Our Social StartUp initiative was a success, with nine companies making it through the six-month accelerator program. FSE is now working on a Nordic model for Social StartUp together with Denmark’s Social Capital Fund.
Three new social investments and one impact fund investment were added to FSE’s portfolio, which comprised a total of 11 companies at the end of 2018.
Assistert Selvhjelp was crowned Social Entrepreneur of the Year for its online solution for its online solution for improving mental health.
FSE was engaged with setting up an ecosystem designed to make it more efficient for supporters and social entrepreneurs to contact one another.
In 2018 FSE began to see tangible results from its long term yet impatient approach to venture philanthropy. It was a year in which the social entrepreneurship sector became significantly more mature. A number of new initiatives were launched, including Social StartUp and the Ecosystem for Social Entrepreneurship (ØSE), while our long-standing SosEnt Conference became a celebration of social entrepreneurs. Impact management also superseded impact measurement in 2018, while FSE paid more attention to the Nordic region in general.
In 2018, the FSE portfolio grew stronger through the addition of several new innovative companies, with the business area also investing in a fund for the first time in the form of Den Sociale Kapitalfond Invest. At the end of 2018, the portfolio was weighted equally between equity investments and grants. Much like the field of social entrepreneurship as a whole, FSE has become more mature, and we are pleased that our social entrepreneurs are keen to have FSE on board, not only as a supporter but also as a co-owner. It is clear that the growing trend for private and institutional investors to seek social impact in addition to a financial return became more established over the course of 2018.
2018 was a year of significant learning and professionalisation. A study trip to Barcelona with other Norwegian social investors along with visits to leading organisations in London and Glasgow enlarged FSE’s network and strengthened our specialist expertise. Theoretical concepts such as social impact bonds, social bridging finance and private-public partnerships are becoming accepted practice and are offering new opportunities.
2018 was also the year in which launching social results was given a more professional format through a warm-up session for a TEDx event on social entrepreneurship.
A number of major changes were made to the portfolio in 2018. At the end of the year, FSE had one company in its “To hold” starter program, 10 companies in its portfolio and one fund investment. The new company in the starter program was POPrommet, while the companies that joined the portfolio were Generation M, Auticon, No Isolation and Motitech. Generation M graduated from the starter program to the portfolio, and we extended our collaboration with the company by three years, while Auticon, No Isolation and Motitech were admitted directly into the portfolio as a result of FSE taking equity stakes in them. The fund in which FSE invested was Den Sociale Kapitalfond Invest I, which was set up by the Danish Social Capital Fund.
POPrommet: POPrommet (“the Pop Room”) is a social entrepreneur spearheaded by Venke Knutson, a famous singer and songwriter. POPrommet offers high-quality music tuition to everyone, regardless of age or level. With its “Don’t label me!” concept, POPrommet seeks to ensure that it is not the past that defines what people are offered and what is expected of them, and the concept is aimed at young people who have experienced exclusion at school or an institution, in their working life, at home or in child protection services. The company’s activities help create self-mastery, motivation, development and engagement for those who want it.
Generation M: Generation M creates relationships between generations by offering visiting services for people in nursing homes, sheltered housing and their own homes. The company’s ‘visiting friends’ are young people aged between 14 and 20 who complete activities for elderly people, either individually or in groups. Generation M was awarded Social Entrepreneur of the year in 2016.
No Isolation: No Isolation creates tech tools to help end loneliness and social isolation among vulnerable groups in society. Its products are developed on the basis of concrete and unmet needs, and the company involves its users at all stages of the process, from ideas on the drawing board to production. No Isolation cooperates closely with other companies, charities and the public sector.
Motitech: Motitech was awarded Social Entrepreneur of the Year in 2017, and Ferd took an ownership stake in the company in 2018. It uses exercises bikes, video and sound to offer a welfare tech solution that strengthens the health and wellbeing of elderly people. With a foothold in over 300 institutions in the Nordic region, Motitech started up in the British and Canadian markets in 2018. FSE invested in the company to help it to scale up and to assist it with professionalising how it manages its social impact.
MindSpark/Auticon: MindSpark is an American IT consulting company that employs people with autism spectrum diagnoses. MindSpark assists its customers with software development, design, data analysis, quality control and testing services. In 2018 FSE invested in the acquisition of MindSpark together with Auticon, a German IT company with the same business concept.
Den Sociale Kapitalfond Invest I K/S: In autumn 2018 FSE invested in Den Sociale Kapitalfond Invest I. The fund primarily invests in Danish companies that have a clear ambition to deliver a double bottom line, specifically to create jobs for vulnerable groups in addition to a strong financial return. The fund has total commitments of DKK 289.3 million, and Ferd’s co-investors include the European Investment Fund (EIF), the Danish Growth Fund, the Novo Nordisk Foundation, Tryghetsgruppen and Chr. Augustinius Fabrikker. This investment is the first time FSE has invested in a fund, and it is also the first investment FSE has made in Denmark. The investment has also resulted in FSE strengthening its collaboration with the Danish Social Capital Fund, our partner for the Social StartUp initiative.
FSE has worked for a long time to make it easier for social entrepreneurs to reach out to their customers. A key part of this work is engaging in dialogue with different public bodies and municipalities. Our experience is that there is a lot of commitment to the value creation that social entrepreneurs represent, but we have also come to understand the obstacles municipalities and other organisations perceive and experience when engaging with small and innovative suppliers. We therefore spent time in 2018 on the collaboration agreement we have with the Municipality of Bærum, on arenas that facilitate co-creation (together with the Norwegian Association of Local and Regional Authorities, Innovation Norway and SoCentral) and on a legal guide relating to public procurement from, and collaboration with, social entrepreneurs.
Collaboration between organisations active in the field of social entrepreneurship has become more formalised and the organisations now have a stronger collective voice. The aim of the Ecosystem for Social Entrepreneurship (ØSE) is to make it easier for social entrepreneurs to find their way among the various useful sources of help and the increasing number of tools. ØSE collaborated with Innovation Norway to form the jury tasked with selecting the winner of our ninth Social Entrepreneur of the Year competition, with the prize awarded at a major event for people committed to social entrepreneurship and social innovation in Oslo on 21 November. Assistert Selvhjelp AS was the 2018 winner and was awarded the prize, along with the NOK 500,000 in prize money from Ferd, in front of 400 attendees.
Social StartUp is a tailor-made accelerator program that helps fledgling entrepreneurs with a double or triple bottom line ambition to become financially sustainable at an early stage. FSE and its partners ran the Social StartUp accelerator for the first time in 2018. From the stack of 125 applications, 30 companies were selected to take part in a three-day boot camp, following which nine were chosen to take part in a six-month accelerator program. The nine companies’ business developers sat shoulder-to-shoulder with each other and took part in three camps that looked in detail at customers, finance, social impact and management. The companies made good progress in terms of delivering stable double or triple bottom lines. Their business models changed, they identified KPIs, and networks were built. Following the success of the first round, the second is already underway. We are excited about the new companies that we will follow in 2019.
Social StartUp is based on a proven model from Denmark’s Social Capital Fund. As a result of the strong results and the experience we gained from running our national Social StartUp, we are now looking forward to scaling the accelerator program up to a Nordic programme.
In 2018 the FSE team had six full-time employees. The team has a good gender balance, with three women and three men. The increase in the team size facilitated greater flexibility and gave us the chance to reflect on how we can support our portfolio companies, create enduring value and leave clear footprints. By expanding the team with more business developers, we created space for internal systematisation and helped strengthen our monitoring work.
The field of social entrepreneurship is still blooming, and being a social entrepreneur attracts more people every year. FSE is seeing more municipalities starting to become more aware of social entrepreneurs, but we still recognise that social entrepreneurs face challenges in working with the public sector. Our desires for 2019 are more value creation, more procurement from social entrepreneurs, impact contracts and/or bridge financing, and for diligent use to be made of The Legal Guide.t. FSE also envisages there being greater and wider commitment across the Nordic region as well as more incentives across national borders. FSE are working with partners and social entrepreneurs to be a part of the further development of the Nordic welfare model.