Impact investing can be seen as the process of putting your money to work in such a way that it helps to achieve something positive for society. That can include a growing list of activities including access to education, energy, water or healthcare; affordable housing; renewable energy; and micro-finance.
But there’s a growing appreciation that impact investing isn’t confined to those fields where the social benefit is obvious and direct. It’s also possible to have socially responsible investing in less obvious areas, but where the long term social impact can still be highly beneficial.
As such, impact investing can also be in businesses or projects which provide employment and training, or which disrupt an established sector for the benefit of society as a whole.
Something we specifically focus on with our investment opportunities at GrowthFunders, we’re proud to have been involved with a number of projects and companies that show exactly what impact investing can be today:
1. A residential property development project in County Durham
In 2018, we secured £400,000 of funding for a pioneering development of quality family homes in Chilton, near Bishop Auckland in County Durham. The development, in partnership with leading national procurement organisation and social enterprise Fusion21, includes three CoreHaus homes, built using a modular core that allows homes to be built up to 50% quicker than traditional construction methods and with less construction waste.
The development has created around 50 jobs both directly and within the supply chain and also provided apprenticeship opportunities. Where possible we are proactive in supporting the local supply chain and entered into tender with local suppliers throughout this development.
This project created quality homes in an area where there is demand, improved the area and provided an asset for the local economy. On a national level it also directly addresses the chronic housing shortage, which is causing a range of social problems such as higher rents, which mean less disposable income, in turn having a seriously dampening effect on the economy, affecting everybody. Few investments make such a lasting impact as bricks and mortar.
Another successful GCV fundraising was for cloud-based software-as-a-service business Hive.HR. Hive helps organisations to improve financial performance, increase productivity, attract and retain talented employees, reduce sickness or absenteeism and improve customer satisfaction by improving employee engagement.
Aiming to raise £150,000, they attracted almost double that - £298,000. This has allowed Hive to grow significantly, working with blue chip brands to make their workplaces happier and more productive (and in July 2018, Hive returned to the platform for their next round of investment).
3. Intelligence Fusion
Technology business Intelligence Fusion (IF) is growing exponentially after successfully working with GCV to raise £487,000 to further develop its online global intelligence and risk management platform
IF provides an industry leading platform to help security professionals and global businesses manage risk and security issues by collecting, analysing and disseminating intelligence on a mass scale.
The County Durham-based company, which was set up in 2014, is using the funds it has raised to deepen its technology, utilising artificial intelligence to provide global intelligence at greater speed, breadth, depth and accuracy as part of its plans to become a global intelligence leader in five years.
Partnering with universities over the past few years to build up a network of more than 200 people who have helped to build up the company’s global intelligence picture through incident logging. These incidents are then processed, verified and analysed by experienced intelligence analysts who add the additional context businesses require to protect their people and assets more effectively.
At GCV, we have recently worked with B-North (a start-up which aims to transform the way SME lending is delivered).
Having raised seed capital of over £4m including a six figure investment from the Greater Manchester Combined Authority, B-North has used this to build the core team, develop a prototype lending platform and broker portal whilst also building significant momentum in the banking licence process.
In late 2019, B-North further raised over £2.8 million through the GrowthFunders Co-investment platform, exceeding its initial target of £2 million.
Its seven year target is to have 2,300 SME customers with a total loan book of £2.3bn.
Based in Leeds, the business is led by an experienced and ambitious team with an impressive track record in SME and retail banking. They are committed to building a business focused bank which combines market leading personal service, best in class delivery and exceptional speed of funding. By streamlining the lending process, it will seek to serve business customers in a way which cannot be matched by traditional banks.
Striving to have a transformative impact on businesses by employing thousands of people and boosting the economy, B-North will help to revolutionise and revitalise the entire SME banking sector.