The Calvert Foundation in Bethesda, Maryland, has announced an $8 million investment in MyStrongHome, a company that combines specialized climate-resilient construction, insurance, and financing to mitigate risk and increase safety and security for families in vulnerable coastal communities.
The investment will enable the company, which hopes to address the needs of more than 1.6 million homeowners across six coastal states, to serve its first one thousand customers and prove its model. The investment by Calvert incorporates tiered financing that relies on senior and convertible debt as well as a guaranty. The senior debt was structured and arranged by Calvert as part of its new Capital Aggregation business and includes lead participation from MetLife, Pi Investments, and the Libra Foundation. In addition, the John D. and Catherine T. MacArthur Foundation provided a guaranty for the debt that will help de-risk the enterprise. An additional $2 million in convertible debt arranged by Prudential Financial, in partnership with the Greater New Orleans Foundation and others, was closed in tandem with MacArthur's guaranty.
A for-profit benefit corporation, MyStrongHome provides homeowners with the opportunity to safeguard their homes from extreme weather events by capitalizing on the resulting savings in homeowners' insurance premiums. Over the coming months, the company plans to introduce its model to residents of coastal Louisiana, Alabama, and South Carolina.
"MyStrongHome is a unique impact investment opportunity that focuses on climate adaptation and resilience, and is a rare example of business-model innovation in insurance that we are pleased to help introduce into the marketplace," said Calvert Foundation president and CEO Jennifer Pryce. "Today's announcement reflects the determination of all of the parties involved to find the right combination of financing to ensure the launch of this promising business. It's a great example of how financing from financial institutions like Calvert Foundation, MetLife, and Prudential Financial can come together with critical philanthropic leaders like the MacArthur Foundation to support financially viable enterprises that benefit our communities."