JERUSALEM--(BUSINESS WIRE)--OurCrowd, a global investment platform and Israel’s leading venture investor, has announced it is partnering with Social Finance Israel, the Israeli impact advisory leader, to launch an Impact Fund focused on venture-backed businesses solving some of the world’s greatest challenges. The fund will invest in companies with demonstrated alignment to the UN’s 17 Sustainable Development Goals.
Impact investing is a rapidly growing market in Israel. Though still in its early stages; it doubled from $130M in 2016 to $260M in 2018 and will continue to grow as OurCrowd’s new Impact Fund provides new opportunity for investors.
Further growth appears imminent with $1.6B raised by Israeli companies in “impact related” sectors (sectors aligned to the UN Sustainable Development Goals, e.g. cleantech, health, ag-tech, etc.) across 234 deals in 2018, according to IVC Research Center. However, findings from a jointly-issued OurCrowd/Social Finance Israel report indicate a strong chasm between the standards of practice often required by impact investors and impact-related startups, with just over 10% saying they measure the social or environmental impact the company generate.
As OurCrowd’s impact partner, Social Finance Israel worked with the investment platform to develop a robust impact assessment model, enabling OurCrowd to assess companies according to three dimensions: alignment to the UN Sustainable Development Goals, impact practice and intentionality, and impact risk. Only companies that meet a certain threshold will be considered for investment. All companies will also be evaluated by OurCrowd for their ability to deliver investment return and profit.
According to OurCrowd Founder and CEO Jon Medved, “We believe that it is possible to make money and do good at the same time. That is the best form of impact investing.”
Once companies are selected into the fund, Social Finance Israel and OurCrowd will work with companies to establish appropriate impact KPIs and an impact reporting framework. This accountability follows a recent OurCrowd/Social Finance Israel survey of entrepreneurs, which revealed a wide gap in management and practice: while 84% of entrepreneur respondents indicate their business has a social or environmental impact, only 13% are measuring or tracking their impact. Both firms will also provide guidance on partnerships and business development opportunities that companies can integrate in order to deepen and hone their impact.
The Impact Fund will provide diversified exposure to impact-driven businesses like OurCrowd portfolio companies, provided they meet a set of impact practices and criteria outlined in Social Finance Israel’s deal assessment tool, startups such as:
- UPnRIDE: all-terrain electric wheelchair that enables standing
- JUMP: smart bike-sharing platform (acquired by Uber)
- Zebra Medical Vision: algorithm-based assistance for radiologists
- Edgybees: AR software for rescue drone applications
- CropX: app-oriented sensors for irrigation and fertilization
Social Finance Israel, led by CEO Yaron Neudorfer, is chaired by Sir Ronald Cohen, Co-Founder of the global private equity firm Apax Partners, and “father” of impact investing. “Impact – and more importantly impact measurement – does not impair profit. It actually drives it,” said Sir Ronald. “We are thrilled to see Israel’s largest venture investor and a global player take a leadership approach on impact investing and we encourage others to consider how to use their market power as a force for good.”
“Bringing combined expertise in economics, finance, social sciences, public policy, and philanthropy, Social Finance Israel is the market leader in developing the impact investment market in Israel,” said Social Finance Israel CEO, Yaron Neudorfer. “We see OurCrowd’s decision to establish an impact fund as proof that investors and companies are thinking about the impact they have on people’s lives and the environment. We are proud to support this initiative with the tools and expertise that market players like OurCrowd and others can use to follow through with their intentions.”
“OurCrowd has a long history of making impact driven investments and a wealth of expertise in fund creation,” said OurCrowd Co-Head of Funds, Richard Norman. “Today we are proud to bring these two hallmarks of OurCrowd together and offer investors a dedicated, diversified vehicle of VC-backed businesses striving to tackle some of the world’s greatest challenges. Our partnership with Social Finance Israel enables the fund to take a rigorous approach to impact assessment coupled with a thoughtful post-investment strategy for each company. Add to this the fund’s innovative, impact-linked, incentive structure and we have the makings of a truly unique entity.”
This announcement was made at the 2019 OurCrowd Global Investor Summit in Jerusalem, the largest technology showcase in Israel with over 170 startups and 17,000 registered attendees.
Notes to Editors
OurCrowd is a global investment platform, bringing venture capital opportunities to accredited investors worldwide. A leader in equity crowdfunding, OurCrowd is managed by a team of seasoned investment professionals and is led by serial entrepreneur Jon Medved. OurCrowd vets and selects companies, invests its own capital, and invites its accredited membership of investors and institutional partners to invest alongside in these opportunities. OurCrowd provides support to its portfolio companies, assigns industry experts as mentors, and creates growth opportunities through its network of strategic multinational partnerships. The OurCrowd community consists of almost 30,000 accredited investors from over 170 countries. OurCrowd has raised $1 billion and invested in 170 portfolio companies and funds. To join OurCrowd as an accredited investor visit www.ourcrowd.com and click “Join.”
About Social Finance Israel: Founded in 2013, Social Finance Israel is a not-for-profit that works to deliver measurable social outcomes through the development and deployment of financial and social innovations. It’s flagship product, the Social Impact Bond (or pay-for-success contract) is an innovative financing mechanism that brings in private capital to address social challenges. The firm’s Impact Advisory Practice provides research and insight, impact strategy and measurement tools to an array of clients – fund managers, accelerators, institutional investors, government – looking to make practical strides in the field of impact investing. (http://www.socialfinance.org.il/)
Social Finance Israel is chaired by Sir Ronald Cohen, Cofounder of the global private equity firm Apax Partners, and “father” of impact investing. In 2007 Sir Cohen led a UK-government appointed task force for impact investing setting in motion the development of the field and established Big Society Capital, Social Finance UK, and Bridges Fund Management, luminaries and global shapers of the impact investment approach. (more on Sir Ronald Cohen: https://sirronaldcohen.org/)
Social Finance Israel is part of the Social Finance Global Network comprised of Social Finance UK, US, Israel, Netherlands, and India (http://socialfinance.org/global-network/), the leader in social impact bond development and origination, and co-chairs the Israeli National Advisory Board, a local committee representing Israel at the Global Steering Group for Impact Investing (GSGII). (http://gsgii.org/)
Israeli Impact Investment Ecosystem Update – March 2019: The size of the Israeli impact investment market has more than doubled in just two years, from $130M in 2016 to >$260M at year-end 2018, and set to expand as OurCrowd announces impact fund targeting $30M. 4 impact accelerators are training the next generation of Israeli impact entrepreneurs with the tools needed to build successful impact ventures and numerous programs to strengthen Haredi, Arab, women-led entrepreneurship have also been launched. To date, 4 leading Israeli financial investors, including two leading banks and Israel’s largest pension fund manager (Bank Hapoalim, Bank Leumi, Bank Discount, Psagot Investment House) have made their first impact investments; 5 Israeli charitable foundations have established dedicated impact investment strategies or impact market building mandates. Activity among these players is set to increase as a result of the 2017 Directive by the Pension Funds and Capital Markets Authority to report on responsible investing and impact. 2019 will be the first year the decision is enforced. Among government, a dedicated Societal Challenges Division, part of the publicly-funded Israel Innovation Authority, provides matching grants to tech-based impact ventures, in set fields. As part of its market building mandate, the Edmond de Rothschild Foundation and Jewish Funders Network have partnered to provide $1M matching grant to build the ecosystem and results will be announced later in March 2019; Social Finance Israel, Israel’s leading impact advisory firm, is developing innovative and specialized financing mechanisms. To date it has launched Israel’s 3 social impact bonds. It also develops performance and measurement tools, creating new avenues for private capital to be deployed to the most effective and needed solutions. A dedicated academic Institute for impact investing and social business was established at the College of Management in Rishon LeZion and Israel’s first student-run ESG fund launched this academic year at Bar Ilan University, through a program developed by Social Finance Israel, will see its first allocations.
About the 2019 OurCrowd Global Investor Summit: The OurCrowd Global Investor Summit, Where the startup world gathers. The 2019 OurCrowd Global Investor Summit, taking place March 7 in Jerusalem, Israel, is one of the premier events in the tech industry, and the largest business event in Israel’s history, with 17,000 expected to register to attend. The Summit provides an interactive, front-row seat to the formerly closed world of startup venture capital, with exclusive exposure to cutting-edge technologies, the entrepreneurs behind them, and the corporate leaders deploying them. Top investors, venture capitalists, corporate partners, entrepreneurs and journalists come from around the world both for Summit day as well as a week of events that include tours of the Israeli ecosystem, corporate meetups, and cultural and historical excursions. Thousands more will participate through live streaming. Learn more at summit.ourcrowd.com.
For Press Materials: https://blog.ourcrowd.com/impactfundreport/