Nesta announces £2m social investment to ‘tackle major challenges’
Friday, January 24th, 2014 By
Nesta, a charity that gives innovative ideas a platform, has announced its first social investments, totalling over £2m. The organisation has also predicted that social investment will continue to grow in 2014.
The investment comes from the £25m Nesta Impact Investments, which is backed by Big Society Capital and Omidyar Network, and invests in organisations tackling key issues. These include elderly care, poor educational standards and financial exclusion. The fund aims to positively impact lives whilst still providing a financial return for investors.
The fund’s first investments went to Oomph!, a social enterprise aiming to improve the lives of older adults; Ffrees Family Finance, a unique current account that aims to help families save; Movellas, an online platform designed to improve literacy skills among teenagers; and Sherston Software, a company developing innovative educational software.
Joel Ludlow, impact investment director at Nesta, said, “Social investment can help tackle major social needs in the UK, and point a way to a better financial services industry that acts in the interest of society.
“The impact investing field is well researched and well supported by policy but we need more examples of deals done to make impact investment come alive for investors and entrepreneurs.”
According to the organisation, the UK social investment market is currently worth over £200m but is set to grow to £1 billion over the next two years. This is partly driven by growing interest and boosted by a new tax relief.
The tax relief aims to encourage investors to consider the social impact of their investments and will apply to investment charities, community interest companies and community benefit companies, with social co-operatives being allowed to register. Over the next five years, Big Society Capital predicts it will unlock nearly half a billion pounds in finance for charities and social enterprises.
A study conducted by ethical bank Triodos found that nearly 3 million investors will consider social investment this year. Just 17% of survey participants said that profits were more important that being ethical.
Big Society Capital’s CEO Nick O’Donohoe, commented, “This is an exciting time for social investment, as we see more opportunities for individuals to invest in these sorts of projects – using their money for both a financial and social return.”
Alex Hook from Nesta previously spoke to Blue & Green Tomorrow about the growing movement and the impact that innovation can have.
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