Two years ago, we raised our first impact fund, closing just under $7M in the fall of 2017. Since then, we have made over 73 investments and our fund is nearly fully invested. 

In addition to investments made through our Techstars Impact Accelerator (Austin, TX), Techstars Sustainability Accelerator in partnership with The Nature Conservancy (Denver, CO) and Cox Enterprises Social Impact Accelerator powered by Techstars (Atlanta, GA), this fund participates in Seed and Series A deals of impact companies across our global ecosystem as well.

Today, our impact portfolio spans multiple industries: from healthcare to financial services and insurance, to housing and supply chains and logistics. Our portfolio has global reach, representing companies operating around the world from Singapore, to Nigeria, to right here in the United States.

For example, Aunt Bertha (Austin, TX), a search and referral platform connecting individuals to health and human services, has raised over $22M to date. DroneSeed (Seattle, WA) uses FAA approved drone-swarms for agricultural payloads to take reforestation to scale, and has raised over $7.5M. And Connxus (Cincinnati, OH), a supplier management platform that enables procurement professionals to manage supplier risk, supplier diversity and sustainable sourcing, has raised nearly $17M to date.While our Impact Portfolio is still young, our 73 investments have given us a unique vantage point into emerging trends in the impact startup ecosystem.

Here’s What We’re Learning:

Impact Companies are Pacing on Performance — the impact advantage?

In 2016 we evaluated the historical performance of impact companies, and in a comparison of the collection of companies meeting our impact criteria compared with our general portfolio, our impact companies outperformed. Of these companies, Zipline, which builds drones to deliver life-saving medical supplies and went through our 2011 Techstars Seattle program, was recently valued at $1.2B.

Earlier this year, we repeated this analysis for all companies that went through a Techstars accelerator between 2012 and 2018, to compare the financial performance of our investments: all impact companies versus all Techstars companies, using gross multiples from our investments as the measure. Again, for every year between 2012 and 2018, our impact companies outperformed our overall portfolio: the range of outperformance varied between 6% and 26% in various years during this time period.

Over the last 18 months our investment activity across stages mirrors this trend with impact companies as a percentage of total investments made at Techstars (impact and general) increasing by stage:

Investment Activity by Stage (2018 – Q1 2019 investments)

Total Investments – Impact Fund

Total Investments – Techstars*

% of Total Investments Made*

Accelerator Companies

34

426

8%

Seed Deals

6

49

12%

Series A Deals

4

15

27%

*Over the same time period across each category
Source: Techstars Impact Report

The Pipeline is Growing

Ahead of launching our first impact fund, we analyzed our historical portfolio and found that between 2013 – 2016 the number of impact companies accepted into our accelerator programs was growing by over 50% year-over-year and represented just under 10% of our portfolio. We’ve since watched this trend continue. Between 2016 – 2018, companies with ties to the UN Sustainable Development Goals that participated in our accelerator programs have gone on to make up nearly 29% of our global portfolio.

Impact Companies Are Emerging Around Four Key Trends

As a venture investor in impact, the mission of our approach to aligning financial returns with impact outcomes is to focus on areas where an impact opportunity directly aligns with a large market opportunity. Over the last decade, four key trends have enabled this:

      1. Technology creating first-time access to previously inaccessible markets;
      2. A fall in the cost of technology enabling the delivery of impact products down-market;
      3. A rise in consumer demand for ethical, sustainable products and business practices;
      4. The rise of global impact threats that, if uncorrected, represent existential business risks to top global corporations and our global economy

Market-Driven Technology Solutions Can Drive Real Impact at Scale

In May of this year we published our first Impact Report and across 44 companies. This report focused on our impact portfolio, which has delivered the following results:

      • 3.7M people impacted
      • 768,000 pounds of food diverted from landfills
      • 14,221 tons of CO2 emissions avoided
      • $6.2B in second tier diversity spend enabled
      • 500+ jobs supported

Join Us on October 3rd to Hear How Our Most Recent Investments Are Impacting the World

On October 3rd, our ten newest investments out of our impact fund will take the stage in Austin, TX to showcase how they are leveraging innovative technologies to drive social and environmental impact around the world – from Ghana, to Nigeria, to Mexico, to right here in the United States. 

While their business models range from delivering animal vaccines to African farmers at the last mile to a new form of background check for the 1-in-3 American consumers living with a criminal record — their mission is similar: scaling market-driven technology solutions to our generation’s most pressing challenges.

If you would like to attend Techstars Impact Demo Day on October 3rd, please RSVP here.


impact, techstars impact


Zoe Schlag Zoe Schlag
Zoe is the Managing Director of the Techstars Impact Accelerator in Austin. She is the Founder & Executive Director of UnLtd USA, providing seed funding and venture support to entrepreneurs tackling pressing social and environmental challenges. She is an Aspen Ideas Scholar, formerly a Mentor-in-Residence at Techstars and has worked with social ventures across the United States, India and Africa.