This paper, part of a longer series, explores one of four business segments, or quadrants, that we use to pinpoint attractive trends and companies across traditionally broad-based impact investment themes.
Supporting essential services is good business
Think back to 2020 when "essential workers" and "frontline workers" were needed for local economies and society at large to function throughout the pandemic. What we all learned from that experience was that there are some services which are economically essential, and which cannot be substituted. We call these mission-critical services.
While their business focuses may vary, private companies building mission-critical services often specialize in applying new technology in transformative ways. They tend to create new solutions that did not previously exist or improve upon existing impactful businesses with new technology. In many cases, private capital is needed to help these companies scale and drive a bigger impact. We've seen success investing in mission-critical services because of ever-present demand.
Medical technology that delivers mission-critical services
For example, Retina Consultants of America (RCA) delivers critical medical technology that can stave off blindness for decades, something that would not have been possible 5-10 years ago, thanks in part to private capital. How does this service work and what did private capital do to expand its reach?
Retinal examinations tell doctors more about the body than just eye health. New and improved technologies can help ophthalmologists more fully examine eye health to extend the utility of preventative care and treat patients more holistically. But healthcare technology is expensive.
With additional capital, RCA's research arm has been able to improve the patient experience by expanding its set of healthcare solutions, including innovative genetic therapies that can potentially reverse blinding disorders and new, longer-lasting therapeutics that limit repeat in-office visits. These innovations can enhance overall patient care and deliver differentiated, long-term solutions to common health and wellness challenges. Supporting them is good business.
Private capital can empower innovation across vital industries
RCA's medical solution supports community development by helping vision-challenged people get back into the workforce and improve their local communities. What would ordinarily fit into one impact-oriented theme (e.g., health and wellness) we see as an investable opportunity within a business segment that covers both health and wellness and community development.
Health is easy to relate to and relevant to everyone, which makes innovative solutions highly investable. Companies that provide mission-critical services in traditionally themed investment domains like health and wellness can support other vital industries at the same time.
This framing enables investors to identify other areas where they can make an impact and strategically construct their portfolios with allocations to companies that fulfill their unique solution and mission-driven investment goals.
Driving impact for companies and investors
Supporting mission-critical services across vital industries can help diversify investors' portfolios by enabling companies to expand their research and drive more impactful solutions. In the long run, we believe that funding companies focused on mission-critical services can benefit investors and portfolio companies alike.
Continue reading about the four business segments that we use to pinpoint attractive trends and companies across traditionally broad-based impact investment themes linked below.