Ananda Impact Ventures is a leading impact venture capital fund with a pan-European investment remit, managing four Core Impact Funds with backing from notable institutional and private investors. Pulse 2.0 interviewed Ananda Impact Ventures Co-Founder and Managing Partner Johannes Weber to learn more about the firm.
Johannes Weber’s Background
At the early stages of Weber’s career, he was a hustler-turned-entrepreneur, striving to climb to the top and build a successful company. Weber said:
“I’d achieved this goal by the age of 26 when I sold the business I had founded myself. At that point, I should’ve felt like I’d reached the summit. But once it had happened, I felt at a loss. I needed a new adventure, one that would fulfil and motivate me beyond simply making money. However, it was 2007 and those dreams weren’t necessarily achievable: with the world on the brink of financial collapse, there wasn’t much room for idealistic businesses. Or so I thought. It was when my wife gave me a book about how entrepreneurs were attempting — and succeeding — to solve global ecological and social problems that my desire to make a tangible difference was ignited. I applied my business nous to start an impact venture capital fund, Ananda Impact Ventures, to invest in early-stage companies having a meaningful impact on society and the environment. This determination to do good has framed my approach to life ever since.”
Formation Of Ananda Impact Ventures
How did the idea for Ananda come together? Weber shared:
“I never intended to be a venture capitalist: I started off by addressing the world’s most pressing problems. There were companies out there that solved real ‘needs’ not ‘wants’ — and they were off the radar of traditional VCs. I could have tried to convince traditional VCs to see what I saw in this opportunity, but the more straightforward approach seemed to be to start my own fund.”
“I was always inspired by films like Oceans 11 where a small group of highly skilled people come together to work on one common goal. I believe that venture capital allows for a set-up like this — with a few handfuls of people you can move mountains. And when you apply this logic to impact investing, you get what has become Ananda Impact Ventures.”
Favorite Memory
What has been Weber’s favorite memory working for Ananda so far? Weber reflected:
“As a VC, you are one relevant step away from where the real magic happens — you talk to the founders and they will tell you what great problems they are solving. But whenever I have the chance to dive through the membrane of a start-up we backed, there are fantastic opportunities for learning. I have learned that not only are societal problems complex, they are also intertwined. Education is related to climate change, climate change is related to healthcare, healthcare is related to education and so on.”
“I have learned that we humans tend to generalize and put things into categories. For instance, some might claim that people with autism cannot be great public speakers, but through my work with Auticon, the largest autistic-majority company in the world, I learned the complete opposite. I love the moments when I realize that I don’t know anything about a given topic. Because this is where real learning and understanding starts and you always have to be open to it.”
Challenges Faced
What challenges has Weber faced in building the firm?
“When you’re building a VC firm, there are several assumptions that people will make. For one thing, VCs are known for their interest in short-term projects, making investments that’ll give them quick returns or “write-ups”. The driving force behind Ananda is to solve the world’s most complex environmental and social problems, which by nature can’t be fixed overnight. Issues like climate change have been in the news for decades now, and destroying our world for even longer, so quick injections of cash without long-term commitments and plans are like putting a plaster over a gunshot wound.”
“That’s why, when we invest, we always set specific impact KPIs. This is known as our ‘Impact Carry Model’, and it holds ourselves and our portfolio companies accountable to ambitious but achievable goals that yield measurable, sustainable and impactful results. If the KPIs aren’t hit, no bonuses (or ‘carry’) are given to Ananda. For our companies, their goals are often long-term and take time to complete. Therefore, we deploy what we call ‘patient capital’, a form of investment with a long-term strategy built in that has end goals that go beyond financial profit only and approach problems holistically.“
“Building a VC-backed business at high speed comes at a price too. Many founders struggle with their physical or mental health and this is not talked about much in public. We know, as a VC, that we are part of the problem. Therefore we might also be part of the solution and for years have factored in support for our portfolio’s founders. This involves actively providing holistic support through leadership coaching, HR assessments and resilience training in order to align with founders to stick to their impact visions, avoid mission drift and burnout. The Ananda team is also composed of former entrepreneurs and so we understand the difficulties surrounding fundraising and business strategy, and we want our founders to live the startup life even better than we did.“
Portfolio Information
Could you discuss more about Ananda’s portfolio? Weber explained:
“Ananda has a portfolio of 35 companies which are each working to address four core areas: reducing the negative effects of climate change and globalization, improving healthcare systems, providing access to quality education, and fostering a more equitable humanity. We are aligned with each of our portfolio companies on their technological offering and their wider vision for solving Earth’s problems through targeted impact. To achieve this, we have €200M assets under management (AUM) split across our four different impact funds. Our portfolio is working to tackle the UN’s Sustainable Development Goals, as well as the Planetary Boundaries.”
Significant Milestones
What have been some of Ananda’s most significant milestones? Weber cited:
“This year we completed the full cycle of our first Social Impact Fund, which was both a significant achievement and a crucial milestone in impact investment more broadly. Completing this cycle meant that we had delivered 2x the money-on-invested-capital (MOIC), which was a real endorsement of our mission, showing that impact can be both meaningful and profitable (a rarity in the industry thus far). On the portfolio side, one of the first portfolio companies that we invested in Auticon, is expected to generate €50 million in revenue this year following its merger with Unicus to form the largest autistic majority company in the world. But what also gets me up in the morning is the prospect of scaling a business such as OroraTech, a new space company that aims to monitor and protect the world from forest fires with its second satellite now up in orbit.”
Investment Success Stories
After asking Weber about some investment success stories, he highlighted:
“NatureMetrics, a biodiversity monitoring and assessment startup, raised €14 million in 2022, and online psychotherapy specialists IESO Digital Health raised a $53 million Series B in 2021, to name just a couple. At Ananda, we’re also able to specifically pinpoint the effects of our portfolio companies across their sectors. From Klim‘s incredible growth of over 1100% in hectares of land actively being converted to regenerative agriculture to OneDay‘s empowering of women and people from ethnic minorities (57% of their users) to build and launch their own businesses.”
“More widely, we have so far helped 19 million patients receive better healthcare, created over 4,100 jobs, improved 450,000 school pupils’ learning outcomes, and covered 180M hectares of global forest area with optimized wildfire detection. At a time where news of inequity, climate change, deforestation and wildfires is everywhere, these numbers are both incredible and yet inadequate — we need to continue to be bold in expanding our impact further. Check out Ananda’s latest Impact Report which shows the impact that our portfolio companies are having.”
Total Addressable Market
What total addressable market (TAM) size is Ananda pursuing? Weber assessed:
“The world of impact investing has been steadily growing over the years and has recently experienced rapid expansion. In 2022, the industry reached over $1.16 trillion AUM, according to the Global Impact Investing Network. Unlike other sectors, impact yields result across numerous verticals, including biodiversity and climate solutions, health, education, employment, aging populations, spacetech and sustainable consumption.“
Differentiation From Other Firms
What differentiates Ananda from other firms? Weber affirmed:
“In 2014, we created the Impact Carry Model in collaboration with the European Investment Fund – the first venture capital fund to do so. These legally binding clauses mean that Ananda’s GPs and management do not receive their ‘carry’ (the term for venture capital financial bonuses based on portfolio company financial success) unless the portfolio companies adhere to specific impact-related KPIs and targets. In this way, mission alignment becomes more than just a slogan. Since its inception by Ananda and the EIF, the Impact Carry Model has been adopted by over 80 other funds globally, ensuring that the financial incentives of VCs directly align with impact-related priorities. For further transparency, Ananda additionally mitigates any risk of ‘greenwashing’ itself by publishing a detailed yearly impact report and considers itself an Article 9 Sustainable Finance Disclosure Regulation (SFDR) VC fund.“
“The Ananda team is also unique in its internal composition of former entrepreneurs and business leaders who have a strong understanding of what it means to be a founder, and how the VC-founder relationship works best. It enables us to be a more holistic partner, to see investments in their entirety rather than just input versus output — Ananda has long seen the strain of leading a business on founders and has acted to mitigate this. A study by a doctor at the University of California found that 72% of all founders, for example, experience mental health issues.”
“A few years ago, we established our founder health program to support our portfolio company leaders. It’s crucial to nurture your founders both because they’re integral components of a company and because they are – above all else – human beings. Neglecting to help your founders, even temporarily, can be detrimental to early-stage companies’ success and that’s precisely what you want to avoid. With leadership coaching, HR assessments and resilience training, we’re actively ensuring that our founders are well looked after.”
Future Goals
What are some of Ananda’s future company goals? Weber pointed out:
“Our initial goal was to prove that it is possible to achieve great financial returns while creating a sizable impact and that there does not have to be a trade-off. We believe that we are one of the first ones to have proven it. Now our single new goal is to prove that this is possible at a much larger scale, and doing so in a healthy and sustainable way for the founders and their teams.”
Additional Thoughts
Any other topics to discuss? Weber concluded:
“A topic that is close to my heart, which I actually addressed in my recent TEDx Talk, is the importance of kindness in business. People often perceive the business world as cold, unfeeling and ruthless – which, of course, it can be. Part of Ananda’s core identity is that we’re driven by kindness and compassion to try and solve formidable problems with our planet and societies.“
“Kindness is also such an important metric to keep in mind when you’re dealing with founders – they’re constantly under a lot of pressure, and as an investor, you don’t want to compound that any more. Characterising Ananda based on the principle of kindness worried my team at first, but what we have realised is that kindness in business doesn’t mean losing out, or being walked over. It can give you a unique competitive edge, and can actually transform you and your business. If your heart is in it, your purpose will guide you and you will be far more fulfilled in your personal and professional life.”
