PitchBook News - The time is ripe for impact investors

• There are signs that this niche segment of the market has seen a pickup in deal participation in the past few years. Impact investors' activity has grown each year since 2011, and since 2016, they've written checks in over 1,700 US venture-backed deals valued more than $24 billion, according to PitchBook data. However, impact firms' fundraising has been in decline since peaking in 2017, when 17 funds gathered a total of over $2.6 billion.


• Already this year has produced more than $3 billion worth of deals that were backed partly by impact investors, including Radicle Impact, Bain Capital Double Impact and BrightEdge, the impact fund arm of the American Cancer Society.


• Many of this year's funding rounds have been for companies dedicated to cleantech or other business models with an environmentalist-minded technology. Others have agendas centered on socially responsible business practices, which often revolve around issues like economic opportunity, public safety and social equality.


• In the current context of the plight of black Americans and other minority groups, few of the companies fundraising from impact investors have business models that focus on racial issues per se. Many advocates—including some impact investors—say that backing more startups led by people of color is one of the main ways to create economic opportunities for minorities. Although impact firms tend to share that view, their investment records have been more about the mission of the company than the race of its founder or CEO.

—Alexander Davis

• The pandemic has highlighted the need for data analytics and real-time monitoring services
   
• Warehousing tech startups continued to attract swathes of capital in Q1 2020 after a record-setting 2019
   
• Rising consumer demand for home delivery is driving investors and corporates to ramp up investment in last-mile logistics