Impact Engine announces $10M fund for social good startups

June 29, 2016

One of Chicago’s niche investment funds announced the close of a $10 million fund this morning designed to make the future of both Chicago and the world a little bit brighter.

Impact Engine’s new fund will see $25,000 to $250,000 investments made in about 25 early-stage, for-profit companies whose technologies aim to make a positive social impact in the world in areas like education, the environment, healthcare, economic empowerment and resource management.

The fund, managed by CEO Jessica Droste Yagan and Chief Investment Officer Tasha Seitz, intends to invest in, support and scale social good companies in and outside of Chicago. 

It's a first for the Midwest, a region with plenty of VC firms but none dedicated specifically to social impact.

"From our earliest days as an accelerator, we have always believed that many big social and environmental challenges in the world are also big market opportunities, and that supporting the most promising early-stage impact entrepreneurs with our time and money is one of the best things we can do to leverage capital for social good," Droste Yagan wrote in a letter to the Impact Engine community on Built In Chicago. 

The fund was raised in a collective effort from the who’s who of Chicago tech, from Pritzker Group’s Matt McCall and Chicago Venture’s Kevin Willer to Grubhub’s Mike Evans, OkCupid’s Sam Yagan and Christian Rudder, Trunk Club’s Brian Spaly, IDP Foundation’s Irene Pritzker, and Jumpstart Ventures’s Shradha Agarwal.

In total, more than 80 limited partners participated in the fund.

The 1871-based organization has previously invested around $700,000 in a score of other startups in the social impact space through its halted accelerator program, including Classroom IQ, Regroup Therapy, Edova, Fletch, ThinkCerca, and DevelopLink.

Current portfolio companies have already cinched $32.4 million in investment and $2.6 million in philanthropic funding. This year, the organization’s portfolio companies swept this year’s Moxie nominations for Best Social Impact Startup, with food donation platform Zero Percent snagging the win.

With those things in mind, it’s safe to say Impact Engine has its finger (and checkbook) on the pulse of a nascent tech vertical in Chicago that’s ripe for prosperity.

“As an accelerator, Impact Engine spent the last three years making disciplined investment decisions with a deep consideration of impact ,” said limited partner and GrubHub co-founder Mike Evans in the statement. “I expect their approach to positively affect the returns of this new investment vehicle, from both a financial perspective as well as a social perspective.”

Funds from the initial investments will be made through 2018, the company said.

Images via Impact Engine/Shutterstock. 

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