For the fourth year in a row, venture capital (VC) investment into global impact startups is in decline. Impact startups have
raised $33B in 2024 so far, a projected 28% drop from the previous year. A much stronger drop than the general global VC capital decline of 4% during the same period. This alarming fact is the main takeaway from the State of Impact 2024 report, presented this week in The Hague at ImpactFest by ImpactCity, Dealroom, and Microsoft.
This steady decline in impact investments is especially worrying since none of the 17 Sustainable Development Goals as formulated by the United Nations (UN) is on track to be achieved by 2030. This should be a concern in the run-up to the UN
Climate Change Conference in Azerbaijan.
Europe and the Netherlands
Although ‘impact’ as an industry still takes third place by VC funding, after enterprise software and health, the decline of 28% from 2023 is much steeper than the average global drop of 4%. Europe and the US are the leaders in funding impact, and they
are almost on par. Europe is the region with the highest share of impact funding with 28% of investment going to impact. With 25% of its investment going to impact, The Netherlands also demonstrates a concentration of impact in line with that of Europe
and much higher than other major continents.
Working towards solutions
The State of Impact 2024 report was presented at ImpactFest, a leading impact event in Europe, where impact makers, entrepreneurs, investors, and policymakers work to create solutions for a better world. At ImpactFest, new impact funds are
announced, investors present themselves to entrepreneurs, and many impact makers are awarded for their innovative solutions. Coos Santing, Manager Economic Affairs & Innovation at the Municipality of The Hague: “Despite the declining VC funding in impact, we luckily see large amounts raised in alternative ways. And the impact industry is still raising more VC than in pre-pandemic years. At the same time, impact companies are in dire need of new impulses and that’s exactly what we’re creating here at ImpactFest. If we don’t take action now, our Agenda for Sustainable Development Goals will slip out of reach.”
