g. Nurse Practitioners, PAs, and Dental), geographies, and the complete student lifecycle.

We also see an opportunity for OnlineMedEd to support the development of the next generation of healthcare providers that more fully represent the populations they serve. To do this, OME is partnering with medical schools and other educational institutions to provide its premium content to all students. With effective supplementary content, students from all backgrounds and in schools across tiers and geographies will enter the job market to serve rural and urban communities globally.

Impact

Given its reach, Impact Engine believes OnlineMedEd has an immense opportunity to help increase representation in the medical field in order to actively combat widening health outcome disparities. In addition to its intentionally accessible product, OME is also ensuring diverse representation in patient and practitioner case studies to create more inclusivity within medical schools. Impact Engine’s involvement will focus on strengthening these efforts and exploring new drivers of impact, such as implicit bias training curriculum and programs to increase the diversity of students enrolling in medical school.

Market Wagon: Why We Invested

By Elizabeth Coston McCluskey and Tasha Seitz

Consumers today are more aware than ever of where their food comes from, and they are concerned about food safety, transparency, and access to local supply. Sales of locally produced foods in the US grew from $5 billion in 2008 to $12 billion in 2014 and was expected to reach $20 billion in 2019. However, the current grocery system in the US was built to serve 20th century needs. In a pre-digital era, stores focused on consolidation and centralization in order to maximize efficiency. Today, that means that mainstream retailers carry a limited amount of local food. Prominent retailers like Walmart only carry 11% local-sourced produce, and even progressive stores like Whole Foods may only have 20% local offerings. Local food producers are looking for new ways to sell to consumers who are increasingly interested in connecting directly with their food sources.

Solution

Market Wagon is an online farmer’s market that shortens the food supply chain by sourcing and distributing local food directly to consumers. Their platform enables farmers to connect directly with end consumers, creating a direct supply chain. The direct interactions between consumers and producers allows them to develop relationships and to build trust. Farmers have profiles on the site that promote brand content, list product information such as pricing and availability, and facilitate direct interaction via Q&A. Consumers are able to search by category across multiple suppliers and combine selections into a single online order, creating a true alternative supply chain to grocery retailers. The company requires vendors to fulfill customer orders at central distribution facilities, and uses a distributed labor pool to complete last mile deliveries. This enables the logistics model to remain capital-light and scalable. 

Why We Invested

The co-founders have extremely relevant and complementary backgrounds. Nick Carter, the CEO, grew up on a farm in Indiana before becoming a tech founder. Daniel Brunner, the COO, has deep experience with grocery operations and supply chains from his time as VP of Grocery Solutions at Kiva Systems (acquired by Amazon). Market Wagon has demonstrated very strong momentum and growth. Prior to COVID they achieved 200% growth Y/Y. Since COVID, they have been able to capitalize on disruptions to food supply chains and consumer preferences to expand even faster. The company has taken a thoughtful approach to launching in new markets thus far. In February of this year they had 6 locations, all in Ohio and Indiana. That number more than tripled to 20 locations in 8 states across the Midwest since then. This funding round will be used in part to fuel their next phase of geographic expansion.

Impact

Local food sold directly to consumers more than doubled from $1.3 billion in revenue in 2007 up to $2.8 billion in 2017. According to the USDA over 163,000 farms in the US market their foods locally. Of these farms, 70% reported that direct-to-consumer (DTC) was their only sales channel. Small farms (less than $50,000 in gross annual sales) account for 81% of all farms reporting local food sales in 2008. DTC is a crucial marketing channel for these small businesses, traditionally in the form of farmers markets and community supported agriculture (CSA) agreements. Many local food producers have been forced to adapt as both in-person farmers markets and restaurants have been greatly impacted by the COVID-19 pandemic. Market Wagon gives local food producers a new and potentially more efficient channel by offering an online marketplace to sell directly to consumers. 

In addition to the economic benefits for local food producers, local foods have been linked to a variety of other benefits such as enhancing the rural economy, increasing access to healthy and nutritious food, as well as improving the environment. 

Borrowell: Why We Invested

By Ander Iruretagoyena and Priya Parrish

COVID-19 has exacerbated economic inequalities globally and the need for consumers to have healthy credit profiles in order to achieve economic stability and mobility. While some consumers have been able to build stronger balance sheets amidst lessened spending opportunities, that has certainly not been the case for all, especially for those underserved by the financial ecosystem. Many impact investors are aware of the need for financial inclusion strategies in emerging economies, but the size of the under/unbanked in developed economies is also notable. Take Canada, for example, where approximately 9M Canadians (close to 1/3 of adults) have non-prime credit scores (credit scores under 660). Consumers in this cohort face constraints accessing affordable credit, which can put additional pressure on already tight budgets. 53% of Canadians live paycheck-to-paycheck and 27% still don’t have enough money to meet their needs. Outside of predatory lenders, there are few options for this group of financially insecure consumers.

Solution

Borrowell Inc. is a leading Canadian online lending platform designed to offer personal loans and free credit scores. The company's platform utilizes free credit scores and monitoring services to make AI-powered product recommendations, including money management solutions, bill alerts, and predictive cash advances. Users benefit from access to low-interest loans and financial education tools while financial partners benefit from high intent pre-qualified leads. Borrowell aims to be the go-to platform for anyone looking to see their credit reports, gain financial education, and have access to budgeting and capital products aimed at improving financial stability and mobility. This should make a difference for the more than 25% of Canadians who feel overwhelmed by debt.

Why We Invested

Borrowell’s acquisition of Refresh Financial (a fintech company enabling credit rehabilitation through its credit builder loan and secured credit card products) represents a compelling opportunity for the company. With the funding in place to finance this acquisition, Borrowell will be able to expand its product line and build out a multi-product strategy that can produce stronger financial stability for their target customer while increasing their lifetime value. Upon close, the company will immediately realize gains through cross-selling opportunities, improved unit economics related to decreased loan origination costs, and significant synergies. Having a strong first-mover advantage, Borrowell is the clear leader in the large but relatively uncompetitive (when compared to the United States) Canadian financial origination market. The Impact Engine team has conviction in Borrowell’s management team and their systematic and comprehensive plan for integration that includes continued focus on driving measurable improvements to their customer’s financial health.

ImpacT

The combined entity will target the underserved subprime credit population. 53% of Borrowell users have credit scores of less than 659 and the average starting credit score of a Refresh Financial client is 500. However, through engagement with the Borrowell platform, users are able to improve their credit score by a demonstrated 171+ points in 24 months. Borrowell has already demonstrated its ability to establish financial prosperity for its user base through raising the credit scores of its users, lowering their cost of borrowing, making budgeting more manageable, and increasing their savings. This acquisition and round of funding will amplify that impact by enabling the company to serve more non-prime credit seekers and to provide a broader suite of products and services that meet the diverse needs of each user.

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Clinify Health: Why We Invested

By Tasha Seitz and Elizabeth Coston McCluskey

Healthcare represents 18-20% of GDP in the US, and $1 out of every $6 spent on healthcare is through Medicaid programs that serve 75 million individuals in low-income households (almost $600 billion in fiscal 2018). Regulations and the Centers for Medicare and Medicaid Services are shifting the system towards value-based care, and providers will have to adapt or drop out of the system. 

The transition from fee-based to value-based care has not taken place in underserved communities where many patients are covered by Medicaid and Medicare. Value-based contracts still only represent 20-30% of the market, and adoption has come primarily from large physician groups that have the capital to invest in technology, quality experts, and customized interoperable technology platforms. 57% of the market opportunity lies outside of these large provider groups.

Physicians are time-strapped and likely to treat patients for acute symptoms and thus overlook other underlying common chronic conditions and prioritize preventive services at a population health level. Physician practices managing multiple value-based plans can find it challenging to determine which plans prioritize which cost and quality measures for which patient, and when there are more than two recommended measures per patient, compliance drops to 20%. In addition to the challenges of effectively managing patient encounters, the process to get reimbursed under value-based care programs is cumbersome, and it can take up to six months  for providers to be paid for their services.

Solution

Clinify Health supports providers and practices in underserved communities to transition from fee-for-service to value-based care by automatically risk stratifying a practice’s patient population, guiding medical staff as to which patients they should be proactively reaching out to, and providing recommendations to physicians on what actions to take during their patient engagements based on the cost/value of services in addition to clinical utility. Clinify is embedded in clinical workflows through the electronic health record; it pulls clinical data and compares it to value-based contracts to see what services to provide to the patient as part of a complete check-up based on that patient’s needs. In the future, Clinify will enable immediate verification of contract milestones and improve the cash flow cycle for providers serving Medicaid patients.

Why We Invested

Physician practices have been hit hard both emotionally and financially during the COVID19 pandemic, which has had a disproportionate impact on underserved populations. Keeping providers in business and serving their local communities is critical, and Clinify is aimed at supporting these practices to deliver high-quality care, in a cost-effective manner. With the drop in fee-for-service revenues due to the pandemic, there is a near-term opportunity to aid provider groups in shifting to value-based care contracts. Clinify’s recommendations are based on state-by-state guidelines and can give guidance on a contract-by-contract basis across multiple payers, and the company’s business model aligns values and incentives across key stakeholders.

The founding team at Clinify reflects the community the company aims to serve and has deep experience in healthcare, including primary care, value-based care and Medicaid populations. The team also has strong connections to payers, who are interested in accelerating the shift to value-based care but have struggled to get providers on board.

Impact

By enabling physicians serving Medicaid patients to transition to value-based care, we believe that Clinify will improve outcomes for patients while reducing overall healthcare costs and improving the financial viability of physician practices in underserved communities. Access to quality care is an important dimension of health equity, and Clinify will assist physicians in identifying high risk patients and proactively reaching out to those individuals to ensure they are receiving the appropriate care. The company will track quality metrics that are foundational to longitudinal care (for example, BMI and A1C for diabetic and pre-diabetic patients). In the longer term, we expect Clinify to reduce emergency visits, increase post-discharge follow-ups, and lower the overall cost of care. 

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PosiGen: Why We Invested

By Ander Iruretagoyena and Priya Parrish

With 2020 being deemed the worst year for climate change, now more than ever it is important to ensure the businesses which are combating it have enough capital to scale swiftly and efficiently. According to NASA, responding to climate change involves two possible approaches: reducing and stabilizing the levels of heat-trapping greenhouse gases in the atmosphere (“mitigation”) and/or adapting to the climate change already in the pipeline (“adaptation”). Solar panels on residential rooftops contribute towards mitigation by fulfilling the electricity needs of households with 80% lower emissions than fossil fuels. For the average household, this 8,460 pound reduction in C02 is equivalent to 432 gallons of gas (UC Berkeley). Typically, these environmental and financial ($17,000 over the life of a solar system) savings have been reserved for high income households due to the upfront investment required. There are 30+ million low-to-middle income (LMI) households in the U.S., representing 42% of the total potential for residential solar, yet they only represent 30% of installations annually. Serving these communities could create meaningful cumulative reduction in carbon emissions while driving additional benefits of economic empowerment through household savings.

SOLUTION

PosiGen, Inc. (“PosiGen”) is a developer of solar power systems intended to reduce household energy consumption and generate power. The company's solar power systems enable customers to achieve greater fiscal autonomy and energy independence by lowering their utility bills. Currently, PosiGen is the only for-profit residential solar platform that focuses exclusively on providing solar and energy efficiency upgrades to LMI households. Over the past 5 years, PosiGen has installed over 15,000 residential solar energy systems throughout Louisiana, New Jersey and Connecticut.

WHY WE INVESTED

PosiGen has a competitive differentiation with a unique product market fit focused on underserved LMI communities (enabled by a competitive moat of having 8+ years of credit history underwriting LMIs with ~100% collections). The company is well-positioned to capitalize on the $67B residential U.S. solar energy industry growing ~30% annually (driven by rising awareness of climate change, state tax incentives, and utility costs). PosiGen’s approach is fundamentally designed for affordability: standardized kit models, project clustering, and subcontractors decrease installation time/costs while a cost savings only approach to underwriting drives referrals and lowers customer acquisition costs. This allows the company to install solar systems for ~40% less than competitors.

IMPACT

We believe that PosiGen has the ability to make a positive impact on climate change and the environment by mitigating emissions, increasing efficiency, and democratizing energy independence. Management, which includes a founder with 25+ years of entrepreneurial and senior management experience and a CFO with over 20 years in renewable energy, is committed to measuring and continuously reporting impact metrics centered around energy efficiency and economic empowerment of customers served. PosiGen is democratizing access to clean energy and its related benefits by focusing on LMI communities, which account for 73% of their installations to date. In FY ‘20, the company is on track to produce over 70mm KWh of clean energy.

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SupplyShift: Why We Invested

By Tasha Seitz and Chris Wu

Companies are increasingly shifting to responsible sourcing policies. This is due to multi-stakeholder pressures from consumers, investors, NGO’s, and employees, as well as a growing awareness that active management of social and environmental issues in supply chains can decrease risk and create new opportunities.

Deloitte estimates the market for responsible supply chain tools will reach $2.7 billion over the next five years. However, 65% of procurement leaders say they have limited or no visibility beyond their tier 1 (direct) suppliers. Information they do have is often siloed in legacy systems or in unwieldy spreadsheets. Buyers need a system that supports multi-tier networks, provides superior data management and visibility through transparent reporting, benchmarks supplier performance, and facilitates engagement so that suppliers follow-through and act to make business improvements.

Solution

SupplyShift is a supply chain ESG (environmental-social-governance) data management platform enabling customers to trace, assess and manage impacts in their supply chains. It helps buyers efficiently and securely gather and analyze data about supplier performance to any level in their supply chain. SupplyShift’s platform streamlines the process of engaging the supply chain, giving buyers an end-to-end view of supplier sustainability performance. Through its focus on collaboration and shared value, the technology helps buyers and their suppliers make the fundamental shift from simple data management and reporting to active supply chain improvement. It delivers insights that enable buyers to elevate sustainability as a factor of purchasing, risk management, and overall business resilience. The SupplyShift platform makes it seamless to gain the insight needed for a more responsive, responsible, and productive supplier network.

Why We Invested

We believe that SupplyShift’s platform will enable buyers to proactively engage, understand, and improve supplier ESG performance, in turn creating a virtuous cycle that will drive sustainability throughout global supply chains. SupplyShift has demonstrated the ability to sell to large buyers, like Walmart and The Sustainability Consortium. The team also has deep subject matter expertise; the co-founders Alex Gershenson and Jamie Barsimantov both have PhD’s in Environmental Studies and have over 12 years of professional experience in the space as the co-founders of EcoShift, an environmental and sustainability focused consulting company.

Impact

Responsible sourcing plays a key role in ensuring the long-term sustainability of businesses. Global production and use of food and consumer goods accounts for more than 80% of water usage and 67% of tropical forest loss globally, and more than 75% of the greenhouse gas (GHG) emissions associated with many industry sectors come from their supply chains. An EY survey of UN Global Compact participants ranked supply chain practices as the biggest challenge to improving their sustainability performance. In order for companies to address environmental and social issues such as deforestation, human rights, and animal welfare, they must know where their inputs come from and how they are produced. SupplyShift has an opportunity to shift the level of transparency and engagement industry-wide.

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