Nesta Social Impact Investments

Overview

Their mission

They want to harness the power of commercial innovation and technology to support Nesta’s missions. Recent years have seen a rise in the number of sustainable and scalable business ventures with the aim of solving major social challenges and improving the lives of millions of people. These ventures need access to the right kind of capital and support to enable them to grow and bring the benefit of innovation to bear on some of the most intractable problems society faces.

Their mission is to invest in high-impact innovations run by outstanding entrepreneurs to make real and lasting social impact in the UK and around the world, including in the US, while generating financial returns.

They are an experienced team of venture capitalists, impact investors, sector experts and evaluators backed by Nesta, the UK’s social innovation agency. Committed to supporting outstanding entrepreneurs, they bring the skills, networks and resources of our team, and the 250-strong team at Nesta, to support ventures to deliver social change. Their expertise and guidance helps portfolio companies to grow their reach, demonstrate their impact and become financially sustainable.

What do they do?

They invest in: edtech, foodtech, healthtech, climate tech, the future of work and productivity.

They invest between £500k and £1m in Seed-to-Series-A tech start-ups that are developing innovations that align with Nesta’s three mission areas. See below.

They look for projects that are closely aligned to Nesta’s Mission impact goals distributing financial and other support through their Nesta Impact Investments and support the creative economy through their Arts and Culture Capital programme which provides loan capital for organisations operating in the creative economy

Investment Programs

Nesta Impact Ventures

Equity investments in early stage ventures creating highly scalable impactful products and services that are usually technology based. They invest typically between £500k and £1 million over multiple investment rounds to a total of £4 million to support innovative and impactful enterprises.

Nesta Impact Investments invests in Seed to Series A companies which help deliver these impact goals:

• Accelerating the decarbonisation of UK household activities and increasing productivity through addressing the skills gap, especially developing green skills.
• Increasing the number of healthy years lived through tackling obesity and loneliness.
• Narrowing the outcome gap between children growing up in disadvantage and the average, with a focus on pre-school years.

Learn more
 

Criteria

Nesta Impact Ventures makes initial investments of between £500k and £1m in Seed or Series A rounds, to support the growth of impact tech ventures which:

• Operate within our sectors of interest
• Have a clear vision to deliver significant positive social change
• Show alignment between business model and impact delivery
• Support inclusive impact, ensuring that either immediately or ultimately the company’s impact will reach people with need irrespective of means
• Demonstrate commitment to impact by incorporating impact related metrics into everyday business decision making
• Have potential to change the lives of tens of thousands of people where impact is deep, or millions where impact is shallow
• Develop products demonstrating early evidence of product market fit
• Are led by experienced management teams
• Have an emerging sustainable business model

Learn more about their funding here >

Arts and Culture Capital

They support arts and cultural organisations that benefit the lives of individuals, communities and society through their work and use their investments to help organisations to become more sustainable and resilient.

Current open funds within this programme:

Arts & Culture Impact Fund

A new £20 million social impact investment fund for socially driven arts, culture and heritage organisations registered and operating in the UK. The fund offers loans between £150,000 and £1 million repayable until May 2032.

• Funding available: £150,000 - £1,000,000
• Loan type: Secured and unsecured
• Repayment period: Until May 2032
• Interest rates: 3% - 8.5%
• Fees:
  • 1% completion fee
  • 2% per annum, pro rata holding fee (when funds are held longer than 3 months)
  • No early repayment fee
• Geographic area covered: UK

The Arts & Culture Impact Fund brings together public, private and charitable funding to provide affordable repayable finance to the UK’s arts, culture and heritage organisations able to demonstrate measurable positive social impact. The funding could be used, among other things, to acquire new assets, improve built infrastructure, develop new ventures or scale up existing revenue streams.

The Arts & Culture Impact Fund sets out to achieve several objectives for the arts, cultural and heritage sectors:

• Provide organisations with appropriate and bespoke repayable finance
• Develop the financial resilience of borrowers
• Support organisations to better monitor, evaluate and communicate their social impact
• Attract additional investment into the sector to help organisations thrive
• Promote the wider positive impact the arts, culture and heritage have on society and support more organisations to benefit individuals and communities through their work.

Criteria

• Your organisation’s core operations or activity should be based in the arts, culture and heritage
• Eligible organisations must work in one of the following disciplines:
  • Architecture
  • Combined arts
  • Crafts
  • Culture and heritage in the natural environment
  • Dance
  • Fashion design & textiles
  • Film
  • Graphic design
  • Heritage
  • Libraries & archives
  • Literature
  • Museums
  • Music
  • Sector support organisation
  • Theatre and performance
  • Visual arts
  • Workspace provider
• They work with organisations registered in the UK and primarily benefiting communities in the UK. Digital organisations will need to demonstrate their primary audiences are based in the UK.
• To be eligible, your organisation has to demonstrate that has a clear social mission. This may include asset-lock and a restriction of the personal gain derived from its work. Charities, community interest companies and community benefit societies with a recognised charitable purpose are eligible for investment. Other incorporated entities, such as companies limited by shares, will be considered based on the strength of their social mission and whether the majority of their profit will be reinvested into that mission.
• When applying, you will need to show how your organisation delivers specific positive outcomes for individuals or communities. The expectation is that a plan will be put in place to evaluate progress towards these outcomes throughout the life of the investment. In general, they expect organisations to have articulated their theory of change either formally or implicitly as well as to have developed (or be in the process of developing) appropriate tools and processes for impact management.

They look for socially driven arts and cultural organisations that can demonstrate they can take on repayable finance

Many factors determine whether they invest in an organisation. Some of the key factors look for are:

• a clear idea of the positive social change created by the organisation
• skilled and experienced leadership and governance
• buy-in at governance level to take on repayable finance
• sound financial and risk management and future-planning
• an evidence-based approach to social impact or willingness to adopt this
• potential for our investment to create a strong positive social impact
• strong business opportunity and evidence of ability to repay investment

Challenge Works

At Challenge Works, a Nesta enterprise, they design and create challenge prizes to help solve the world’s biggest problems, from health, to finance, to climate change – and more. To date they have successfully set 93 challenges and disseminated a total prize pot of over £258.7 million, working with innovators finding radical solutions across the world.

Thery offer financial rewards (alongside expertise, networks and public awareness) to whoever can first or most effectively solve a problem, challenge prizes de-risk the creation of breakthrough innovations.

Visit Current Challenge Prizes open to applications

• Newborn Survival Prize - The idea is to create a prize focused on severely ill neonates being cared for in district level hospitals in lower-and middle-income countries.

• Functional 3D Printed Organ Challenge

   

Learn more

You can read more about Nesta’s work here.