IMP Matrix Rating: C4
What: DBL Partners is a venture capital firm that has been pioneering ‘double bottom line’ investing since the mid 2000s, seeding category-defining positive impact companies such as Tesla, SpaceX, The RealReal, Apeel, and Andela. Fund IV targets areas of investment that the team believes fuel disruption, growth, and impact, such as: clean energy and the electrification of everything, conservation and resources optimization, agriculture and food, space/Earth nexus, transportation and mobility, and future of work and human connection.
Who: Stakeholders are not dissimilar to those of impact-positive public companies, such as in our EQ Investment portfolio. They are mainly located in the USA.
How Much Impact: DBL publishes an in-depth annual report with sections for “first bottom line” (i.e. financials), and “second bottom line” (i.e. social and/or environmental impact). They produce in depth impact metrics for each portfolio company, including on elements of our strategy such as gender and climate change mitigation. However, they have not been aggregated to the fund level yet, except for job creation metrics (957 created so far). What is interesting is that DBL signs a side letter with each company to collaboratively work on public policy, environmental stewardship, workforce development, and community engagement.
Our Contribution: We participated into a heavily subscribed single close. DBL signs side letters with all portfolio companies which outlines work to be done on responsible practices of environmental stewardship, labor practices, community engagement and public policy.
Impact Risk: The real impact and why we like this strategy is that DBL has been able to go after businesses that are transformational and are taking big bets on big issues that are not marginal improvements in one process or the other but really go after big ideas where scale itself can have a significant impact even if the per-unit-sold impact of a product or a service is not that significant. Of course, with such strategy the risk is that you end up with controversy on assessing the net impact of such companies: e.g. for Tesla, while an individual Tesla car is probably net-negative with respect to carbon emissions, it is a definite improvement over regular cars, and the push that Tesla has given the auto industry as a whole is incredibly positive for the planet.
Sample Investment: Farmers Business Network, a farmer-to-farmer network and e-commerce platform which aggregates data on seed prices and performances to assist farmers in agronomic resource management, in particular supporting the transition to organic and regenerative agriculture through its Gradable input product line.