The rebel investors out to make a difference – not just a profit

The impact of technology on 21st century life has far outstripped the imaginations of sci fi writers. Although we may not have flying cars or buses to Mars (yet), the way we use mobile technology and the internet to connect, interact and share has been just as transformative to the way we live.

But are we making it count?

The internet was supposed to make us smarter, yet fake news often outperforms real news. Social media was supposed to bring us together, yet frequently it does the opposite. We keep hearing how tech is “democratising” our world, even as it channels more wealth into the hands of a few. Can’t we do better?

This question was weighing on the mind of Paul Miller, who in the mid 2000s was working for a London think tank, writing reports about how tech could help address our biggest social and environmental challenges. At the same time, Miller had noticed how much easier it was getting to actually start a tech business. “There was a point where I realised that for the same project costs that we were talking about, you could start a company that might actually do something practical, rather than just writing about it,” he says. So he did.

The business that Miller started (and later sold) was the School of Everything, which connects learners with educators online. At the same time he got involved in running weekend innovation camps designed to bring together tech experts and people with ideas for fixing social and environmental problems. Not only had he learned what it was like to start a business, he’d also seen how many other talented people were ready to do it, if only they had the money.

So Miller set up an investment fund. In 2012 he managed to raise £100,000 from the UK’s innovation agency Nesta, to invest in six startups. The teams came together in a shared space in Bethnal Green, East London, an area buzzing with coders, creatives and coffee shops, and just two Tube stops from the city’s financial district. Bethnal Green Ventures was born, with Miller at the helm, soon joined by Melanie Hayes as managing partner.

Those first six investees each got £15,000 (€18,000), which Miller describes as “enough to try something out but not enough to waste”. Two of them – the sustainable smartphone maker Fairphone and the digital healthcare platform DrDoctor – have gone on to become multimillion-pound concerns.

A community harnessing tech for good

Today, Bethnal Green Ventures is part of a community with a name: tech for good. And it’s growing fast. By one estimate, investments in the London-based tech for good scene have increased 800% in the last five years. So far it has invested a total of £5.5 million (€6.4 million) in 143 startups working for a fairer, healthier, more sustainable world. The majority of those are still going, and two have been successfully sold.

Fairphone, one of the fund’s first batch of startups, makes the world’s first ethically and sustainably produced smartphone – taking into account everything from avoiding conflict minerals to factory workers rights and circular economy principles. The award-winning business has grown further through crowdfunding from its community, and has sold hundreds of thousands of phones. Just as important for Bethnal Green Ventures are the ripples that Fairphone’s success sends through the industry. “We know that they have been talked about at board level in the big consumer electronics companies,” says Miller.

Some innovations backed by the fund have come into their own during the pandemic. Organise is a workplace campaigning tool, making it easy for employees to set up petitions, surveys and open letters to demand change from employers or from the government. It has helped low-paid delivery and warehouse workers push for better conditions and proper protective equipment.

Other startups in the firm’s portfolio include TalkLife, a peer support network for young people to help each other with personal problems, and Chatterbox, which helps refugees become language coaches.

The impact made by these businesses has to be “intentional and measurable” Miller says. In other words, they’re not just making an impact as a side benefit, it’s what they’re here for, and they have to be able to prove it through proper impact measurement, and ideally external validation through programmes such as B Corp.

This approach has helped make Bethnal Green Ventures a safe enough bet that it has now been bought up by Connected Asset Management, an impact-focused investment manager that works on behalf of pension funds. Meanwhile Miller has been honoured by the Queen for his work supporting startups.

A new kind of tech founder

The sums of money that Bethnal Green Ventures puts into companies are in the five to six-figure range – amounts that many budding founders could probably raise with a few well-placed phone calls. Many, but not all. “What we’re trying to do is make sure that if you don’t have the friends and family that are able to give you a few tens of thousands of pounds to try something out, then we’re able to do that,” says Miller. “We’re very much trying to democratise this kind of entrepreneurship and make it available to other people.”

The startup teams are notable for their diversity. More than a third of the fund’s investee founders are from minority ethnic backgrounds, and four out of ten are women. Career backgrounds are diverse too, including former nurses and social workers. After all, the challenges that tech for good seeks to address are not always the kinds of things you learn about at an Ivy League business school.

This diversity is part of Bethnal Green Ventures’ mission, says Miller. “We’re very deliberately trying to break the mould of what a tech founder looks like. I just don’t think it’s been healthy over the last couple of decades, this idea that only white men in their 20s can start these kinds of companies. Your educational or economic background has been a big part of the reason why there hasn’t been much diversity in the tech sector, and hopefully we can start to break that down.”

Now they’re getting noticed

The big names in investing are paying attention to the rise of tech for good, Miller believes. “Our companies, it turns out, are very attractive to good employees because they’ve got a real purpose. Investors have spotted that the most talented people in the tech world are moving over to mission-led startups, and that’s obviously going to affect them.”

For investors, having a mission is also a great differentiator: something the competition can’t easily steal. “It’s very hard to fake a true mission,” says Miller. “Customers sniff it out. Employees sniff it out. So actually, by being the most mission-led or impactful company in a sector I think you can be the most successful. We’ve certainly noticed some of the big names of venture investing starting to talk more of a good game when it comes to impact. Whether they’re actually doing it or not, I couldn’t tell you.”

But if they’re not doing it, they might want to think about starting. “I think the companies at the top of the stock market in 10 years will be able to tell you what their mission is – not just what their business is,” says Miller. “We’re trying to back those companies on their way up.”