5 Upcoming Trends in the Impactech Sector Startups in the space are leveraging technology to make the world a better place and tackle issues such as climate change, inequality, poverty, healthcare, education, and more
By S Shanthi
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Impactech startups are businesses that use responsible technology for the betterment of the world. Unlike the past, when organizations with social causes were mostly non-profit, today's startups have a proven path to profitability along with being impactech. These companies typically leverage technology and innovation to tackle diverse global challenges and contribute to the realization of sustainable development goals and help create a positive impact on the world.
These companies not only reach their social or environmental goals but achieve financial success as well. They leverage technology to make the world a better place and tackle issues such as climate change, inequality, poverty, healthcare, education, and more.
The space is evolving by the day, so much so that we today see many unique trends cropping up.
Change in mindset
The COVID-19 impact and the global economic downturn have reinforced the view that sustainability is key to success in any sphere of life. This has encouraged consumers to go for businesses with a social cause. Added to that, the convergence of profitability and social impact has led to a change in mindset. Today, we not only see non-profit organizations in the space, but we also see startups venturing into it. "The biggest trend which is seen in the impactech sector is that corporate and government have now together started their focus on this sector and it's no more a sector of non-profit," said Milan Sharma, founder and CEO, 35North Ventures.
Impetus from investors
This change of mindset has led to a deluge of capital flow across this sector and this is growing every day. "With ESG and climate financing swiftly gaining traction in PE-VC circles, impactech startups will receive a significant impetus. Impact startups, armed with cutting-edge technology, show the potential for rapid expansion," said Abhimanyu Bisht, general partner, CapFort Ventures.
Use of advanced technologies
The most unique trend these days in the impactech startup sector boils down to artificial intelligence and machine learning. "Impact tech startups are harnessing the power of artificial intelligence and machine learning to process large datasets and extract valuable insights. By using AI-driven impact analytics, these startups can better achieve social and environmental outcomes, as the use of artificial intelligence and machine learning leads to improved decision-making and more efficient resource allocation," said Bisht.
Boosting circular economy
According to a joint report by India Cellular & Electronics Association (ICEA) and Accenture, circular business models can unlock revenue potential of $7 billion by 2035. "The projected market size for these circular models is valued at $13 billion by 2035. Yet, the total addressable market, achievable through the public and private partnerships, increases to $20 billion, revealing an untapped potential of 35%," the report said.
Access to public capital
Along with increased interest from institutional investors, we are seeing a lot of interest coming from financial institutions as well. They are reimagining lending to businesses with a social cause. There is an increased realization among banks that seizing the opportunity will help them create an impact which will also lead to value creation.
