Chi Impact Capital

About

Chi’s Burning Issues Impact Fund, or BIIF, invests with a gender lens and a multi-species lens encompassing climate action, responsible consumption and other Sustainable Development Goals (SDGs). In Chi’s strategy, gender and climate impacts cross-fertilise each other.

Gender: Chi Impact Capital applies an explicit gender lens across all of its investments and defines its gender lens in an internal strategy and value creation document. It views gender equality as integral to companies’ operations and interactions with stakeholders. In that regard Chi Impact Capital’s mission is not to invest in women-led teams only but to assist companies to become more conscious and gender balanced over time. Beyond assisting its investee companies to installing more gender-balanced teams, boards and leadership, it seeks to invest in companies with job opportunities for women, and whose products or services can help women in their everyday lives.

Type of actor

Impact investment advisory firm

Investment type

Direct investment in mid-to-late ventures with existing revenue for a Luxembourg based impact VC fund (the ‘Burning Issues Impact Fund’, ‘BIIF’). The typical ticket size ranges from €500,000 to €1 million.

Operates in

Europe

Sectors

Innovative technologies, food, conscious commerce, green innovation, smart cities, care and affordable healthcare

Climate: Chi Impact Capital invests in companies that aim to solve burning environmental and social issues. Portfolio companies have their impact element ingrained in their DNA (product or service) and must have the potential to transform the sector/s they are operating in.

Chi also applies a ‘multi-species lens’ across all of its investments to encompass biodiversity and all life on earth. This means analysing food chains, living conditions, animal rights, and climate justice to produce a broader and deeper understanding of how a portfolio company uses resources and contributes to a healthy planet.

For example, Chi Impact Capital nudges the portfolio companies of the BIIF to be conscious of its impacts throughout its value chain (i.e., assisting them to become more transparent, local and innovative along their value chains).

In addition, Chi believes that these impact benefits can be achieved without financial concessions, and that the pursuit of impact enhances economic profitability.

While founder Dr Christin ter Braak-Forstinger believes investing in developing markets is critical, Chi focuses on developed markets to address issues “in front of our doorsteps” in order to achieve the SDGs by 2030. It harnesses a strong regional network to invest in Europe.

Approach

Chi seeks out companies that intentionally and intrinsically create positive social and/or environmental impact as part of their business model, products and/ or services, and where additional investment would generate additional deep impact. In particular, it looks for companies whose products and services aid women in their daily lives.

Chi uses gender as a positive screening factor and includes gender and climate-specific due diligence questions. It works with companies to define and measure key performance indicators to determine companies’ impact on the SDGs. To date, Chi has made four investments with one follow-on investment.

Its portfolio companies are for-profit, Europe-based enterprises that provide transformative, scalable and typically tech-heavy solutions across the following verticals: circular economy, energy efficiency and green innovation, food safety and security, smart mobility and transport, and affordable and climate-resilient healthcare.

Impact

To date, Chi has invested in the following types of companies:

• A cultured meat company (meat made from stem cells) that seeks to transform food systems by eliminating emissions from livestock and addressing animal welfare challenges.

• A company enabling reusable packaging for takeaway and delivery food and directly responding to eliminate single-use plastics.

• A company scaling vertical, circular farming to transform food systems by producing high quality locally grown produce and with fewer resources than traditional agriculture.

• A company advancing the decentralized and digital green energy-transition.

“Chi focuses on developed markets to address issues “in front of our doorsteps” in order to achieve the SDGs by 2030.”

In applying a gender lens across all of its portfolio companies, Chi provides technical support to help portfolio companies’ teams and boards become more genderbalanced and inclusive, with an eye to increasing job opportunities for women, improving incentive structures, and having a positive impact on women’s lives.

Key takeaways

Chi’s key insights can help other funds in the space:

1. Minority investors can have an influential role in a portfolio company’s impact. Because the companies Chi – via the BIIF – invests in already have impact ingrained in their business models, they are very open-minded in advancing their positions as pioneers and are willing to work towards developing gender and climate impact indicators.

2. Even in developed markets like Europe, it is still challenging to discuss gender impact integration with purely male-driven teams. Gender is not as easy to discuss as climate and takes more convincing arguments. Case studies of companies with both gender and climate impact will demonstrate to other investors that these kinds of projects exist and are valuable.