Jul 7, 2022
The Ananda Impact Ventures Manifesto
How we think, what we believe and how we want to make a difference
Ananda is a pioneer of impact investing, dedicated to enabling a new wave of European entrepreneurs — both first-time and experienced — to build stuff that truly matters.
As former entrepreneurs ourselves, we believe that impact companies offer the greatest value creation opportunities over the next few decades.
And by “value”, we don’t just mean economic value — we mean societal value as well.
We believe that Europe is home to world-class entrepreneurial talent capable of solving the big challenges we face today — from combatting climate change to revolutionising healthcare and education.
However, we also believe that Europe is underserved in capital allocation at the all-important seed to series A investment stage.
This is why Ananda exists, to accelerate and support impact entrepreneurs when they need it most.
In combination with our entrepreneurial and investor network, Ananda is the perfect partner to help game-changing companies deliver impact at scale.
The impact opportunity
Our society and the global economy have reached a decisive moment in time. We face unprecedented challenges — but also have a huge opportunity to address these challenges in ways that make the world more connected.
Issues that were once other people’s problems now affect everyone and feel more pressing than ever. The uncertain geopolitical environment, and in particular the global pandemic, has led to a reevaluation of the way we live and work, and what really matters to us has become clearer:
- Reducing the negative effects of climate change and globalisation
- Improving our exhausted healthcare systems
- Providing access to quality education
- Fostering an equitable humanity
These challenges will not diminish in time, but become ever more ubiquitous. Yet so too will the demand for sustainable solutions to these issues. This sets the stage for a new generation of impact companies to thrive.
There are strong demographic, societal and financial trends creating trillion-euro market opportunities for impact-focused companies and investors:
- Consumer behaviour is shifting towards more sustainable choices. Over 90% of consumers are likely to switch to brands that align with their values and have sustainability at their core.
- Governments are increasingly aware of the economic and societal challenges we face and have developed both incentives and regulation that create a supportive infrastructure for impact businesses.
- Many universities have created programs around impact entrepreneurship and impact investing, educating students and professionals in how to become catalysts for change.
- Major European institutions are increasingly directing capital streams towards impact entrepreneurship and impact investing.
- Great private fortunes are being directed in a more meaningful way by the next generation of wealthy families and individuals searching for suitable investment opportunities.
In short, the importance of positive societal and ecological impact is taking centre stage across society, creating numerous opportunities within a fast emerging ecosystem.
What makes a great impact company?
Successful impact companies see great opportunities in societal challenges and address them intentionally with interdependent business models that aim for both scalable impact and financial growth.
Yet creating outstanding businesses for impact is not easy. Over the past decade, we’ve learned the one thing that makes or breaks a company are the dynamics of the founders and their team. It has always been our highest priority to work with people that are fully aligned with their great vision.
To us, there is nothing stronger than a founder’s unshakeable intention to address a major problem and persist in working towards their goal until it is solved.
Purpose is at the core of the impact businesses we invest in. They address major societal challenges with innovative technological solutions and act as signposts and role models towards a more sustainable future.
With impact baked into the core of our target companies’ business models, there is no trade-off between revenue and impact. The formula is simple: more revenue equals more impact. It’s in the DNA of any outstanding impact business.
Why do companies work with Ananda?
Our target companies tackle the following four themes:
Unlike traditional VC funds, our approach is to proactively search and select the most outstanding impact businesses tackling major issues.
Impact companies choose us because of the deep sector knowledge and relevant networks we have built. We actively create synergies within our portfolio of companies, encouraging them to cross-fertilise with each other and helping them to excel.
Ananda is also particularly attractive to start-ups because most of us have been entrepreneurs. We understand the challenges our portfolio companies face day-by-day. If things get tough, we know what it’s like to be in the trenches.
And as active investors and reliable board members, our portfolio companies appreciate our strong alignment with their mission and our commitment to help them fulfil it. We bring a different perspective to our companies, complementing the perspective of traditional VC funds.
We believe that technology has a tremendously important role to play in driving meaningful societal change at scale — but it cannot solve everything. That’s why we also back hybrid business models that rely on both technology and people, as well as companies offering novel technologies and services in areas that have yet to be sufficiently digitized.
Here is just a small sample of the companies we have invested in, giving a flavour of the breadth and depth of impact across our portfolio:
Ieso Digital Health is the UK’s leading provider of clinically validated and digitally-enabled mental healthcare, and is redefining its delivery by making high-quality cognitive behavioural therapy (CBT) accessible, accountable and affordable for the first time. The company recently announced that it is the first provider in the world to augment one-to-one therapy in real-time with advanced analytics, machine learning, and natural language processing technologies.
NatureMetrics is leading a revolution in biodiversity data. The company develops DNA-based techniques for surveying and monitoring biodiversity. Taking a big data approach, NatureMetrics enables companies across multiple industries to make better decisions that will encourage and equip the whole world to become nature positive.
OroraTech’s mission is to protect people and the planet by detecting wildfires. The company monitors wildfires on a global scale using thermal-infrared satellite imagery from its own constellation plus third-party sources. OroraTech’s custom wildfire detection algorithms enable the prevention and containment of severe fires, resulting in significant CO2 savings, protection of biodiversity and reduction of human tragedies.
The Ananda difference
Our culture and ethos sets us apart from traditional VCs.
First and foremost, we are absolutely committed to ensuring our portfolio companies delivering the greatest possible impact.
Ananda strongly believes that impact investing isn’t worthy of the name unless it is properly measured. As such, we bring more than a decade of impact measurement expertise to the equation, helping companies to set up impact KPIs and targets that are business-driven.
We also demonstrate our own commitment to achieving impact by directly linking our carried interest to both our companies’ financial performance and quantifiable impact achievements. This mechanism avoids conflicts of interest between mission-based impact and financial performance because our return is tied to both.
For us, people are at the core of our business, and we believe in strengthening them in every possible way. This includes having an empathetic, eye level relationship with founders and a strong focus on good mental health throughout the company, which is crucial if the business is to succeed. We provide the best possible support in this area, including founder coaching as well as proactive identification of potential HR challenges and development opportunities.
In addition, we have set new standards with our unique Impact Term Sheet, which keeps our portfolio companies focused on their mission and pushes them to become category leaders in both sustainability and diversity.
That’s because we believe that uniqueness and resilience comes from diversity. To achieve their goals and truly make a difference, it’s vital that portfolio companies create extraordinary teams by attracting people from all backgrounds.
One of the core pillars of Ananda since its foundation has been the promotion of Diversity, Equity and Inclusion (DEI) within the VC and start-up ecosystem. Almost half of our portfolio companies have diverse founding teams, and as a consequence we are a certified Level 2 firm under the Diversity VC Standard. We hope this will inspire other players in the ecosystem to prioritise their own DEI agendas.
Ultimately, we are life-long learners who strive every day to become better at what we do, so like to keep our minds wide open. We learn from our mistakes and share this learning so that others can thrive. A little reciprocity goes a long way for a healthy ecosystem.
Helping shape the future of venture capital
A fundamental reshaping of finance is taking place, with impact investment funds at the forefront of this change.
Twelve years into our journey as impact investors, we understand we are just one small part of an ecosystem for positive change — but our active participation within it has helped to create a vibrant impact investing scene.
While there is still much more work to be done, we are incredibly proud of what we’ve achieved to date in forging this new future of venture capital and reshaping the way that the world looks at finance.
