What would you do without your smartphone these days? We depend on it for so many activities. But not everyone is aware of how their smartphone is produced. Our phones hold a complex story of the hundreds of people who helped make it. Fairphone wants to tell that story, and positively impact the way phones are made, used and recycled. More than a smartphone, the Fairphone is a global campaign for fair materials, good working conditions, long lasting designs and reuse and recycling. What started with only an idea, is now a company that that raised €6.5 million last year.
Bringing a new type of (sustainable) smartphone into a very competitive market is risky. But it’s a risk worth taking. The potential for improvement in the sector is huge. It could inspire or put pressure on other players in the market to change their strategy into a more fair and sustainable one. Fairphone is one of many examples from the portfolio of DOEN Participaties. What started with a small investment now illustrates what impact investing is all about. Because what we look for in new investees is the potential to have a major societal impact with bold, courageous initiatives. Companies that have the potential to inspire consumers to make more sustainable choices. Or to inspire the establishment, to change their strategy into a more sustainable one. DOEN places impact before financial return. We invest in the early stages of a company, starting with amounts of 150.000 euro, and grow with these companies until we are no longer needed. Why? Because this is where impact starts. These start-ups can develop into the scale-ups that many aspiring (impact) investors are looking for. And when joining forces with these investors our investees can deliver huge impact.
The impact investing market is growing. According to a survey from the Global Impact Investing Network (GIIN) the value roughly doubled the past year to $228 billion. More people than ever before are interested in impact investing, according to GIIN CEO, Amit Bouri. That’s a good thing. But will all this funding find its way and really make a change? Will the potentially impactful start-ups benefit from this increase?
DOEN has a long history funding these important startups, such as craft brewery De Prael that offers job opportunities to people recovering from psychological issues. With our support The Prael opened its first brewery in Amsterdam in 2004 and our later investments allowed them to expand to three breweries (and a fourth one to open later this year) where over 200 people are employed. Although starting and scaling such a business remains challenging, the impact on the people employed by the brewery is already enormous. DOEN Participaties is also the first professional investor in Seepje, a startup that produces natural laundry detergents and all-purpose cleaners based on the Himalayan Sapindus mukorossi. Started by 21-year old students Melvin and Jasper who wondered why we use synthetic and oil-based products when a natural alternative is available. Today their products can be bought in over 1400 major supermarkets in the Netherlands and Belgium.
Even with 25 years of experience, we continue to learn about impact investing every day. We continue working on our selection process to find the start-ups with the highest impact potential. And what can we do to ensure that more impact investors join us in supporting small but potentially very impactful companies? The potential is enormous.
Jasper Snoek is financial director at the DOEN Foundation.
Jasper will be leading a session on ‘Building a successful impact investing portfolio’ during the 14th EVPA Annual Conference on 29 and 30 November, in Warsaw, Poland. The event will gather 500+ key players in the social investment and venture philanthropy sector interested to explore new frontiers for impact. Check here the details about the programme, speakers and registration.