Nesta Impact Investments, the investment arm of UK social innovation agency Nesta, has unveiled a new €57.9 million (£50 million) investment strategy to support early-stage startups across Europe that are delivering positive social and environmental impact.
Backing impact-driven ventures and under-represented founders is now, finally, becoming seen as a strong investment strategy to generate positive societal, environmental and economic change. Investors, organizations and the entire startup ecosystem itself have opened themselves up over this past year to forward-thinking startups, disrupting the status quo, and led by innovators that have been overlooked for too long.
Now, there’s another investment body getting involved – aiming to support the game-changing thinkers that are shaping tomorrow. Nesta Impact Investments, the VC arm of female-led UK social innovation agency Nesta, has just unveiled a new strategy to support tech businesses delivering on impact.
Lisa Barclay, Executive Director of Nesta Impact Investments: “Nesta Impact Investments has spent over a decade backing brilliant ventures and helping them scale. Through this, we’ve showcased the power impact investing can have. Now, with this new strategy, we’re looking forward to helping another generation of mission-led businesses thrive.”
The details
With this €57.9 million (£50 million) fund, Nesta aims to build upon a decade of impact investments across the UK and expand into Europe’s investment space.
Half of the funding will be directly allocated to writing cheques for early-stage startups over the next five years. The team will be making investments of between £500k and £1 million in Seed-Series A stage startups, with the ability to invest up to £4 million over multiple rounds. They plan to make between five and ten investments per year and, through this, demonstrate the powerful impact that investing can have on people and the planet, as well as the returns this approach can bring to investors.
The remaining capital will go towards growing Mission Studio – a joint venture between Nesta and Founders Factory which focuses on launching new mission-led startups and providing them with the initial investment needed to get off the ground – and enable a range of grant-making initiatives.
Therefore, this new fund announcement goes beyond merely being money to spend – it’s about nurturing an ecosystem of impact-driven ventures and supporting purpose-led businesses to launch.
Lisa Barclay: “We believe that being purpose-led and creating a scalable tech company can go hand-in-hand, as long as the right support is in place. That’s why, as investors, we bring so much more to the table than just capital. Whether it’s tapping into the research expertise of our Nesta colleagues, leveraging our understanding of the policy landscape, or ensuring founders can build the right networks; our team and the wider Nesta organization do everything we can to help founders thrive whilst staying true to their social or environmental goals.”
Nesta Impact: Using tech to change the world for good
Based in the UK, Nesta is an innovation agency for social good. The organization works with three main roles in mind – to act as an innovation partner working with frontline organizations to design and test new solutions, as a venture builder supporting new and early-stage businesses, and as a system shaper creating the conditions for innovation.
The investment wing, Nesta Impact Investments, provides the finances, knowledge and network to promising startups and ventures aiming to leave a positive, lasting impact on the world, focusing in the tech verticals of edtech, foodtech, healthtech, climate tech and the future of work.
Investment plans
Since 2021, Nesta Impact Investments has invested directly in over 30 early-stage companies from two previous funds. Their current portfolio includes digital educational resources platform Bibliu, AI skin cancer tool Skin Analytics, and data and software provider for schools, Arbor. They’ve also seen a range of notable exits, such as FutureGov and BeApplied.
Looking forward, this new investment strategy will reflect the firm’s core mission of making the world a healthier, fairer and more sustainable place by 2030. In line with Nesta’s 2030 goals, Nesta Impact Investments will back startups building high-impact solutions in one of three key areas: those giving every child a fair start, those that help people live healthy lives, and solutions that create a sustainable future where the economy works for both people and the planet.
The first three investments have already been unveiled:
With this fresh investment plan, Nesta has already made initial investments – all the companies have an impact at heart and all are female-led.
The startups are: the tech-enabled childcare platform Koru Kids; Type 2 diabetes reversal programme Habitual Health, and a ‘gastric balloon in a pill’ developed by Oxford Medical Products.
Rachel Carrell, CEO & Founder of Koru Kids: “The childcare sector is in a complete mess. We’re creating a whole new system which is better for parents, childcarers and children. And we are really excited to partner with Nesta to make this vision a reality and offer more children a fairer start.
“Nesta quickly proved that it’s much more than just a name on our cap table – the team has added so much value already; from informal advice whenever we need it, through to securing us speaking slots at key events. We’re really excited to have Lisa and the team on board as we embark on our next phase of growth.”
Alongside the cheques given to these startups, the Nesta portfolio also benefits from a support package which includes the ability to benefit from Nesta’s networks across these key spheres of focus, access their policy and Governmental knowledge, and tap into their broad-ranging research and behavioural insights expertise and the organization’s data skills. This added value is focused on helping portfolio companies scale whilst preserving their social or environmental mission.
