London, UK – Nesta Impact Investments, the investment arm of UK social innovation agency Nesta, has announced a new £50m investment strategy to support early-stage technology businesses that deliver strong social and environmental impact. Over the past decade, Nesta Impact Investments has been the most active impact fund in the UK. The new strategy aims to underpin and augment this position as Nesta invests in a new generation of game-changing startups.

Over £25m of the £50m fund has been allocated to invest directly in early-stage startups over the next five years. With this new fund, the team at Nesta Impact Investments will be making investments of between £500k and £1m in Seed-Series A stage startups, with the ability to invest up to £4m over multiple rounds. They plan to make between five and ten investments per year and, through this, demonstrate the power that impact investing can have on people and the planet, as well as the returns this approach can bring to investors.

The remaining capital will help support the continued growth of Mission Studio – a joint venture between Nesta and Founders Factory which focuses on launching new mission-led startups and providing them with initial investment needed to get off the ground – and enable a range of grant-making initiatives.

The new strategy follows over a decade of backing purpose-led businesses across the UK. Since 2012, 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.

Going forward, the refined investment strategy will mirror a new, organisation-wide push by Nesta to make 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.

Nesta Impact Investments has today unveiled the first three investments from this new fund, all of which have female founders. They are: 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.

The Nesta Impact Investments offering goes far beyond writing cheques. They aim to provide their portfolio with a comprehensive package of support. This includes tapping into the deep expertise available across the wider, 200-person strong Nesta organisation, all of whom are working towards making the world a healthier, fairer and more sustainable place by 2030. As a result, portfolio companies are able to benefit from Nesta’s networks across these key spheres of focus, access its policy and governmental knowledge, as well as data skills and broad-ranging research and behavioural insights expertise. This added value is focused on helping portfolio companies scale whilst preserving their social or environmental mission.

In addition, as Nesta Impact Investments’s investment capital is sourced from the organisation’s permanent endowment fund, portfolio exits can be timed to maximise value and impact.

Lisa Barclay, Executive Director of Nesta Impact Investments, comments:

“Nesta Impact Investments has spent over a decade backing brilliant ventures and helping them scale. Through this, we’ve showcased the power that impact investing can have. Now, with this new strategy, we’re looking forward to helping another generation of mission-led businesses thrive.

“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 organisation do everything we can to help founders thrive whilst staying true to their social or environmental goals.”

Rachel Carrell, CEO & Founder of Koru Kids, received one of the first investments from the new fund. She comments:

“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.”

ENDS

Notes to editors

For more information, contact Rhiannon Evans-Young via [email protected] or 07815 325 148

Nesta Impact Investments provides financial, knowledge and network capital to innovative tech ventures that are changing the world for good. We look to back businesses in edtech, foodtech, healthtech, climate tech, the future of work and productivity, that are closely aligned to Nesta’s mission impact goals:

• A sustainable future: To accelerate the decarbonisation of UK households and raise productivity in ways that advance the transition to net zero. Our focus at the moment is on reducing domestic energy consumption via lower-carbon home heating. We are also looking at innovations that support the upskilling needed for a green economy.
• A healthy life: To increase the average number of healthy years lived in the UK, while narrowing health inequalities. Our focus at the moment is on reducing obesity. This includes new food tech, healthy brands and helping people access healthy foods, as well as behavioural and health tech that's relevant. We do not invest in drug development.
• A fairer start: To narrow the education outcome gap between children growing up in disadvantage and the national average. Our main focus at the moment is on early years and closing the school readiness gap. We look for solutions that deliver high-quality, affordable provision and workforce development. We are also looking at financial inclusion solutions which can reduce stress on families who can then better support the home learning environment.

Please note Nesta Impact Investments is not acting in its FCA-Authorised capacity; the new strategy set out above is not regulated business conducted by Nesta Investment Management LLP.

About Nesta

We are Nesta, the UK's innovation agency for social good. We design, test and scale solutions to society's biggest problems. Our three missions are to give every child a fair start, help people live healthy lives and create a sustainable future where the economy works for both people and the planet.

For over 20 years, we have worked to support, encourage and inspire innovation. We work in three roles: as an innovation partner working with frontline organisations 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.

Harnessing the rigour of science and the creativity of design, we work relentlessly to change millions of lives for the better. Find out more at nesta.org.uk