The ‘Innovative Funds for our Future’ challenge recognises funds investing in early-stage businesses generating impact across eight SDG areas
UpLink, the open innovation platform of the World Economic Forum (WEF), has announced the winners of the ‘Innovative Funds for our Future’ challenge.
Launched this year, the challenge seeks to recognise innovative investment funds delivering market-rate returns while investing in people and planet-focused entrepreneurs across the sustainable development goals (SDG) areas of restoration and conservation of nature, oceans, plastics, climate action, circular economy, water, health and education.
A total of 70 submissions were made by both global and regional funds, with entries from across the globe. Seventeen winners were chosen by a panel composed of entrepreneurs, philanthropists, capital providers, fund-of-funds managers and other investment experts.
Among the winners were UK-based Sentient Ventures, whose fund aims to accelerate the removal of farmed animals from food systems, France-based SWEN Capital Partners’ Blue Ocean Fund, which invests in innovations that help regenerate ocean health, and Switzerland-based Chi Impact Capital’s Burning Issues Impact Fund, which invests across a range of regenerative companies from circular economy and conscious commerce to affordable healthcare.
Commenting on their win, Enrique Alvarado Hablutzel, co-founder of Chi Impact Capital and advisor to the Burning Issues Impact Fund, said: “We are delighted to be selected as one of the top Innovative Funds for our Future. More than ever, we need to develop alliances with other impact investors to support our investments, the theory of change of our funds, and the achievement of the SDGs.”
UpLink, which was launched at Davos 2020 with a focus on the development of challenges and digital communities in support of the UN SDGs, invites the winners of its challenges to join the UpLink Innovation Network, which offers them opportunities to help scale and accelerate the impact of their ventures.
To enter the challenge, funds had to meet a wide range of criteria, including the ability to demonstrate an innovative approach to financing and scaling SDG-focused entrepreneurs and ventures, a track record of delivering market-rate returns to investors, a clearly defined investment strategy which matched the needs of the entrepreneurs in the fund’s sector or region, a willingness to co-invest and an openness to the syndication of investment opportunities.
Fund managers also had to provide evidence of a values-based approach to their operations, investment thesis, due diligence and term sheets. Only funds with total assets under management of between $5m to $250m (€5m to €250m) were considered for selection.
According to figures quoted from the Global Impact Investment Network (GIIN)’s 2020 impact survey, despite the SDG investing market more than tripling in recent years to over $715bn (€738bn), this represents just a fraction of the more than $100 trn ($103trn) of the world’s total assets under management. At the same time, WEF says that only 50% of the technology needed to achieve net zero, and likely other key sustainable development goals, is currently ready for deployment.
The challenge aims to provide support for the most innovative SDG-focused funds in order to accelerate investment into the technologies and solutions needed to transition the global economy to net zero, as well as to achieve the other 2030 SDGs.
Speaking to Impact Investor, John Dutton, head of UpLink and member of the WEF’s executive committee, said the decision to launch the challenge was largely driven by the recognition of the difficulties faced by impact-focused venture capital funds in garnering visibility and raising capital.
“After a couple of years of doing this, we realised that many emerging funds faced the same challenges that a start-up would face, particularly in terms of raising investment capital. This also comes back to our mission of unlocking an entrepreneur revolution to drive systemic change for people and planet, and these funds play a critical role in that,” Dutton said.
As part of the UpLink Innovation Network, the winning investment funds will be offered opportunities to connect with capital providers, fund-of-fund managers and investment experts.
They will also be given access to investment opportunities from UpLink’s ‘Top Innovators’ community of high-impact entrepreneurs, co-investment opportunities with fellow winning funds, and a space to share investment frameworks and knowledge with other fund managers.
Dutton added: “A measure of success for this challenge would be to help these funds complete their funding rounds, consider investment in the community of entrepreneurs that have come up through the UpLink ecosystem and gain greater visibility through the Forum’s and UpLink’s digital channels. We also hope that the funds will, in turn, influence some of the Forum’s community of private investors and members from family offices who are considering how to allocate capital.”
Dutton said that UpLink was considering relaunching the challenge again in the future and extending it beyond venture capital funds to include philanthropic funds willing to provide grants to very early-stage ventures, corporate venture fund, as well as public-private funds willing to invest in debt. “As the saying goes, it takes a village and we want to widen our net to support a broader range of funds that are funding solutions to these global challenges, in a way we haven’t done so far.”