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Happy New Year!

To mark the first day of 2015, here are my #ImpInv Trends and Predictions.

The following trends were already evident in 2014 and I believe we’ll continue to see activity in these areas:

  • Increased corporate finance and M&A activity in Impact Investing: Big name US ventures attracted M&A activity in 2014, with TOM’s partial sale of equity to a private firm (as mentioned in the September edition of the Pique Ventures newsletter) and Honest Company reported it is planning an IPO (October edition). Increased corporate finance and M&A activity in impact investing could result in more exit opportunities and liquidity events for investors and the recirculation of capital amongst new impact ventures.
  • Investment leadership from traditionally marginalized or under-represented groups such as women, minorities: The impact investing space has plenty of opportunity to innovate itself, not just invest in innovation. Diversity amongst impact investment leadership has room to improve. We featured Third Cohort in our November newsletter. More recently, we read about Anu Duggal’s women-led, women-focused fund
  • Corporate venturing: In our December newsletter, we spotlighted corporate impact venture initiatives by Patagonia, Seventh Generation and The Gap. A rising trend in corporations investing in impact ventures, like increased M&A activity, could have the effect of more liquidity events for investors, and new sources of capital for impact ventures.

Here are my predictions for 2015:

  • Emerging managers and co-investment: Watch for new entrants to the impact investment fund market. Watch also for collaborative approaches involving more established funds and investors co-investing with new managers or large funds co-investing with smaller funds as a way of helping emerging funds and managers grow. This can give rise to more investment opportunities for investors and more opportunities to access capital for impact entrepreneurs.
  • More cross-border Impact Investing activity: We’re seeing more collaborations across borders including Canadians at SOCAP, people exploring the expansion to Canada by impact investing networks Investors’ Circle and Toniic, and more recently, the partnership between Richard Branson’s Unite and Toronto’s MaRS.
  • Sectors to watch:
    1. Health and wellness continues to be a sector attracting capital, entrepreneurs, and new ideas. We saw a lot of wearable health tech, health-focused and activity-focused social networks, and health data tracking and management ventures, the new opportunities lie in mental health and wellness and innovations in wearable tech beyond gadgetry. BC ventures to watch: Perked!, SnugVest, LifeBooster.
    2. Financial services – I’m paying attention to ventures aiming to make financial resources and information more transparent and accessible. Crowdfunding increasingly garners attention as capital-seekers and investors try to figure out how to best make positive impact and returns through crowdfunding. BC ventures we’re watching: Refresh Financial, Hoovest, FundRazr.
    3. Consumer products – opportunities for layers of impact continue to exist with consumer products. Whilst changes may be happening at the global level, at a large scale with corporate venturers Seventh Generation and Gap in collaboration with Tau Investments, local ventures and organizations strive to produce consumer products with quality, ethical manufacturing, job creation, and sustainability in mind. Ventures we’re watching for growth: Nicole Bridger Designs. Not-for-profit and hybrid organizations we’re watching for future investment potential: East Van Roasters, Sole Food Farms.

I hope everyone enjoyed a happy and healthy holiday season. Here’s to an exciting and prosperous new year.