This Impact Investing Platform Was Set To Be A Game-Changer. So Why Did It Fail?
Friday, January 26, 2018
Launched in April last year, the ImpactUs marketplace was supposed to open up impact investing to new organizations and new funders. It was meant to be a major development in the emerging–but still limited–field of investing for both financial, and social and environmental, benefit. But, little more than eight months later, it has closed. “The ImpactUs Marketplace was formed with the goal of simplifying the impact investing process,” reads a message on the group’s website. “Unfortunately, we have had to make the difficult decision to cease operations.”
By making it easier for investors and mission-driven organizations to find each other and do business, the Kickstarter-like platform was set to spur major “new deal flow,” according to its founders. They hoped to be doing deals worth $100 million by now, and to have $3 billion in assets under management within 10 years. But apparently it didn’t have enough startup funding to become a sustainable operation, according to groups that used the marketplace to raise capital.
Impact investors often complain about a lack of ready-made opportunities for their capital. ImpactUs took on a screening role, defining what was on offer and laying out minimum investment levels and expected returns. Purpose-focused groups like B-Corps and community development financial institutions (CDFIs), meanwhile, say they lack the capacity to market themselves to investors and manage complex legal and tax paperwork. ImpactUs offered to take on those roles as well, providing an approachable website, online transaction processing, and back-office support.
Photo courtesy of Olu Eletu.