In the lead up to the annual education tradeshow BETT, we take a look at the key things we'll be looking for as an impact investor
In preparation for the annual education tradeshow BETT 2018, we're sharing a short series of education blogs. In this blog, we take a look at how an impact investor spots new investment opportunities.
Another year, another January spent limbering up for the four-day marathon that is BETT. All my standard prep is in place: comfy shoes are at the ready, step-counter is packed, and plans to meet people at opposite ends of the arena are laid. But years of practice has taught me the most important thing of all is to get clear on what I am looking for. The event can be so overwhelming, such a sensory overload, that it’s easy to lose sight of your well-considered criteria within minutes of picking up your programme and having someone pitch how the latest drone powered by artificial intelligence will propel schools into the 24th century.
As an impact investor looking to grow our portfolio in the education space, my primary reason for going to BETT is to meet companies that we might one day invest in. We typically invest in early-stage technology businesses (you can see our portfolio here), so I’ll take a shortcut to the BETT Futures area, which is all about edtech startups (including Nesta’s very own Rocket Fund, which helps schools access technology by connecting them with their community). Of course, networking, finding out who’s launching what, and checking out who has the biggest stand are important pursuits too, but ultimately looking for new, potential investee companies is the aim of the game for me.
So to help me stay focused and make it more likely that I will spot some great opportunities, I’ve made a list of the top things I’ll be looking for:
1. Making the world a better place - every company is trying to solve a problem, but not all problems are created equal and we’re looking to find startups that are tackling problems that link to some of the biggest challenges society is facing: school readiness in the early years; numeracy and literacy attainment; the school to work transition; preparedness for future skills; and the upskilling and re-skilling of adult learners. Our focus on these areas generally means we’re more likely to invest in businesses with B2B models rather than B2C, as they are more likely to be able to reach all end users and for those users not to be limited by affordability. Ultimately, we see long-term value creation as being linked to meeting the greatest needs.
2. Getting paid for doing good - whilst there are some real success stories of businesses adopting the ‘Robin Hood’ model of ‘doing well’ with one hand and ‘doing good’ with the other, I’ll be looking for businesses whose sales are directly linked to the product doing a good job. This isn’t just about ‘increased sales equalling increased impact’, as it’s more complicated than that, but alignment between the two certainly helps keep impact at the front and centre and reduces the risk of a trade-off between the two. You can read more about our approach maximising social impact through our investments here.
3. Dreaming big - going global means having the potential to scale across countries, education systems, curriculums, and so on. This, along with a host of other reasons, means our default preference is for platform-based businesses rather than content ones, so I’ll be keeping an eye out for them. And as for which sectors, having seen a lot of startups emerge in the school/K-12 sector of late, I’ll be interested in seeing what’s new in the further education, higher education and adult learning spaces.
4. Putting teachers before technology - the best edtech companies we’ve come across have a genuine understanding of how teachers, schools and other education settings engage with technology. Not just an anecdote here and 'friend who is a teacher' there, but a deep and extensive knowledge based on real-life experience that captures the heterogeneity of how technology is used both inside and out of the classroom. Having this enables companies to design the best products that meet the needs of their customers and users and bridges what can sometimes feel like a big gap between the technology and education communities.
With this in mind, I’m ready and raring to go and looking forward to meeting lots of you at BETT 2018.