Announcing Nesta Impact Investments

Today we’ve announced the first closing of Nesta Impact Investments, a £25m impact investment fund for social ventures. In the first closing, we’re delighted that Omidyar Network, Big Society Capital and Nesta have committed £17.6m to get things underway.

Nesta Impact Investments brings together Nesta’s impact investing and venture capital expertise to invest in areas that have been at the core of our work for sometime:

  • the health and wellbeing of an ageing population;
  • the educational attainment and employability of children and young people; and
  • the social and environmental sustainability of communities.

Already we’re seeing some exciting innovations with the potential for really significant impact, in fields such as telehealth for older people with long term conditions, adaptive learning technology for school children, or aggregation of demand for electricity to get lower fuel costs for people on low incomes.

And we can already see some patterns in these proposals that illustrate some of the important things about the fund.

The first thing that’s clear is that there are great ventures out there pursuing social impact through their products and services who don’t define themselves by their legal model (private company, charity, social enterprise) but by rather focus on how they deliver value and impact to their users and customers. The fund has some specific social outcomes it is seeking to improve, but we don’t assume any one sector (public, private or social) or any legal structure is particularly better at achieving these.

The second thing we excited about is the role that technology is playing in the innovation that we’re seeing – speeding up services, enabling better access, and creating more sustainable business models. Telehealth solutions help medics to have easier communication with, and monitoring of, older people in the patient’s home, improving their quality of life and reducing the NHS’ costs. Adaptive learning technologies use artificial intelligence to bring the benefits of really high quality personal tutoring at very low cost and so within reach of families on middle and low incomes.

The third thing that’s clear is that our focus on the standard of evidence that an innovation can provide is going to be crucial in helping to direct capital to innovations that really have an impact. Most of the ventures we’re speaking to are at a very early stage – they perhaps only have a prototype product and a theory as to why it will have an effect on one of our target outcomes. We can’t just scale up these innovations. We will be investing in further testing and evaluation to progress the standard of evidence for impact so that we can be certain we’re growing impactful social ventures.

Today, Nesta Impact Investments has crossed the start line – we’re open for business and really excited about meeting and working with some really inspiring entrepreneurs who want to achieve significant impact over the coming eight years of this new fund.

Joe Ludlow, Impact Investment Director

Nesta Impact Investments is managed by Nesta Investment Management, a wholly owned subsidiary of Nesta which is authorised and regulated by the Financial Services Authority.

We have also published today ‘Standards of Evidence for Impact Investing’ describing our approach to the use of evidence in assessing impact performance in Nesta Impact Investments. Download the report.