Words: Florence Robson
The Conduit is excited to be collaborating with Katapult, a leading investor and scaler of impact-focused start-ups. Katapult and The Conduit share a fundamental belief that by supporting social entrepreneurs to rapidly scale their businesses, and directing global capital towards impact investments, we can solve some of the world’s most pressing issues. The first initiative of this new collaboration is a new Katapult Food Accelerator that will support 3 cohorts of 12 tech entrepreneurs working on the transition to a more sustainable food system.
We caught up with Alison Fort, Impact Partner at Katapult and Board Member at Toniic, to learn more about the current state of the impact investment landscape, Katapult’s approach to scaling start-ups and what she hopes the collaboration with The Conduit will achieve.
Which core trends are shaping the impact investing landscape currently?
The market is growing (GIIN estimate of $500bn+) and mainstream asset managers are moving into the sector. The Larry Fink letter this year was picked up broadly and seen as evidence to the market that climate risk and sustainability factors cannot be ignored. At the same time, we’re not moving quickly enough: this is the ‘decade of action’ on the UN SDGs and, with a gap of $2.5tr pa needed in order to meet the goals, we need to move more capital, fast. There is a sense of urgency amongst those in the impact investing community, and especially in Europe the climate emergency is driving action.
Which sectors receive the most and least impact investment?
At Toniic we gather data on the portfolios of our members (impact investors) that provides insight into which sectors are receiving the most investment. In 2018 we saw that, on aggregate, Sustainable Cities and Communities (SDG 11) received the highest amount of investment, followed by Affordable and Clean Energy (SDG 7). For some SDGs there are fewer impact investing products available, while some don’t lend themselves to all asset classes, such as Peace and Justice (SDG 16).
The Katapult Ocean and the Katapult Food initiatives came about because we know that there is appetite to invest in solving the problems in our oceans and our food systems, but some investors are struggling to find investible solutions. Food is currently attracting a lot of attention as a sector for investment and through Katapult Food we want to direct more investment capital towards impact and changing the broken food system.
What role should big business play in impact investing and helping companies to scale?
I have been in the field for over 10 years and I have seen a positive shift from CSR engagement to meaningful engagement in sustainable policies by big business in recent years. Big business is now operating in a world of increased visibility – a fight for talent amongst a generation that wants purpose and values alignment in their work, and customers and stakeholders making conscious choices of who to buy from and work with.
This background creates great opportunities for impact start-ups and impact funds. At Katapult we have seen positive partnerships and relationships develop between us, our start-ups and large businesses; as investors, as mentors to the start-ups and as pilot or first customers for a new product or service. Big business benefits from access to new innovation and ideas; plus being connected to innovative impact business can help to attract the best talent.
What is the primary role of an accelerator in driving change?
One of Katapult’s key activities is accelerator programmes where we offer a scale-up programme and capital. The accelerator programme enables a deep and intense relationship and understanding between the investor and the start-up. We get to know them and their businesses intimately over a 12-week period. In my view, this is where the magic happens. From an impact investing standpoint, getting in early and working closely with the start-ups means that we have an ability to help them deepen and extend their impact potential. We can coach them so that their impact intentionality is deeply embedded into their plans and businesses, and work with them on examining any potential ethical risks and their mitigation, steering them further onto a positive impact trajectory.
What is Katapult’s approach to helping impact-focused start-ups to scale?
Katapult is investing for-profit and believes that those businesses using technology to solve big problems facing society and the planet will be the winners. The Katapult Accelerators have screened over 10,000 start-ups since the programmes started, using our investment criteria to look at the investment and impact case of each. We screen-in those that are solving big and broad problems, with impact goals aligned to commercial objectives.
Typically, start-ups need access to capital, talent and market. Katapult supports impact start-ups with all three, as well as deepening their knowledge and action on impact and ethics.
Why does Katapult see exponential technology as so vital to social impact?
Technology enables rapid scale and lots of leverage for relatively low cost. The majority of future businesses will be driven by technology. Yet at the same time we’re increasingly aware of the ethical risks associated with our interconnectedness with technology. It’s crucial we support the companies that are using exponential technologies like AI for positive impact. Katapult focuses on finding and working with those businesses that are harnessing technology-for-good; building solutions to our biggest social and environmental problems.
What do you hope to achieve through the partnership between Katapult and The Conduit?
The Conduit and Katapult emerged as impact businesses at a similar time and both believe in the power of community and entrepreneurship for social change. I’m incredibly excited by the potential of bringing the two communities together. Specifically, I’m looking forward to seeing:
- Cross-pollination of knowledge, communities, investors and investable companies for greater sustained impact.
- Katapult bringing insights and expertise on our areas of focus – e.g. food and ag tech, ocean-tech and accelerators – to the Conduit programming team and community.
- Significant value-add to the start-ups in the Katapult Food Accelerator from having access to the Conduit community and programme.
- Conduit members and the expertise of the Conduit programming team being part of the Katapult Future Fest.
You can read more about the collaboration between Katapult and The Conduit here.