BCN Executive Editors Wesley Brown – June 25, 2021 — Black Billionaire Robert Smith, the former Silicon Valley and Wall Street venture capitalist widely known for covering the debt of the nearly 400 members of the Morehouse graduating class in 2019, is now backing a renewable energy startup’s multimillion dollar plans to bring solar power to underserved communities.
Smith’s Vista Equity Partners, an Austin-based global investment firm with $75 billion in assets, on Wednesday (June 23) announced a new partnership with solar energy startup Clearloop to offset its 2020 corporate carbon footprint and help expand access to clean energy in Jackson, Tenn.
As part of the deal, Vista said it has subscribed to Clearloop’s first 1-million-watt solar project in Jackson to help build 510 new solar panels and power 44 homes in the underserved community. That solar-powered project is located in an industrial area of the Madison County near the Tennessee College of Applied Technology (TCAT), which will be a key component in the creation of a local workforce development program for electricians and other trades in the area.
The renewable energy project, which will guarantee clean power to the community for the next 40 years, is slated to break ground in September 2021 and generate electricity by July 2022. Financial terms of the deal were not disclosed.
“We’re proud to partner with Clearloop to invest in carbon neutrality in ways that improve racial equity,” said Smith, founder, chairman and CEO of Vista Equity Partners. “The COVID-19 pandemic and events of 2020 made clear there are persistent, structural challenges facing African Americans, including in the southeast. All communities simultaneously face the existential risks of climate change. This groundbreaking project will address both issues, deploying solar energy into a particularly disadvantaged African American community and creating local jobs.”
Clearloop CEO & Co-Founder Laura Zapata added that the Nashville, Tenn.-based solar energy firm was “grateful for the visionary leadership of Vista Equity Partners for not only reclaiming their carbon footprint, but also making their climate action investment do more by cleaning up the grid and expanding access to clean energy in American communities otherwise getting left behind.
“This investment recognizes that although access to clean energy is not equitable in our country today, we have a great opportunity to ensure that corporate ESG commitments deliver on the promise of a just transition to a decarbonized economy,” said Zapata.
Along with Zapata and Company COO Bob Storey, Clearloop was launched in October 2019 by ex-Tennessee Gov. Phil Bredesen. The former Democratic governor, who led Tennessee’s executive branch from 2003 to 2011, is also the founder of one of the nation’s largest solar producers in Silicon Ranch, also based in Nashville.
Silicon Ranch was involved in one of the first and largest solar projects in Arkansas in early 2015 when Arkansas Electric Cooperative Corp. and Sacramento, Calif.-based defense contractor Aerojet Rocketdyne brokered a deal to build and manage a 12-megawatt project with zero carbon emissions.
At the time, the 100-acre facility in the Highland Industrial Park in East Camden industrial part was the largest solar farm in Arkansas with over 150,000 solar panels. Under the original agreement, Aerojet Rocketdyne now purchases solar power for the company’s 1,200-acre site it leases in East Camden from Silicon Ranch, the owner and operator of the renewable energy development. Today, the South Arkansas solar plant generates enough electricity to power the equivalent of 2,400 single-family homes and provide clean supplemental daytime power for AECC and Aerojet Rocketdyne, officials said.
Since that time, privately held Silicon Ranch has raised nearly $450 million in six rounds of equity funding. In 2018, Silicon Valley closed on a deal for Shell Oil to acquire a 43.83% stake in the Tennessee solar company, making The Hague, Netherlands-based oil giant the company’s largest shareholder.
In late December 2020, Silicon Ranch officials announced that solar producer had closed on another investment round for $225 million in new equity capital. That round was funded entirely by existing Silicon Ranch shareholders, which included Shell and institutional investors with TD Greystone Infrastructure Fund L.P.
Vista’s viral growth and Arkansas ties
For its part, Vista’s founder and former Goldman Sachs executive Smith became a household name when he made an unplanned announcement during his Morehouse commencement speech just over two years ago. In a story that quickly became viral on social media, the Black billionaire and former Morehouse graduate promised to pay off the debt of the nearly 400 members of his alma mater’s 2019 graduating class through an endowed gift worth $40 million.
Among the more famous Morehouse alumni are civil rights icons Martin Luther King Jr. and Julian Bond, Hollywood actor Samuel L. Jackson and movie director Spike Lee. The private HBCU, founded in 1867, is one of the few remaining traditional men’s liberal arts colleges in America, producing two Rhode Scholars and offering world-class STEM degrees in science, technology, mathematics, and engineering.
Chris Jones, also a Morehouse graduate who announced earlier this month that he would be the first Black Democratic candidate for Arkansas governor (see story here), told Talk Business & Politics at the time that he traveled to Morehouse in May 2019 to participate in a class reunion and commencement ceremony where Smith was the speaker.
“I think initially folks didn’t believe it,” said Jones of Smith’s multimillion dollar gift. “It’s great for the students but look at what it will do for the families and to their kids and to their kids’ kids. There are fathers and mothers who took out mortgages, and now they don’t have that worry. This will resonate for several generations and give these kids the freedom to choose their own paths.”
Almost as stunning as the big gift to the Atlanta HBCU, Jones said, was the fact that most Black Americans are unaware of Smith’s success as founder of Vista, one of the nation’s leading middle market and large-cap private equity firms with offices in Austin, Chicago, New York City, Oakland, and San Francisco.
As noted, Vista has invested $75 billion in more than 70 companies in the software, data and technology space. Since Vista’s founding in 2000, Smith has overseen more than 380 completed transactions by the firm representing over $120 billion in transaction value.
One of Vista’s portfolio firms, Datto Holding Corp. Inc., completed an initial public offering (IPO) of 22 million shares at a price of $27 per share on the New York Stock Exchange in late October. At a closing price of $28.16 on Friday (June 25), Datto now has a market cap of more than $4.5 billion. Vista acquired the Norwalk, Conn.-based cybersecurity firm in 2017.
Like Jones, Smith was trained as an engineer at Cornell University and earned his master’s degree in business administration from Columbia Business School with honors. Following a stint at Kraft General Foods, he joined Goldman Sachs in 1994 in tech investment banking, first in New York and then in Silicon Valley as the firm’s only investment banker solely focusing on tech mergers and acquisitions.
Although the Morehouse gift elevated Smith’s status as a venture capitalist, his philanthropic endeavors have paralleled his rise as a black billionaire with a net worth of $4.5 billion. In 2017, Smith was the only African American to sign on to The Giving Pledge, a commitment by the world’s wealthiest individuals to dedicate most of their wealth to philanthropy. His gift of $20 million was the largest by an individual donor to the National Museum of African American History and Culture, among many other philanthropic activities.
Smith also has other ties to Arkansas that are not well known. Before the former Acxiom Corp. was split in two in September 2018, Smith’s private equity firm held nearly 870,000 shares in the Arkansas company. That stock saw a 25% boost after Acxiom shareholders overwhelmingly approved the sale of the Arkansas tech firm’s legacy data marketing business for $2.3 billion to New York-based Interpublic Group (IPG).
According to federal Securities and Exchange Commission (SEC) filings, Vista’s stake in Acxiom was worth a tidy $43 million before IPG took Acxiom’s legacy data marketing business private, and then separated the remaining company from its Arkansas roots and moved to Silicon Valley as the publicly traded LiveRamp.
As of March 31, 2021, Vista has acquired over 688,000 shares in LiveRamp, now valued at $35.7 million, according to SEC filings. Vista also has substantial equity stakes in tech firms such as Uber, Wix.com, Hubspot, Roku, and Stamps.com.
Vista’s diversity, climate change push
Vista officials said this is the second consecutive year Vista has achieved carbon neutrality and strengthened its commitment to Diversity, Equity, and Inclusion (DE&I) across its ecosystem. The Silicon Valley investment firm said it utilizes a software measurement tool to accurately track its greenhouse gas (GHG) emissions and help identify opportunities for reduction and goal setting.
Last year, Vista partnered with Chyulu Hills REDD+ Project, which helps protect and improve forest quality in the Tsavo-Amboseli ecosystem in southeastern Kenya. The project also partners with local communities to provide long-term sustainable financing to maintain the local landscape’s ecological integrity.
In late March, Vista also announced it has begun accepting applications for the 2022 Vista Frontier Fellows Program. Originally launched in 2019, the program provides undergraduate students from backgrounds that are not usually represented in private equity with full-time, paid internship opportunities to prepare them for a career in finance.
In addition, each student receives a $25,000 scholarship towards student loans or expenses at the end of the program, which takes place before their final year of studies. Frontier Fellows are also encouraged to apply for full-time employment at Vista following their undergraduate studies.
“Early access to education and opportunity is the gateway to talent that represents and embraces the differences of our world,” said Smith. “As we build a more equitable society, attracting and developing young talent from a variety of backgrounds is of critical importance to advance the next generation while also ensuring Vista’s future success and the inclusive culture of excellence we strive for. Our program is designed to offer the hands-on experience and professional development skills needed to thrive in today’s digital economy, and we are thrilled to add to Vista’s pipeline of candidates through the 2022 Frontier Fellows Program.”
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