Charity Management

Nesta Launches £25m Social Investment Fund

24 October 2012

Nesta, the UK's innovation foundation, has announced the first closing of a new £25m impact investment fund, Nesta Impact Investments.

The new fund brings together experience of early stage venture capital and impact investment to invest in organisations developing innovative solutions to address social challenges facing the UK. It will invest where there is potential for scalable social impact and financial viability.

Investments will be evaluated against Nesta's Standards of Evidence for Impact Investing, launched alongside the fund.

With a target size of £25m, the new fund represents a step change in the investment available for social innovation in the UK. Over £17.5m of commitments have been made for this first closing. Alongside Nesta, the current investors in Nesta Impact Investments are Big Society Capital and Omidyar Network.

The fund will substantially increase the supply of risk capital for social ventures at a time when their innovations are greatly needed. The UK is facing major social and economic challenges with an increase in youth unemployment, an ageing society and an increase in fuel poverty, to name just a few of the hurdles.

The fund will make investments in innovative social ventures that address core social concerns in the areas of the:

• Health and wellbeing of an ageing population

• Educational attainment and employability of children and young people

• Sustainability of communities.

Joe Ludlow, director of Nesta Investment Management said: "Nesta Impact Investments will be investing in higher-risk early stage innovations where we intend to create value for those benefitting from the social innovations we back and for our investors. Nesta has long been at the vanguard of supporting social innovation whether through research, funding programmes or investing in early stage technology."

Matt Bannick, managing partner of Omidyar Network said: "Nesta Impact Investments promises to catalyse a crucial, emerging sector. We believe the focus on tech-enabled, early-stage platforms is part of a winning strategy that will help prime the pump with innovative and scalable solutions to some of society's most pressing challenges."

Nick Hurd, Minister for Civil Society, called the fund a “welcome milestone in the UK's growing social investment market” and said he saw an increased interest from investors and intermediaries. “We are determined to make it easier for charities and social enterprises to access finance so that they can expand their services and develop better solutions to our social problems," he added.

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