Sheeza Shah, founder of UpEffect, runs a crowdfunding and support platform for entrepreneurs “driven not by how much money they can make, but how many lives they can impact”.
She has worked hard to build her business “without external funding, using hard-earned savings to reach profitability”. As a tech-for-social-good startup, she is far from alone in doing so.
The sector is dedicated to solving some of the U.K’s biggest issues in areas such as education, health and sustainability. The government is interested - companies within the sector are sitting down to a roundtable with Digital Secretary Jeremy Wright in Downing Street this morning.
But, without the necessary investment to scale their businesses, some of society’s biggest and most pressing problems will remain unsolved.
That is one of the verdicts of Tech for social good in the U.K., a report from Tech Nation which also presents 19 other startups as “the ones to watch” alongside Shah.
What does tech-for-social-good mean?
The government-backed, U.K. network for entrepreneurs defines the tech-for-social-good sector as one where “digital technology tackles some of the world’s toughest challenges”. It cites, as examples of startups that have scaled sufficiently to make an impact, disposable fast-fashion up-cycler Depop and surplus food platform Olio.
The report, which analysed companies that self-identify as tech for good on their own website, calculates that there are 490 tech-for-social-good companies in the U.K. (0.2% of all startups) valued at £2.3 billion. They have a joint turnover of £732 million (0.4% of the total turnover by startups) and raised £1.09 billion from V.C.s.
But the concerns are not about the size of the sector but rather its apparent stalling.
The number of incorporations of tech-for-social-good startups reached up to 60 per year between 2012 and 2015 before declining precipitously to a handful in the following two years. Data for 2018 is not yet available.
At the same time, 45% of the firms in the sector remain stuck at seed stage, compared to 5% of the wider U.K. ecosystem, with very few managing to attract the funds necessary to accelerate and scale.
Tech Nation argues that “investors and shareholders focus too much on short term financial gains, rather than long term sustainability” leaving the emerging sector unable to scale. It makes a plea for more “patient capital”, having named those few VC funds that do invest in the sector.
Going forward
Drivers for the growth of the tech-for-good-sector suggest that the apparent hiccup in its growth might be short-lived.
Consumers in healthcare, education, sustainability and democracy are expecting products and services to match what they receive in the private sector. Technology is the key to delivering those solutions, is scalable and declines in cost after the initial outlay.
“There is little doubt that the notion of the purpose-and-profit economy will increasingly become common parlance in business in ten years’ time, as harnessing tech for scalable change becomes the expected norm,” as Gerard Grech, CEO, Tech Nation, puts it.
There are funders, including Bethnal Green Ventures, Big Society Capital, Big Issue and Mustard Seed, making market-rate returns. There’s just not enough.
Tech Nation’s list of “ones to watch”, along with its report into the sector, is intended to change that.
1. Agne Milukaite, CEO, Cycle.land
“Enables shared mobility including bikes, e-bikes, and e-scooters.”
What does tech-for-good mean to you? Technology has the potential to transform every aspect of our lives to deliver not only financial outcomes but also solve social and environmental problems.
What are the reasons to do it? Devoting energy, time and financial resources to be part of the solution to address some of the world’s biggest problems both feels good and does good.
What do you hope to achieve? Enact a genuine change in urban transport to reduce congestion, pollution and physical inactivity.
Funding? We raised two seed rounds totalling £570,000 on a current valuation of £4.2m. Shareholders include Oxford University Innovation, Parkwalk Advisors, and Seedrs.
What is your advice to others? Building a company is a marathon, not a sprint. Enjoy and take all the learning you are given.
2. Luca Schnettler, CEO, HealthyHealth
“to help individuals identify and prevent medical risks.”
What does tech for good mean to you? Any technology which benefits both the bottom line and affects your customers positively.
What are the reasons to do it? Doing good will enable the technology sector to move away from being labelled the “evil data gatherer”.
What steps have you taken? We have integrated HealthyHealth in insurance underwriting saving people as well as creating individualised prevention.
What do you hope to achieve? We hope to make data a commodity for people to use in a way which creates a win-win situation, both for the customer as well as the corporate.
Funding: Funding is £1.5 million from family offices and V.C.
What is your advice to others? Starting a business is a good thing in itself. If you combine it with a topic where you can create a benefit for all parties involved parties, you should go for it.
3. Dr Glyn Estebanez, CEO & Founder, Nexus Labs
“Using cutting-edge tech to help medical students and junior doctors better grasp key concepts that allow them to pass exams but also provide safer care to their patients.”
What does tech-for-good mean to you? It symbolises the drive to utilise technology to improve the experience of users but also have a profound impact on society in general.
What are the reasons to do it? Healthcare and education are areas that touch all of our lives and to improve the status quo. It is this that makes you excited to get up and come to the office every day!
What steps have you taken? I completed my MBA at Imperial college, left my career as a surgeon and founded Nexus Labs. The company gained pre-seed investment from two digital and healthcare orientated VC firms allowing the company to scale.
What do you hope to achieve? We want to change the landscape of online medical education and become the global leader in this industry.
Funding: Pre-seed investment (August 2018) from Catapult Ventures and BioCity.
What is your advice to others? Embrace and inspire those who follow you, be passionate about what you are creating and believe you can improve the lives of those around you.
4. Sheeza Shah, CEO, UpEffect
“A crowdfunding and support platform for companies dedicated to improving lives and the planet.”
What does tech-for-good mean to you? Technology has sadly been managed by many entrepreneurs for the purpose of increasing shareholder rather than societal wealth.
What are the reasons to do it? Frustrated by the disparities in social wealth distribution and harmful businesses being prioritised over social impact ventures, UpEffect was launched to equip entrepreneurs with capital and skills to start their own impactful businesses.
What steps have you taken? UpEffect bets on founders by taking no upfront fees and instead invests time and resources in helping social entrepreneurs get market ready.
What do you hope to achieve?
We will help the next Blake Mycoskie [U.S. entrepreneur who founded Shoes For A Better Tomorrow] build the next TOMS Shoes and the future Muhammad Yunus [Bangladeshi banker who pioneered microcredits] reach populations that are frequently overlooked.
Funding? Bootstrapped with founders using savings.
What is your advice to others?
If you truly wish to drive impact, work for or with businesses using technology responsibly and create dignified employment opportunities for under-represented communities.
5. Signum Health: Enables professionals to electronically and remotely diagnose and refer patients to health providers.
6. YOURmeds: “To help you take medication better.”
7. CareRadar: “Find the right care, whatever your needs or budgets.”
8. HiveWire: “A social care staffing platform which helps providers reduce excessive agency staffing costs.”
9. Slashpay: “We provide smart payment tools for small business so they can receive payments without writing a single line of code.”
10. Ethica Angel: “A powerful technology enables service for engaging and developing employees through volunteering.”
11. Woods Valldata: Fundraising services provider for not-for-profit organisations.
12. B-Social: “App and best debit Mastercard that makes money as social as your lives.”
13. Surgical teaching: “A video learning platform that helps everyone get better.”
14. Study Rocket: “The largest, searchable library for exam-specific revision content.”
15. E-Cert Healthcare Training: “Professional training and development for today’s care industry and workforce.”
16. Imsomi: “The medical peer review for students and tutors.”
17. Holiday Swap: “Exchange homes and broaden your horizons.”
18. Kindaba: “A visual intelligent messenger for those who matter most.”
19. Care Rooms: Arrange a safe place for people to enjoy a better recovery.
20. Folk2Folk: “The local lending movement.”
