Triodos lanches £3m opportunity fund for social enterprise

 

Triodos have launched a £3m UK-wide equity-based venture capital fund for social enterprises – aimed at businesses scaling up.

Triodos investment manager Whitni Thomas, who will be in charge of the Opportunities Fund, said the launch was ‘exciting’ because Triodos was responding to a gap in the market. And while there have been others talking about similar funds she hoped to be the first off the mark with actual investments.

Eventually the fund will be increased to £5-6m and invest between £200,000 and £750,00 in social enterprises ready to scale up. Thomas hopes to have invested the lion’s share of the money over the next couple of years.

Interestingly, Thomas said Triodos was targeting social enterprises as a way to show investors the social return on their money more easily.

‘This is Triodos’ third venture capital fund. We previously have raised two venture capital funds in the Netherlands and from those funds we’ve invested in five UK companies,’ said Thomas

‘However, this is the first fund where the money has been raised in the UK. It’s been raised in the UK for investment in the UK.

‘Also what’s new about it is it’s the first venture capital fund with a focus on social enterprises.

‘Our previous funds of course invested in social, ethical and environmental businesses but this is the first time we’re clearly targeting social enterprises. So they’re social and environmental businesses with that extra plus because they exist for the benefit of certain stakeholders.

‘One of the things we’re looking at is how we can report back to investors on the social impact of their investments and we felt one of the ways to start was to invest in entities that are in existence for the benefit of certain stakeholders.’

Thomas said the fund life could be up to 10 years as Triodos was looking for ‘long term relationships’.

‘We’re looking over the next two years at really finding the social enterprise then working with them for three to four years and then looking at ways of finding an exit strategy so our investors can get their money back as well as having received a social return.’

Thomas said the fund was not a panacea that would help all social enterprises scale up or be the solution for finance in the sector but it was a good step in the right direction.

‘We’ve done capital raising for share issues with Cafédirect and others but we kept seeing time and time again social enterprises coming to us asking for this type of risk finance,’ Thomas said.

Find out more

www.triodos.co.uk