Fund seeks to shift Israel from startup nation to impact nation

Cecile Blilious, the co-founder and managing partner of Impact First Investments, has a vision. She wants to leverage Israel’s track record as a technology hotbed and put it to work for social and environmental causes globally. In other words, she wants to take Startup Nation and transform it into Impact Nation.

“We can take Israel’s proven success in the creation of startups and innovation and entrepreneurship, and its proven track record of R&D development and entrepreneurship, and take that into the social world,” she said. Israel should look at global challenges in healthcare, education, poverty and environment and “create technology solutions that can be used globally with Israeli technology,” she said.

Impact investing is a growing trend globally. These are investors who sink money into companies, organizations, and funds for the sake of social and environmental impact alongside financial return. The concept flies in the face of the view that social and environmental issues need to be solved through philanthropic donations. Social impact investors believe they can advance good causes while also making money.

Last year, banks, pension funds, insurance companies and financial institutions globally committed about $15 billion to impact investment funding, and managed a total of over $77 billion in impact assets, data provided by the Global Impact Investing Network (GIIN) shows. Nearly 90 percent of the global impact investors GIIN surveyed said the financial performance of their investments was in line with or above expectations, with 19% reporting outperformance. Almost all of them reported an impact performance that was in line with or better than expectations, with 27% reporting outperformance.

Shareholder profit is the main motivation for most businesses, said Blilious, who set up Herzliya-based Impact First in 2011, after previously managing impact investments for a Dutch family foundation. But when you are an impact investor, then both profit and your social mission will be part of your company’s DNA and your bottom line.

“You are actually combining two missions in one,” she said. “So you have more than one bottom line and all your decision making process is going to rely on the fact that you are actually about solving an issue while turning a profit. And there shouldn’t be any compromise between making excellent returns and excellent profits and excellent impact.”

Cecile Blilious, the co-founder and managing partner of Impact First Investments. (Courtesy)

And whereas sometimes serving a certain type of population can be unprofitable, deterring regular enterprises, impact investors, who aim to serve those populations, will find ways to both serve them and make a profit. “In some cases it is all about thinking outside of the box and creating a solution aimed at that particular problem.”

In Israel the impact investment industry is still in its infancy, even though there are signs of an awakening. “Millennials today want to combine purpose with everything they do,” and entrepreneurs also often want to do “something that is deeper, that has more content and serves a higher purpose than only make money,” Blilious said. Even then, they still want to make a lot of money and be financially successful, she said, so impact investing is actually a “win-win situation.”

Others in Israel have been entering the fray, like the 8200 Social Program, an accelerator for social impact ventures founded by alumni of the elite 8200 Israel army unit, or the Pears Program for Global Innovation, which aims to increase Israel’s contribution to international development using technology-based and financially sustainable solutions.

Impact First, which has partnered with the community venture arm of Pitango Venture Capital, one of Israel’s largest venture capital funds, and has collaborations with Microsoft and Mayo Clinic, is seeking to raise over $20 million to increase its scope of investments.

Impact First has made investments in AngelSense, a wearable device to monitor the safety and wellbeing of children with autism, and Intendu, a startup that has developed software and hardware aimed at making brain rehabilitation accessible and affordable to all.

The firm uses the Global Impact Investing Ratings System (GIIRS) to assess the social and environmental impact of the companies it funds.

“Pioneering something takes a long time,” Blilious said. “You don’t want to go out into the market before you know you can actually really make good investments.” Creating an impact investment industry in Israel means “building a whole eco-system,” she said — bringing investors, entrepreneurs and the government on board.