Switzerland-based CHI Impact Capital and Germany-based Fase are partnering on a new fund for European impact ventures needing patient capital.
The European Catalytic Impact Investing Fund, or ECIIF, will make equity and mezzanine investments in early-stage impact ventures in northern Europe, focusing on education, employment, healthcare, food and agriculture, the circular economy and climate action. The partners are looking to raise €80 million to write checks of €1 million to €3 million each.
ECIIF builds on the European Social Innovation and Impact Fund, which Fase launched in 2021 with a guarantee from the European Investment Fund to encourage investors to support early-stage social enterprises. The new fund is also anchored by a €10 million guarantee from the EIF.
“The core idea is to expand the universe of financeable impact ventures and make ventures that don’t follow the traditional VC profile financeable,” Fase’s Markus Freiburg told ImpactAlpha.
Blind spots
In Europe’s startup scene, “there has been a strong focus on technology-focused innovation only,” Freiburg said. “We want to expand that to fund social innovation, which often also has a technological component.”
Unlike traditional VC funds, ECIIF will focus on social enterprises “that have organizational models that are not geared toward a sale of the company,” such as student ownership models or cooperatives or hybrid models.
“There are a lot of impact ventures that are not following exponential growth, and they need more patient capital, but they can still build significant, profitable business models,” he added.
Freiburg said ECIIF has commitments from public banks, foundations and family offices, but declined to name the fund’s LPs.
Track record
The predecessor European Social Innovation and Impact Fund is almost fully invested in more than two dozen companies. It has achieved seven exits.
Portfolio examples include Acker, a nature-focused education program for children. Ignitia is an AI-powered weather forecasting service for smallholder farmers in tropical zones. We Don’t Have Time is a media organization focused on climate action. A third of the portfolio’s ventures are women-led.
