The social entrepreneurial ecosystem in Amsterdam is growing. With concrete deals being brokered between impact investors and entrepreneurs, this emerging sector, which expertly combines idealism with pragmatism, is becoming serious business.
Originally published in AMS Business Magazine
Doing business while doing good is here to stay: ‘What is most valuable about social enterprises is that they dynamically blend social responsibility with business opportunities,’ says Tatiana Glad, cofounder and director of Impact Hub Amsterdam – part of the Impact Hub network with more than 16,000 members in over 100 cities worldwide – and member of the Impact Hub Association’s Global Board. And in the Netherlands there are more than 5,000 enterprises adding societal value through profitable products and services. In just five years – between 2010 and 2015 – the annual turnover of the Dutch impact entrepreneurship sector grew by 70% to €3.5 billion and created more than 25,000 jobs, according to McKinsey study Scaling the impact of the social enterprise sector (2016).
In this remarkable growth story, the collaboration between Impact Hub and the City of Amsterdam plays a key role. ‘As the municipality, we want to be an ambassador for social entrepreneurship. We have invested time and money to bring together impact entrepreneurs and larger companies, who increasingly see these entrepreneurs as innovation partners, as well responsible suppliers who can amplify the positive impact of committed corporates,’ says Ellen Oetelmans, from the City of Amsterdam’s Department of Economic Affairs, who leads the municipality’s pioneering Amsterdam Impact Programme.
A PIONEERING PLAN TO GROW IMPACT ENTREPRENEURSHIP
‘Amsterdam was the first city in the Netherlands to develop a concrete action plan to stimulate social entrepreneurship,’ says Oetelmans of the Amsterdam Impact programme. With its first phase running from 2015 to 2018, this programme saw strong support from all parties in the City council, including Kajsa Ollongren in her previous role as Amsterdam’s Deputy Mayor and City Councillor for Economic Affairs. ‘The City’s government recognised the economic benefits of social entrepreneurship and believed that its development would make Amsterdam an even more appealing place to live and work,’ Oetelmans explains. ‘Many of our 400 impact-driven member entrepreneurs have ideas to make their own city healthier and more liveable but don’t know where to start. When Ellen came along, we had a sense of the municipality’s doors being opened to us,’ adds Glad, who has brought Impact Hub’s experience to the City’s Amsterdam Impact programme over the past two years.
‘Building an ecosystem comes naturally to us, as an international network,’ Glad says. Founded in 2008, Impact Hub Amsterdam has since helped more than 1,000 entrepreneurs to start, grow and scale their impact business. From its collaborative working space at KIT Royal Tropical Institute, Impact Hub Amsterdam organises events focused on sharing knowledge and fuelling impact – including pitch battles, hackathons and partner coproductions. It runs a series of acceleration programmes and entrepreneurial support services with access to relevant business expertise, resources and capital. ‘Impact Hub is one of the field’s pioneers. Given its local and global track record, we are delighted that the Impact Hub team – and community – contributed their expertise to the development of a pragmatic programme to make Amsterdam the place to be for impact entrepreneurship,’ says Oetelmans. ‘In close collaboration with Impact Hub and other partners, such as the Amsterdam Economic Board, Social Enterprise NL and Amsterdam’s universities, we started mapping the foundations on which to build a stronger ecosystem of entrepreneurs and intrapreneurs, investors, SMEs, corporates and other players committed to solving Amsterdam’s most pressing challenges,’ says Oetelmans.
BUILDING A CITY ECOSYSTEM FOR GLOBALLY SCALABLE SOLUTIONS
‘Amsterdam is a compact living lab. When you have the necessary conditions to experiment, you see solutions emerge much faster,’ Oetelmans explains. ‘That’s the advantage of a smaller, creative city with an enduring legacy of balancing economic success with citizen wellbeing. With its renowned design-thinkers and innovative engineers, Amsterdam offers many opportunities to create solutions that can also accelerate change in other cities,’ says Glad. One of the Amsterdam Impact programme’s six goals is to offer a range of business development tools that impact entrepreneurs can use to boost their ability to create translocal solutions. Enter the Amsterdam City Fellowship acceleration programme for urban health solutions, which ran between May and December 2017 and saw nine entrepreneurs develop their products and services with expert guidance and mentoring from Impact Hub and the City of Amsterdam’s extensive networks. After a business model building phase, three enterprises – VraagApp, Start met Happen and Rain(a)way – were selected to further collaborate with the municipality. For VraagApp this deeper collaboration led to a municipality pilot for 400 people who receive support under the Social Support Act, as well as clients of the City’s Work, Participation and Income department.
Another of Amsterdam Impact’s goals is to increase the profits of social enterprises by making it easier for municipal and corporate buyers to purchase impactdriven products and services. To this end, Amsterdam Impact organised four matchmaking events in 2016 and 2017 together with Buy Social, a platform for responsible purchasing powered by Social Enterprise NL, the Dutch national trade association for social entrepreneurs, and Social Impact Factory in Utrecht. These four events saw 47 social enterprises pitch to 60 different parties and resulted in 13 deals, including that between Swink, a digital agency employing people with autism, and Big 4 firm PwC.
CREATING DEAL FLOWS AND ENABLING ACCESS TO CAPITAL
With so much innovation and opportunity on the horizon, what’s needed now? ‘Together with Impact Hub and other partners, the City of Amsterdam is building an integrated capital network to bring together the city’s purpose-driven investors, funds and banks and to help more impact enterprises access financing,’ says Oetelmans. In 2016 and 2017, Impact Hub and the municipality hosted three Integrated Capital Labs where impact enterprises Heroes & Friends, Makers Unite and Waste Transformers received investment advice and valuable connections after a deep dive with diverse financiers. As a complement to the Integrated Capital Labs, Impact Hub’s curated network of impact investors are offered various opportunities to engage in the scaling of innovative interventions: circular solutions, for example, through a partnership with ING Netherlands Foundation in a multiyear Investment Ready programme. Investment-ready entrepreneurs have already raised a total of more than €8.5 million in funding from this network of investors. ‘The Amsterdam Impact programmatic approach gave us a framework to see where collaboration between our community and the city makes sense. After all, we have a shared goal to make our city a better place. Given the state of the world, the need for entrepreneurial solutions to scale is growing, and while it sounds easy to work crosssector, it is indeed a learning journey. The proof of how serious we are is in the deal flow,’ affirms Glad.
Impact Hub – innovating for good with global partnerships
In 2018, Impact Hub Amsterdam celebrates a decade of collaborating with international corporate, governmental and non-profit partners on making change happen across multiple sectors. Among its recent partnerships are deals to scout the world’s best entrepreneurs for the Postcode Lottery Green Challenge – the largest global competition for solutions to combat climate change – and Tommy Hilfiger’s Social Innovation Challenge, a global programme for entrepreneurs who work on a more inclusive fashion value chain. Impact Hub, together with WWF, also codeveloped the Plastic-Free Ocean Accelerator for startups with innovative solutions to prevent plastic leakage into the ocean and reduce plastic waste worldwide. And together with Meta Group, EBN and the Impact Hub network across Europe, Impact Hub Amsterdam is hosting the EU Social Challenges online innovation platform, which boosts marketable solutions by matching ‘challenge owners’ – organisations with problems to solve – to entrepreneurs and social innovators.
Exporting the Amsterdam Impact ecosystem success story
In 2017, the Amsterdam Impact programme joined the Netherlands Consulate General in San Francisco, Enviu, Social Enterprise NL and Social Impact Ventures NL to help organise the first Dutch social innovation mission at SOCAP (short for Social Capital Markets). This San Francisco-based event is the world’s leading conference for increasing the flow of capital towards social good. Here, Amsterdam Impact shared insights from its approach to building a vibrant social entrepreneurship ecosystem together with partners such as Impact Hub. ‘We believe that only through sharing and collective learning can we create the global cities of tomorrow,’ says Ellen Oetelmans, Amsterdam Impact’s Programme Manager. In addition, 12 outstanding Dutch impact enterprises – including seven of Amsterdam’s homegrown ventures – were invited to attend SOCAP and connect to major international players. And this worked: two enterprises secured funding, including a seven-figure investment, and all participants made connections valuable for scaling to the US market.