SIS Ventures’ Impact First fund launches second funding round with higher target than pre-pandemic attempt

Scottish impact investor SIS Ventures, the venture capital subsidiary of Social Investment Scotland, has launched a second round of fundraising for its Impact First fund, targeting £5m.

The Impact First fund makes equity investments in Scottish early-stage impact businesses with a high growth potential. Since it was launched in 2018, it has invested £1.3m into eight mission-driven companies, including Dxcover Limited, which provides early diagnosis for life-limiting diseases such as cancer, and Cyan Forensics, which tackles harmful behaviour online.

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An earlier effort to raise further investment for the fund was cut short by the pandemic two years ago. The current fundraising target of £5m is 35% higher than the February 2020 one, reflecting SIS Ventures' raised expectations of the level of demand from both investors and entrepreneurs, the impact investor told Pioneers Post.

David Ovens, chair of SIS Ventures, said “a global culture shift” was under way to “build a more impactful and inclusive economy” and that today’s issues required “ever more innovative solutions”. 

He added: “At SIS Ventures we believe that impactful businesses, those that combine profit with purpose, are the future and should be supported with the full power of the investor community.”

We believe that impactful businesses, those that combine profit with purpose, are the future and should be supported with the full power of the investor community

Investors in the second fundraising round will support existing investees as well as new impact businesses, while benefiting from up to 30% income tax relief through the Enterprise Investment Scheme – a UK government initiative to stimulate equity investment in early-stage companies. 

The minimum investment required is £20,000, with each investor invested in at least six businesses over a period of seven to 10 years.

Expectations surpassed

Jill Arnold, head of SIS Ventures, said the level of demand for investment from impact entrepreneurs had “surpassed all of [their] expectations” and that there was “more than sufficient appetite” for this type of growth funding.

The performance of the fund so far “visibly proved” the investment case for impact investing, she added.

SIS Ventures requires its investees to “lock in” their social or environmental mission to their articles of association in order to ensure purpose is embedded in the company’s strategy and will remain so as the business scales.

Top picture: Dxcover, an Impact First fund investee, uses artificial intelligence to detect cancer early

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