Less talk, more action: why invest in impact-driven, early-stage startups?

The war in Europe, the war in the Middle East, an American president on trial for hundreds of criminal and civil offenses, democratic backsliding across the world, record high temperatures and climate change, the widening gap between rich and poor: the world is in crisis, but, as we all well know, we should never let a good crisis go to waste. We can use it as an incredible vehicle for driving inclusive growth and tackling major social challenges.

Impact investing has two major goals: to provide positive, measurable impact on the world, normally on society or the environment, and to make money. It is primarily focused on underrepresented markets, with inequalities and less institutional financial support. Disability inclusion is an example of an impact investing market.

The world has seen some amazing progress in fighting for equality. Movements like feminism, BLM, and LGBTQ+ advocacy have advanced equality and legislative inclusivity. However, there are still large unequal and underserved populations. The disabled community, with 1.3 billion people globally being ‘disabled,’ is the largest of these minority groups on Earth. Yet they have been forgotten, degraded, and left behind by social change.

Every day, they face barriers to accessing education, fitness facilities, employment opportunities, healthcare, and even technology. This provides multiple areas to invest in to drive impact: technology, health services/prevention, corporate wellbeing, schools, and even facilities/infrastructure.

Removing barriers will increase the workforce, increase facilities revenues, open new markets for technology. In short, increasing accessibility will increase financial returns and opportunities for corporations, facilities, and local businesses in both government and private sector, the potential benefits are huge and diverse.

To understand the full impact, we have to understand the full cycle of benefit.

People from the disabled community face employment discrimination, leading to disproportionately high rates of unemployment; they exercise less with fewer accessible facilities and trained staff; they have less disposable income, socialise less, and pay more for public services like healthcare and transportation.

When we invest in inclusive exercise, people from the disabled community become healthier. Healthier people are happier, work harder, earn more money, spend more, have lower medical bills, and socialise more.

They become more competitive on the jobs market, the talent pool grows, leading to decreased unemployment rates among disabled people. Higher employment means more disposable income, more spending in local businesses, and larger amounts paid into public funds to develop the overall welfare.

Additionally, better social interactions for the disabled community reduce mental health issues and increase positive relations with local and wider communities. reduced medical bills lead to less strain on the NHS, and less public funds spent on treatments, so more government budget can be spent elsewhere. Benefiting both on a micro and macro level.

One of the hardest distinctions to make is the boundary between profit and purpose. As a business, we must pursue financial returns while upholding our philanthropic and impact roots. Often, there is an expectation of ‘charity’ with impactful causes, yet investors demand a return. As CEO of an impact organisation helping the disabled community, I find it delicate to balance investor satisfaction and support of those in need. We tackle this with honesty, strategic partnerships, and cost-effective, lean business methods. Straddling the line between commercial and philanthropic organisations often limits traditional institutional funding routes and grants/charitable donations. Additionally, we must try to impact public policy in our area. This pressure and resource limitation make success in this sector challenging, making investing crucial to support social entrepreneurs. Impact investment is essential to demonstrate the viability and focus on a specific segment of change.

As an industry leader, I am increasingly understanding that the political, commercial, and impact criticisms of this sector largely stem from two reasons. Firstly, communication is often not transparent or is ill-designed for the communities served. Secondly, words come first and actions last. Immense numbers of organisations, charities, government departments and people say amazing things about change, but very few of these actually drive action. So, being action-led and showing investors, communities, and the government that you are making a difference, doing the right thing is critical. Less talk, more action.

We have spoken about the benefits of impact investing; it is important to also consider the financial side. According to the Global Impact Investing Network (GIIN), there is $715 billion in AUM (Assets Under Management) in the impact investing space. From 2019 to 2020, investments increased by $200 million, coming from current vehicles increasing spending and new players entering the space.

The global fitness app market is worth over $5 billion and is forecasted to be $26 billion by 2033, with a 20% CAGR (Compound Annual Growth Rate). There are 3 billion smartphone users in the world. The mobile apps consume 65% of the global digital time (51% of which is on fitness/wellness apps). The spending power of families in the UK with at least one disabled person is over £249 billion per annum.

There are billions of dollars not being realised and capitalised on in the disability market. For instance, the fitness app market has seen exits worth hundreds and hundreds of millions and sees 100s of millions in revenues on single platforms.

So, given the above, why does the fitness and wellness space not cater to 20% of the world? Why is such a large, fast-growing market, the largest minority group ignored and forgotten? There was not a single fitness app for the disabled community until 2022.

Success in this market is not a guess or a hope, it’s a simple calculation. We're accessing 1.3 billion underserved people, billions in market worth, and hundreds of millions in revenue in a new market. This is why it is crucial for the impact investment world to grow and commit to those carving out new markets and driving positive social change in innovative ways.

From an ROI perspective, impact investing can be huge. GIIN recent survey highlights that over half of impact investment assets aim to make market-rate returns. This shows that it is possible to achieve financial returns while generating positive social impact. At Accessercise for example we are forecasting 300x ROI.

Impact investing offers other unique growth opportunities and large returns that come with new markets, like owning the data in emerging markets. As society becomes more inclusive, businesses with a focus on accessibility will see increased demand and increased loyalty, two metrics that clearly drive financial profitability. Which is why entering impactful businesses early is a good, almost safe, bet. The world will move forward not backwards.

You often hear people talk about “the mission, not the money.” What we are saying is that impact investment vehicles and the wider market can be both the mission and the money.

Impact investing is so much more than capital for underserved markets during this time of global crisis. It’s about reshaping landscapes and opportunities to foster equitable societies and driving impactful change. By shaping change, we can create a more inclusive and better world. It is a forward-looking vehicle that merges financial interests with social goals and ethical choices.