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Five ways to accelerate tech for good

Tech for good — the idea that businesses aim to create positive change — is a hot topic right now. But how can the sector grow further?

By Connor Bilboe

Impact investing is in vogue. This week, French VC investor Marie Ekeland has launched a new impact fund, last week, Belgium-based VC firm Astanor Ventures raised a $325m fund to invest in agriculture and food tech companies, and in September vertical farming startup Infarm raised a whopping $170m for its ‘greener’ food production system. 

A debate still rages over what exactly constitutes an ‘impact tech’ or ‘tech for good’ company — although there’s a general consensus that these are businesses which aim to drive positive change for people and/or the planet — but the sector has certainly become top-of-mind for many investors.  

How, though, can ‘tech for good’ grow further and become more mainstream?

Our latest Sifted Talks, in partnership with the BMW Foundation, delved into the topic with a panel of sustainability-focused founders, investors and executives, featuring:

  • Heba Aguib, CEO of RESPOND at the BMW Foundation Herbert Quandt
  • Ravi Gurumurthy, CEO at innovation foundation Nesta
  • Lubomila Jordanova, cofounder and CEO of sustainable business platform PlanA.Earth and cofounder of Greentech Alliance
  • Antonio Miguel, managing partner of impact investor MAZE Impact

Here are the top five highlights:

1. Support impact with hard evidence

Backing up the positive impact of technology is key to accelerating tech for good.

Nesta’s Ravi Gurumurthy says that companies in sectors like healthtech and edtech need to prove the impact of their technology by providing the “highest standard of evidence”. This could be rigorous experimentation to test the effectiveness of a vaccine, for example.

“It’s not good enough to have just data on before and after [the experiment], because the impact could be attributed to something else,” he says.

Lubomila Jordanova warns that not following proper scientific methodologies when pursuing tech for good can be disastrous. “If companies give a perspective about their environmental [or social] performance that is inaccurate, this is really scary because if this goes into the mainstream then it becomes a standard that we’ve defined as acceptable.”

“We need to allow some room of manoeuvre for agility and innovation, otherwise transaction costs will increase so much that it becomes unbearable.”

However, MAZE Impact’s Antonio Miguel points out that startups at a very early stage should not be burdened with gathering too much evidence of their impact: “We need to allow some room of manoeuvre for agility and innovation, otherwise transaction costs will increase so much that it becomes unbearable,” he says.

“It’s absolutely wrong to say right from the start that you should go into a heavy evaluation process. It’s both costly and will kill your ability to evolve and adapt which is crucial in the early stages,” adds Gurumurthy.

2. All stakeholders have a role to play

Early-stage startups can only achieve so much. But getting under the wings of corporates, governments and NGOs could help to fuel tech for good for all.

Aguib believes that it’s a better time than ever for startups to be partnering up with bigger companies: “A lot of corporates are now acknowledging their roles, getting their own sustainability strategies and measuring their impact. Hopefully startups who have impact at the core and corporates trying to embed sustainable strategies will find better ways to interact,” she says.

Integrating all stakeholders is another way to push tech for good to the forefront, says Jordanova: “I think we’re now at a transitional moment where all the stakeholders are recognising that they have a part to play in this and everyone has to find out how they can contribute best,” she says.

“…stakeholders are recognising that they have a part to play in this and everyone has to find out how they can contribute best.”

Jordanova finds that corporates are “open to listening” and willing to invest in tech for good, based off PlanA.Earth’s experience partnering with clients like the BMW Foundation: “Corporates understand that it should not take five years to put something in place with regards to sustainability, or green IT, carbon footprinting and so on,” she adds.

3. Governments can guide the way

Now is a good time for governments to guide tech for good to the next level.

Gurumurthy, who previously worked for the UK government’s energy and climate change department, thinks that its role in regulation has a huge impact on other stakeholders, especially VCs: “The government has to get serious about guiding the technology race, by making policies to stimulate innovation and being able to reward the high-growth firms. By doing that, you might make it more viable for VCs to actually get engaged,” he says.

A good example of this is the Green Deal, the European Union’s dedicated funding instrument for tech for good startups via the European Innovation Council (EIC). Jordanova says: “The Green Deal has revolutionised the way startups think about money.”

“The government has to get serious about guiding the technology race…”

Meanwhile, Jordanova recommends that tech for good startups apply to government-based funding schemes, such as the EIC Accelerator, as a way to access capital and networking opportunities: “The EU is really working hard on making us a more sustainable, equal society. A society that is able to recover better after Covid. And there’s money sitting on the table that people with good ideas can grow,” she says.

When looking at governments’ roles in tech for good on a global scale, Aguib points out the differences between governments in and out of Europe: “There are governments that are not going to support [certain global challenges], and there are models that are not going to work internationally.” 

She says it’s important to work on the European government’s role of creating more impact on a global scale: “It’s also the future here [in Europe] when you invest outside of here,” Aguib says.

Tech for good webinar
The webinar in action last week.

4. Diversify VC teams

Many investors have remained sceptical about making money off tech for good startups, for themselves and their LPs. 

But Miguel believes in order to change this narrative, VC teams need to be more diverse: “We need to see an intergenerational shift in VC teams so that more first-time fund managers can emerge.”

“I have the feeling that younger fund manager teams will focus more on impact than many incumbents not because they don’t believe but because it’s a different playbook to what they’re used to,” he says.

5. Funding isn’t the only option

It’s not only about the money, plenty of other factors can help to turbocharge the impact movement.

Miguel says that consumers are hugely influential in steering tech for good: “I am always inspired by the power of consumers in driving impact and sustainability,” says Miguel, pointing out that many of the corporates onboard the sustainability train are consumer goods companies like Carlsberg.

“Consumers will always drive a big portion of what corporates do, of what innovation is needed and where capital will flow,” he says.

Jordanova adds that talent is also key: “There’s a lot of people that want to find the balance between a purpose and intellectual fulfilment.”

“Consumers will always drive a big portion of what corporates do, of what innovation is needed and where capital will flow.”

Aguib says if tech for good is to be accelerated further, it’s about upskilling new and existing talent: “Skilling and reskilling people in order to cope with the tech for good transformation is key. It’s about building knowledge, empowering people with the right mindsets, setting the intention and understanding the complexity of the future.”

The themes in this Sifted Talks are further explored in the report ‘Protect | Empower | Transform: Tech Innovations Changing The World’ available to download for free here.

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