Lita, the impact crowd funding platform, has launched an asset management company and its first impact fund, raising €25m to date.
Lita, the Paris-based impact crowdfunding platform, has set up Lita Gestion, an asset management company, and launched its first impact fund.
The Article 9 fund, which is targeting an initial closing of €30m at the end of June and has an overall target size of €60m, has already raised €25m. This includes commitments from a range of investors, including asset managers, institutional investors, family offices and angel investors, with one lead investor contributing €20m, according to the firm. Lita said it was unable to name any of the investors at the time of publication.
The fund will make between 15 and 20 investments of €1m to €8m, targeting both small to medium-sized enterprises, as well as scale-ups from Series A and above. It is focusing on three key sectors: energy, industry and new materials; sustainable food and agriculture; and responsible consumption. Around 80% of the fund will be invested into companies in France and the Benelux region with around 15% to 20% invested into opportunities elsewhere in Europe.
Untapped market
Speaking to Impact Investor, Lita cofounder Pierre Schmidtgall – who also takes on the role of managing director of Lita Gestion – said the decision to launch the asset management company in December last year was driven by the desire to increase Lita’s own scale and influence, as well as to allocate to underinvested areas of impact.
“We launched an asset management company and the fund because we wanted to increase our size and strength in the market. We’ve purposely focused on sectors that are untapped and lacking in financing now,” he said.
The fund will be supported by Lita’s existing analytical team and fund managers Maxime Getten and Louise Swistek. Getten has worked as investment director in green and clean tech for Lita for six years, and Swistek joined the company in March last year from social enterprise INCO, where she raised and managed €150m across three impact investment vehicles.
Co-investment opportunity
Schmidtgall explained that his team would source completely new opportunities for the fund and plan to split the fundraising for each investee. Half the amount will come from the fund, and the other half through the platform. He stressed that the platform and the asset management company will operate autonomously and adhere to separate regulations.
“If a company we’ve identified for the fund needs €5m, Lita will write a term sheet for this amount, the fund will take €2.5m and send the opportunity to the crowdfunding platform to collect the remaining €2.5m,” he explained.
If, after a few months, the crowdfunding platform does not raise the amount assigned to it, the fund will be able to step in to raise the full amount. But if the platform succeeds with each investment in raising the same amount as the full fund target size of €60m, this creates an investment opportunity of €120m in total.
“We have the vision to match any investment in the fund through the platform, giving ordinary citizens access to the same investments. This is very important to us,” he said.
Crowdfunding for impact
Lita was initially launched in 2015 by co-founders Eva Sadoun and Julien Benayoun, with Schmidtgall joining as the third co-founder shortly after, to offer retail investors access to a wide range of impact companies and projects for a minimum investment of €100. Investors can choose from a range of asset classes, including venture capital, private equity, private debt, infrastructure and real assets.
“When we first launched there was a gap in the market for financing social and environmental projects. We also set out with the conviction that the future of the economy would require new channels to capture savings from our citizens and enable them to directly invest in the real economy,” said Schmidtgall, who explained that around 70% of investments made on the platform were from first-time impact investors.
“We believe we play a strong role in democratising access to impact investing,” he added.
The platform invests across a broad range of sectors, including tech for good; real estate; culture; the social economy, working in partnership with cooperatives and associations; renewable energy; agriculture and industries; sustainable industries, and something the company calls ‘transformation’, essentially into companies that are actively seeking to reduce their carbon footprint.
Schmidtgall said that the company planned to continue to expand its range of funds to focus on some of these sectors.
“We will also launch funds in specific sectors that are under the radar of investors, such as the care economy, culture and independent media. The third fund we will consider will be in renewable energy,” he added.
