The Growth Impact Fund developed by Big Issue Invest and UnLtd announced a second close after raising £1.75m from the Macquarie Group Foundation and BD Giving.
UK-based Growth Impact Fund (GIF), a social impact investment fund developed by Big Issue Invest (BIIFM) and UnLtd, has announced it has received £1.5m (€1.73m) ahead of its second close from the Macquarie Group Foundation, which drives social impact work for Macquarie Group. It also received an additional £250,000 (€288,000) from Barking and Dagenham Giving (BD Giving), a community-led impact investment fund based in East London.
The GIF, which is a targeted £25m (€28.8m) evergreen fund, has raised £9.95m (€11.4m) so far, and focuses on investment into early and growth stage social purpose organisations (SPOs) led by underserved entrepreneurs, including black and ethnic-minority led-social enterprises who continue to struggle with access to financing.
The fund, which was launched in December last year, has already made £1m (€1.2m) of investments, most recently allocating £500,000 (€575,000) to two social purpose organisations, chocolate maker Harry Specters and financial support portal Lightning Reach.
The fund’s other investors include Access- The Foundation for Social Investment, Greater Manchester Combined Authority, Big Society Capital, University of Edinburgh, Scope, Trust for London, Joseph Rowntree Foundation, Charities Trust, Barrow Cadbury Trust, English philanthropist Nick Marple, and UnLtd and Big Issue Invest themselves.
Sarah Faber, investment director at BIIFM, commented: “It’s a testament to the design and work behind the fund that we have attracted support from such varied funders from a global organisation like Macquarie to a local community organisation such as Barking and Dagenham Giving. Both funders care about the change we are looking to achieve and are keen to learn from our work.”
Breaking the barriers
The GIF seeks to invest in organisations that have more than 75% representation at board and at least 50% representation at senior leadership level of individuals who either belong to a racialised community including black, Asian or minority ethnic, or are disabled, women, LGBTQIA+, have lived experience of a social challenge or have experience of socio-economic disadvantage.
According to Social Enterprise UK’s State of Social Enterprise 2019 survey, black and ethnic minority-led social enterprises were applying for and receiving finance at just one quarter the level for the rest of the social enterprise sector.
The GIF is working to address the barriers these and other underserved entrepreneurs face.
Speaking to Impact Investor, Trishna Nath, investment portfolio lead at UnLtd, said that in addition to providing successful SPOs with funding, there was a technical assistance fund they could access that provided pre and post investment support.
“The fund has approved grants totalling £204,309 (€234,000) to 18 ventures from when our pre-investment support started to the end of September 2023. The investments have supported founders develop their growth plans, financial modelling, identifying ways to articulate and develop their social impact, develop internal capacity and support founders increase their capacity through engaging with in-house consultants or covering childcare costs,” she said.
SPOs tackling inequality
The GIF, which aims to invest into approximately 50-60 SPOs focused on tackling inequality, has made four investments so far, including into Doing What Really Matters (DWRM), a social enterprise working to provide educational support to the UK’s prison population, neurodivergent talent platform Neuropool, which aims to get more than 10,000 neurodivergent people into employment by 2030, and most recently in chocolate company and social enterprise Harry Specters and financial support portal Lightning Reach.
Launched in 2011, Harry Specters, which has received almost £260,000 from the GIF, is a Cambridgeshire-based social enterprise crafting and selling chocolates. It currently employs 12 neurodiverse individuals and to date, has provided over two hundred autistic people with free training and work experience.
Founded during the COVID-19 pandemic, Lightning Reach is a financial support portal which makes it easier for people to find and apply for a wide range of personalised support, including grants, benefits, help with household bills and other vital resources, in one place. To date, the company has facilitated over £6m in grants to individuals in need of financial assistance and registered over 60,000 users.
Ben Tiplady, investment manager at Big Issue Invest, said: “Since we first spoke to Ren Hooi, the founder and CEO of Lightning Reach, and Mona Shah, founder and CEO of Harry Specters, we quickly identified them as being aligned with our mission of tackling inequality in the UK. The Lightning Reach platform has massive potential to support people experiencing financial hardship, particularly in light of the current cost of living crisis. Harry Specter’s commitment to tackling inequality through empowering neurodivergent individuals to access employment is a powerful and sustainable way to make lasting social change. We are excited to watch both organisations grow.”