In Partnership with
&
01

Key Findings

CCE0B547-8741-413C-87E1-6A66D227929BCreated with sketchtool.
04

Investors

CCE0B547-8741-413C-87E1-6A66D227929BCreated with sketchtool.
07

Purpose

CCE0B547-8741-413C-87E1-6A66D227929BCreated with sketchtool.
09

Policy

CCE0B547-8741-413C-87E1-6A66D227929BCreated with sketchtool.
11

Appendix

CCE0B547-8741-413C-87E1-6A66D227929BCreated with sketchtool.

Purpose-driven Investment

Measuring purpose-driven investment in European tech

2019 saw a huge spike in investment into European tech companies that are seeking to solve some of humanity's most pressing problems.

We partnered with Dealroom to try to quantify this trend and identify the growing universe of purpose-driven venture-backed European tech companies.

To do so, Dealroom created a framework to assess venture-backed European tech companies based on their alignment with the United Nations Sustainable Development Goals.

In this first iteration, the analysis focused on a subset of seven of the seventeen Sustainable Development Goals, selecting only those where Dealroom.co has observed greater levels of European venture-backed startup activity. For each of the selected SDGs, Dealroom manually assigned keywords used to tag companies in its platform to search for and identify a first set of potential companies for review.

The initial results set was then manually reviewed by Dealroom analysts to evaluate the companies for fit against one or more of the SDGs and assign them to those SDGs accordingly.

Additionally, Dealroom's team also manually differentiated all companies in the dataset based on whether the purpose-driven impact of the company was ‘core’ to the business model, or a ‘peripheral’ or indirect component of the business model.

Only companies where the purpose-driven impact was considered core to the business model were included in the final dataset and analysis. In total, the analysis identified 528 unique venture-backed, purpose-driven tech companies. The full list can be accessed on Dealroom's platform here.

We understand the methodology has limitations and see this as a first attempt to seek to build a more robust analysis of European purpose-driven tech companies. We welcome feedback and will update this work both in terms of scope and methodology in future iterations.

The analysis has an initial focus on identifying companies that are addressing a subset of seven of the seventeen United Nations Sustainable Development Goals.

Overview of SDGs included in analysis and mapping to keywords on Dealroom platform

There are more than 500 European tech companies who received funding since 2005 that are tackling at least one of the UN's Sustainable Development Goals as a core part of their mission. SDG 13 on Climate Action is by far the most addressed goal.

Number of purpose-driven European tech companies per Sustainable Development Goal, 2005-2019

Note:
Based on a set of 528 unique companies identified by Dealroom. The sum of all companies per SDG is greater than that number as some companies may be addressing more than one goal.

Selected purpose-driven European tech companies

Germany

Germany

SDG 2: Zero Hunger

France

France

SDG 2: Zero Hunger

Netherlands

Netherlands

SDG 2: Zero Hunger

United Kingdom

United Kingdom

SDG 3: Health and Well-being

Netherlands

Netherlands

SDG 3: Health and Well-being

Sweden

Sweden

SDG 3: Health and Well-being

United Kingdom

United Kingdom

SDG 7: Affordable and Clean Energy

Sweden

Sweden

SDG 7: Affordable and Clean Energy

United Kingdom

United Kingdom

SDG 12: Consumption and Production

United Kingdom

United Kingdom

SDG 12: Consumption and Production

Sweden

Sweden

SDG 13: Climate Action

Finland

Finland

SDG 13: Climate Action

Investors have supported purpose-driven European tech companies with over $4 billion in capital investment in 2019, up more than 6x over the past five years and taking the cumulative total invested since 2015 to close to $10B.

Capital invested ($B) in purpose-driven European tech companies per year

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

Purpose-driven European tech companies focused on climate action and clean energy have attracted the highest level of capital investment, followed by those focused on health and well-being.

Capital invested ($M) in purpose-driven European tech companies per Sustainable Development Goal addressed

Legend

  • SDG 2: Zero Hunger
  • SDG 3: Health and Well-being
  • SDG 6: Clean Water and Sanitation
  • SDG 7: Affordable and Clean Energy
  • SDG 11: Sustainable Cities and Communities
  • SDG 12: Consumption and Production
  • SDG 13: Climate Action
Note:
Companies addressing more than one Sustainable Development Goal are counted against each individual SDG they are targeting. As a result, the total capital invested sums to be greater than the total capital invested presented in previous chart.

This also comes across in the Sustainability/Climate change and Cleantech narrative in Europe, where nearly 50% of all news are focused on tech startups and VC investments.

This also comes across in the Sustainability/Climate change and Cleantech narrative in Europe, where nearly 50% of all news are focused on tech startups and VC investments.

This year the number of purpose-driven European founders who have pitched to us has been overwhelming.

This year the number of purpose-driven European founders who have pitched to us has been overwhelming. European founders have the most powerful tech toolkit in history, and they are stepping up to help solve some of the world's most pressing challenges such as the climate crisis and healthcare. In doing so they will build huge commercial successes, the global category winners of tomorrow. I believe companies who are purpose driven will outperform the companies who are not. Being mission-driven makes business sense. Many consumers - specifically younger consumers - would rather pay more for something that's sustainable. Younger employees want to work for companies with a mission, and they will leave companies they think are doing things that are negatively impacting society or the environment.

Niklas Zennström

Atomico

Founding Partner & CEO

Purpose-driven European tech companies have raised huge rounds in 2019, topped by a $1B investment into Sweden's Northvolt, founded in 2016 with the mission to build the world's greenest battery and enable the European transition to renewable energy.

Top 10 largest deals raised by purpose-driven tech companies in 2019

Note:
Based on deals announced between 1 January 2019 and 30 September 2019 only.

For the team here, there's no bigger motivator than knowing you’re applying your skills to improving the lives of patients, their carers and their families.

At Healx we believe every rare disease patient deserves a treatment. It's this belief which drives us to achieve our mission of taking 100 new treatments towards the clinic by 2025. Having such a clear mission also helps with recruiting and retaining the best and brightest talent. For the team here, there's no bigger motivator than knowing you're applying your skills to improving the lives of patients, their carers and their families. This is especially the case for the many team members who count either themselves or a relative amongst the 400 million people worldwide living with a rare disease.

Kate Hilyard

Healx

COO

'Tech for good' generally addresses humankind's most important needs, which means the largest markets.

Ÿnsect is a mission-driven company from Day 1. It is right in our DNA, as we came from an activist non-profit association. We see more and more projects and entrepreneurs looking to have an impact, to have a purpose, with great ideas showing that profits and impacts can be compatible. Amazing companies like Olio, NorthVolt, OpenClassRooms or Doctolib demonstrate that Impact Unicorns won’t be a myth! Europe could become the best place for 'tech for good' companies, which will have tremendous positive economical and social impacts in Europe and beyond, as 'tech for good' generally addresses humankind's most important needs, which means the largest markets.

Antoine Hubert

Ÿnsect

CEO

As a result of the large funding rounds raised by some of the leading players, capital invested into purpose-driven companies accounted for more than 12% of total capital invested into European tech in 2019, more than double any previous year.

Capital invested in purpose-driven European tech companies per year as a share of total capital invested (%)

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

A significant part of our own portfolio is in life sciences and digital health and clean growth, mobility and transportation. Not only are there social positives from investing in these types of companies, there are also potentially very large commercial returns available both for VCs and LPs.

Consumers are becoming increasingly values-driven in their lifestyles and this in turn affects how they spend their money. Consumers will look for businesses with values similar to their own, whether that's how a company improves its environmental impact and treats workers in their supply chain or the way it works within its local community. While much of VC is still focussed on areas like Enterprise Software and Fintech, there are significant market opportunities in areas that tackle global issues like efficient energy, sustainable consumption and health and social care. A significant part of our own portfolio is in life sciences and digital health and clean growth, mobility and transportation. Not only are there social positives from investing in these types of companies, there are also potentially very large commercial returns available both for VCs and LPs.

Christine Hockley

British Patient Capital

Director of Investments

The number of deals involving purpose-driven European tech companies has been increasing steadily over the past five years.

Number of deals involving purpose-driven European tech companies per year

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

Though the absolute number of deals is increasing (when factoring in the reporting lag) and the share of total deals has been rising consistently, investments into purpose-driven European tech companies still only represented less than 5% of all deal activity in 2019.

Deals in purpose-driven European tech companies per year as a share of total deals (%)

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

The UK, France and Germany are home to the highest number of purpose-driven European tech companies.

Top 20 countries by share of purpose-driven European tech companies

Legend

  • % of purpose-driven companies
  • % of all companies
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

We owe a great debt to the Berlin community who received us and welcomed our vision to challenge the status quo in how we transport, plant and harvest produce in cities. However, at heart, we think of ourselves as an international company serving an international community. Over the next several decades, we’ll need a diversity of talent, perspectives and creativity to truly contribute to a system of urban food production that is sustainable and effective for cities around the world. We are all trying to tackle global problems - I believe this lends particular importance to thinking of ourselves in a global way.

Osnat Michaeli

Infarm

Co-Founder

But looking on a relative basis, it's clear that some countries are much more overweight towards purpose-driven tech companies when benchmarked against their overall share of all European tech companies. Sweden, for example, is home to nearly 10% of purpose-driven tech companies, but accounts for only 4.3% of all European tech companies, a difference of 5.1% points.

Rank of countries by %-point difference in relative share of purpose-driven European tech companies versus all European tech companies

Legend

  • %-point difference
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

In absolute terms, London is the capital of purpose-driven European tech companies; it is home to nearly one in 10 companies with a purpose-driven mission. But on a relative basis, Stockholm is by far the number one city, with the heaviest weighting towards purpose-driven tech companies compared to its share of all European tech companies.

Top 10 European cities by share of purpose-driven European tech companies

Legend

  • % of purpose-driven tech companies
  • % of all European tech companies
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, grants. Please also note the data excludes Israel. 2019 annualised based on data to September 2019.

Share this article