Ascension Investments Addressing Social Inequalities Outperform Rest of Portfolio
The Origin Story Behind Ascension Fund III
From 2015 to 2021, Ascension has invested in over 150 early-stage tech businesses in sectors such as FinTech, Next Generation Media, eCommerce, Digital Health, Sustainability and New Work.
We began investing through our (S)EIS funds and quickly became very active in the investment space, backing pre-seed businesses such as Vidsy, WeGift, and Lick. Last week, Ascension was recognised by the UK’s tech data bible Beauhurst as London’s most active VC over the past decade. 😎
Fair By Design Fund
We raised our first institutional fund — Fair By Design — in 2018, with the focus on alleviating the Poverty Premium (the extra cost of being poor). According to seminal research from Bristol University, the average extra cost for low-income households equates to up to £500 per year and can total up to £1,190 for some households.
The fund’s mission is to back founders leveraging technology to solve these massive market failures — charging those in our society (£3.8bn/year) that can least afford it more for the same essential goods and services as those that can afford it — by launching new innovations and reimagining business models.
This is by far the most interesting project of my career, which started in the early 1990s as an economist in New York working for a non-profit think tank advising former Soviet bloc governments on their transition to a more civil society.
Fair By Design is also part of a wider movement with many partners, including a campaign hosted by Barrow Cadbury which attacks the poverty premium through advocacy and influence rather than investment (which is our angle). The synergy between the two arms is very clear: the campaign uses examples from our portfolio to prove to key audiences (Corporates, Local Councils, Social Housing, Regulators) that solutions fixing these market failures are real and capable of scaling. 🧗♀️
Ascension, in turn, connects our portfolio with these key stakeholders which is also an important route to reaching mass market adoption. The Fair By Design movement’s goal is to eradicate the Poverty Premium by 2028 — this objective has been made more difficult by a string of deep economic shocks.
LPs in the Fair By Design Fund are numerous, diverse, and include Big Society Capital, the Joseph Rowntree Foundation, Places for People, and Nationwide. Since 2018, the Fund has backed 22 business and is almost fully deployed (current TVPI is 2.18x), with our first exit announced through Apple’s acquisition of Credit Kudos. 🍎
Most interestingly, our recent impact report estimated the total Poverty Premium reduction (household savings) from our portfolio (since launch) to be £192m, which equates to £103 per person. Businesses which have had a great impact on these savings include some of the fund’s earliest investments: Wagestream, Switchee and Credit Kudos. Given the seed nature of our fund, we expect this impact to dramatically decrease household costs as our portfolio grows (both in number and stage).
Emma Steele, Ascension Partner and the driving force of our Fair By Design Fund, is writing a blog with more on our latest impact report — watch this space. 👀
Enter Ascension Fund III
To build on our track record of early-stage investing and the momentum around Fair By Design, we are now raising a £50m fund — Ascension Fund III. This is the culmination of our work to date across our annual (S)EIS Funds (what we group together as Ascension Fund I) and the Fair By Design Fund (Ascension Fund II).
Ascension Fund III will leverage our brand and know-how to back ventures with mass market potential that improve how people live and work. The target portfolio will largely share the following characteristics, whether a B2C, B2B, or B2B2C business:
⭐️ Scalable tech enabled business models across New Work (income generation), Financial Inclusion (poverty premium), and Access to Better Health (beyond the NHS)
⭐ Reducing social inequalities that are affordable, accessible, relevant to the mass market (i.e. 40% of the UK population living paycheck to paycheck), with clear routes to reach our target audience
⭐ Amazing mission-led founder(s) 🎯
⭐ Ideally Pre-Seed (Seed OK)
⭐ Keen for Ascension to become a shareholder (target 10% initial stake)
Ascension’s Investments Reducing Social Inequalities vs. Rest of Portfolio 🤓
Here is the really fascinating point for us and the purpose of this piece. In order to hone our thesis (and create evidence-based data for potential LPs), we recently analysed our portfolio, and in particular the difference between companies which fit the ‘Fund III’ thesis and those which do not.️
Below is a list of all 155 investments from Ascension managed funds (2015–2021 calendar year), divided into Fund 3 Thesis (‘F3T’) & Non-F3T categories (data as of February 28th, 2022).
The conclusion is clear: our portfolio which fits into the Ascension Fund III thesis of improving how people live and work is outperforming the rest of the portfolio (1.96x vs. 1.91x). 🎉 🎉
👉 Click here for an overview of our whole portfolio, tagged as F3T or Non F3T (excludes the 12 failed investments 💥).
And we’re just getting started️️ 🏋️♀️
Our new £50m Ascension Fund III offers investors both outsized returns (versus non-impact funds) and also a conduit to improving the lives of half our society which is just getting by.
Please contact me should you wish to learn more about Ascension Fund III, or our Fair By Design EIS fund, which are both open for investment. 📧
We are excited to uncover more amazing businesses helping to improve the nature of society for the better.
Jean de Fougerolles, Managing Partner — jean@ascension.vc
