ImpactAlpha, July 2 — Fifty Years, the mission-driven San Francisco venture capital firm, has two impact strategies: finding tech entrepreneurs tackling the world’s biggest problems, and reshaping global capital flows by showing companies founded by such entrepreneurs can be huge successes.
Partners Seth Bannon and Ela Madej have closed a $50 million Fund II, after demonstrating the theses with a sub-$5 million first fund.
“There’s so much promise in Silicon Valley and tech in general. But Silicon Valley is also one of the greatest examples of misallocation of resources the world has seen,” Bannon told ImpactAlpha. “The climate crisis. Disease. Malnutrition. These are what the best and brightest should be focusing on solving. This is where capital should be flowing.”
Bannon sees the tide starting to shift: investors in the new fund include founders of companies like Skype, Github, Google Brain, Minecraft and Baidu. “We want to be for impact tech what Netscape was for the internet,” Bannon says, “a wakeup call that this is real, this is happening and they better jump on board.”
Fifty Years (the name comes from Winston Churchill’s 1931 essay “Fifty Years Hence”) seeks to follow, rather than direct, entrepreneurial founders. But Bannon and Madej (along with new principal Shuo Yang), are keen on plant-based and lab-grown protein and synthetic biology. Alt-protein investments have gone mainstream with the growth of Beyond Meat and Impossible Foods; Fifty Years is invested in Memphis Meats and Rebellyous Foods.
“Every single animal product is being replaced with products that don’t come from animals,” Bannon says. Microbes and bio-manufacturing are likewise reshaping sectors from chemicals to energy to food.
Fifty Years’ first fund made $100,000 investments, on average, in 32 startups, most of them graduates of the Y Combinator accelerator. The second fund has already made more than 20 investments of between $500,000 and $1 million. “We’re just running the same playbook, with larger checks.”
That impact is tech’s new new thing is reflected by the top talent and new funds looking for tech solutions to social challenges.
Other impact tech funds include Sarah Cone’s Social Impact Capital, Sofia Hmich’s Future Positive Capital and Ev Williams’ Obvious Ventures. Techstars Impact targets the Sustainable Development Goals; Breakthrough Energy Ventures, climate; and Generation Investment Management, sustainability.
Bannon says Fifty Years seeks business models aligned with impact, but that portfolio companies are generally too small to implement true impact measurement. Of 50 companies, a couple have missed the mark on impact, he says. “If it was 10% or 20%,” he says, “that would be concerning.”