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.
It’s practically a cliche to say that there is more data and information technology today than at any point in history. The Information Age that we live in allows for data to be accessed from anywhere at practically anytime. Data is no longer just a nice to have; it’s a critical input to help businesses operate more efficiently and for consumers to get the most out of business services, as well as drive positive change on the world around us.
We see this trend not only in how data and technology support impact companies' product development but also in how they inform our investment decisions as a firm. Data analytics and information technology make software solutions and services sticky. More data informs better, more efficient processes to help companies scale. Managers like that (and their investors do, too).
Better, faster, more impactful
Some of the most successful impact companies specialize in software, information and data analytics services. For many, private capital has helped grow their businesses and make a bigger impact. More broadly, business models are using data and information in new ways to rethink legacy problems, largely predicated on tracking, monitoring and utilizing data to deliver enhanced products and services.
For example, software companies like Benevity have made an impact by securely delivering capital to philanthropic organizations worldwide. With this Software-as-a-Service (SaaS), volunteering, employee engagement, philanthropic giving and affinity group development are modular and scalable digital offerings, enabling organizations to become more efficient by using just one platform and adding relevant components as needed.
Powered by data analytics and information technology, this SaaS company solves a business need (e.g., the local creation and coordination of global corporate impact initiatives) and makes money by modernizing the process. Its impact comes from applying a profitable SaaS model to a philanthropic cause. And impact outcomes can be tracked in capital delivered to organizations that range from homeless shelters to food banks to orphanages and community medical resources.
Technological optimization, head to toe
Another example of data-driven impact can be seen in the behavioral health company, Neuroflow. Globally, there is a data disconnect between payors, providers and government programs, which makes behavioral risk factors difficult to predict and incorporate into budgets.
Neuroflow developed a solution that uses existing health program data to improve population risk management and deliver evidence-based outcomes. By leveraging existing health data from medical delivery systems, care management programs and disability programs, the company can identify behavioral health risks to reduce the total cost of care and ultimately improve both the patient and provider experience.
Through software, information and data analytics solutions like Neuroflow, investors have an opportunity to maximize their impact and bottom lines. And private capital has an opportunity to provide a runway for companies like this one to scale their technology platforms and sales teams, make new business introductions and facilitate strategic partnerships with relevant customers. All informed by data.
Unlocking new private markets insights
This is why we believe that data is the new grease (err... lifeblood), which will help power the engine of impact investing. Synthesizing private markets data on both sides of investment opportunities – to account for portfolio companies' financial and non-financial metrics – can provide previously inaccessible insights and lead to better, more impactful outcomes.
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.