An impact-driven startup is a company that aims to create not only profit but also social or environmental impact. They capture a large and often underprivileged audience base, so even though it can seem like an area lacking profit, it can become a long-term opportunity.
The most popular sectors for impact-driven business include renewable energy, healthcare, education, financial services, and sustainable consumer goods. However, impact-driven startups are not limited to these particular industries. As long as a company can solve the social issue on a large scale, it is an impact-driven company.
The market size of impact-driven startups
Impact-driven businesses have often been considered as a type of business with low investment return and many believe that they don’t bring enough profit for their shareholders. As a result, it isn’t very easy to get investments.
However, this opinion is not correct and the reality is very different. According to the 2020 Annual Investor Survey, conducted by GIIN, the market size of impact investments is estimated to be at €714 billion!
Moreover, achieving the 17 Sustainable Development Goals (SDGs) outlined in the UN’s 2030 Agenda for Sustainable Development will take between US$5 trillion and $7 trillion annually. This is a massive market opportunity for innovators and investors ready to take on the challenge. Governments, nonprofit organizations, and other actors do not have enough capacity to meet these targets, and this is an excellent opportunity for the private sector to close the gap.
Purpose and profit are mutually beneficial factors that every business can consider.
New generations demanding changes
Nowadays, Millennials are the most potent generation for business in the world. This generation and Generation Z are acting to drive social change. According to the 10th annual Deloitte Global Millennial and Gen Z Survey, Millennials are conscious consumers and employees – the organization’s social mission is critical to them. When it comes to employment, the company’s social mission attracts the best young professionals and becomes a key motivator.
As the world continues to engage in a war for talent and talent gaps continue to grow, companies would be wise to consider how they can attract talent through impact. Becoming a business that makes a positive impact in the world can help bring fresh minds into the fold that will result in improved productivity, outcomes and innovation.
Across Europe, there are many different startups that are prioritizing social impact. Here are five examples that we think can be a positive source of inspiration.
5 Social Impact Startups to Watch in Europe
French startup InnovaFeed unites biotechnologies and purpose to achieve Zero Hunger SDG. They create high-quality nutritional products with a significantly lower carbon footprint and land requirement. Today, more than 33% of global arable land is used to produce feed for livestock production. Replacing plant-based protein with insect protein will enable agricultural land currently used to produce feed crops, to instead be used for growing food for human consumption. We chatted to founder Aude Guo to learn more in 2020. Based in Paris, InnovaFeed has been bringing its disruptive tech to build a circular and zero waste agrifood chain since 2016 and has raised an incredible €195 million.
Berlin-based edtech company Kiron helps refugees access higher education through digital solutions. Since 2015, more than 70,000 students have registered on the Kiron Campus. Based in Berlin, Germany, the firm has taken a pledge to contribute to a ‘world in which everyone has an equal chance to access and succeed in higher education. In order to enable and facilitate access to higher education and successful learning for refugees the company has adopted an innovative academic model and resorts to a specific pedagogical approach. Their educational offer is supported by digital solutions and real-life partners among which several high-profile universities stand out.
Blisser, a Stockholm- and New York-based startup is a digital platform that allows users to connect with premiere talent for climate change, global issues, and charitable causes. Founded in 2020 by Sara Fernstrom at the height of the pandemic, Blisser was created in an effort to create positive change in the world. The result is a platform that marries arts and entertainment with philanthropy. It allows people to purchase personalized video content from their idols, knowing that the profits are being donated directly to a charity of the talent’s choice. Through personal messages that entertain and inspire, global social issues and charities are highlighted with a minimum of 10% of every video message purchase donated to a charity. In October 2021, the company secured €860k to boost its global launch.
Mimbly is a Gothenburg-based startup on a mission to create sustainable water solutions, Mimbly, designs and develops innovative solutions aimed to change unsustainable behaviours, primarily focusing on laundry. Mimbly operates with the awareness that in order to make the most impact, solutions to better the planet need to be made intuitively, be easy and pleasant to use, and represent sustainability as a simple thing to incorporate into everyday life. Our oceans are increasingly polluted by microplastics – a staggering amount enters the oceans from laundry. Mimbly’s Mimbox connects to laundry machines to save water usage, filter out microplastics and save energy consumption. It has now raised about €898k.
Growloop is a Stockholm-based startup that is growing fast and making a difference in the workplace. The digital leadership coaching tool is democratizing access to leadership development and shaping new approaches to workplace training. Founded in 2021, the team secured €1 million at the start of the summer and has onboarded its first clients. The Stockholm-based company developed from edtech company V3VO with the vision to help every human have a balanced and fulfilled work life. It’s an impact-driven endeavour based on the belief that in order to change the world for the better, we all need to unleash the power of the leader within.
