London-based social impact acceleratorBethnal Green Ventures, which backs pre-seed startups with ideas forusing tech to tackle social and/or environmental problems, has taken 1.3 million in funding from three social tech and innovation funders: Big Society Capital, Nominet Trust and Nesta.
BVG says its intention with the new raise, its third, is to support social impact startups through more of their first steps ideally up to seed stage in the future, not just helping teams accelerate early-stage tech for good ideas.
At this point, BVGhasinvested a total of 1.4 million in 86 startups sincefirst opening for applications back in March 2012. Of those, it says 56 companies are still active, with itsportfolio having collectively raisedmore than 23 million in further funding, and the businesses having an estimated 6.5 million people usingtheir products and services.
The fundscurrent model combines a twice-yearly, 12-week accelerator program in whichchosen startups receive a20,000 investment (in exchange for 6 percent equity), along with mentoring andaccess to co-working space in London.
Last year italso expanded to be able to offera further 50,000 to startups in thecohort. But itsevidently hopingto go a stage further still aiming to create a seedfund to support more companies to the next stage.
It says thefunding its taking nowwill be used to develop the planned later stage impact investment products, as well as for expanding itsoperations and building further partnerships presumably to help it raise the capital for the hoped-for seed fund.
A BVG spokeswoman confirmed it will also have more capacity to do investments up to 50,000 in its cohort startups, usually in the form of a convertible note. She saidthe plan is to do20 accelerator-stage investments this year, plus 10 to 12 follow-on investments.
Commenting on the raise in a statement,BGV CEO Paul Miller, added: Weve proved our accelerator model works, but its not enough on its own. Startups require ongoing support and funding to scale up their operations, this is especially true for startups focused on social impact. Last year we expanded our offer by being able to invest up to 50,000 in great teams after the accelerator stage. This year were planning a fund to be able to back alumni and other tech for good ventures with next stage capital. This will help to plug a notable hole in seed-stage impact investment available to startups in the tech for good space.
BVGs spokeswoman said that when it comes to the social impact funding space, its often the lead investor role thats missing. Angels are great and really plugging a gap but someone needs to set the terms, and we feel we can do that, especially in our role as an impact investor, she told us.
In terms of which tech for good early-stage startups face the biggestfunding gap challenge, she said its a problem across the board, but also noted it can be more of an issue for those withlarge slow moving customers such as local authorities or the U.K.s National health Service or else those with vulnerable users requiring a responsible approach to growth.
The fundsbroad themeswithin its social impact mission remain health, education, sustainability and democracy. But the spokeswoman said its also working with a few partners to target some specific areas.
For example were looking at startups targeting the gig economy and ways to improve prospects for low paid workers. Were also interested in solutions for young people facing multiple disadvantages, she added.
One BVG portfolio company we covered recentlyis Fairphone: a European smartphonestartup thats created a modular phone design aimed at encouraging users to hold onto the same device for longer thereby reducing the environmental impact associated with owning a smartphone.
Another, DrDoctor, is a hospital booking system which BVG says is used by more than 4 million NHS patients in the U.K.
U.S. startupfactory Y Combinator has also, in recent years, placed more of an emphasis on supporting startups aiming to have a wide social and economic impact.
