2020 was a year defined by the Covid-19 pandemic, which caused major challenges and new opportunities for many of Ferd Social Entrepreneurs’ portfolio companies.
The 2020 SosEnt Conference was held digitally with a theme of work integration and gaps in CVs.
Lifeness won the Social Entrepreneur of the Year award.
IMAL joined the ‘First steps’ program.
Impact Startup (previously Social StartUp) ran an accelerator program in the autumn on the theme of work integration, as well as its normal accelerator program in spring.
The FSE team returned to full strength (six employees).
Ferd Social Entrepreneurs (FSE) Invests in social entrepreneurs that can demonstrate measurable social results and the realistic potential to become financially self-sustaining in the future, and FSE also works to facilitate their market access. FSE provides these companies with networking, expertise and capital in an active partnership with defined milestones and set social ambitions.
2020 was, unsurprisingly, shaped by Covid-19. Both FSE and its portfolio companies had to change how they worked, and we all had to adapt to new digital ways of collaborating. A number of FSE’s portfolio companies had to furlough staff on either a full-time or part-time basis as a result of the lockdown.
Despite the difficult operating environment, we saw positive progress in the field of social entrepreneurship in 2020.
The social entrepreneurs in the FSE portfolio showed themselves to be robust and solution-oriented, and many succeeded in developing new services or finding digital ways to deliver their services in response to the Covid-19 situation.
The 2020 SosEnt Conference, which attracted 800 participants and was by necessity held digitally, was opened by Prime Minister Erna Solberg, and it helped FSE to highlight the importance of work integration to value creation in Norway.
I 2020 FSE extended and strengthened its collaboration with its innovative portfolio companies. We attached extra importance to supporting our companies both individually and as a group in their work to respond to the Coronavirus pandemic. We were impressed by how the social entrepreneurs in our portfolio supported each other to the best of their ability and eschewed complaining in favour of sharing information and discussing opportunities. We would also like to thank the Schjødt law firm for all the valuable pro bono legal support to FSE’s portfolio companies last year.
At the end of 2020, FSE had 11 companies in its portfolio (Atlas, Auticon, Forskerfabrikken, Gammel Nok, Generasjon M, iMAL, Medarbeiderne, Mestringsguiden, Motitech, No Isolation and Unicus) and one fund investment (SKF Invest).
The Covid-19 restrictions on food service activities unfortunately had a major impact on Mestringsguiden, which had to close down its Injera Palace restaurant concept and its Frodig cafe at Grønland in Oslo. The food stall at Vippa, Aleppo Bahebek, and Inshalla Catering have been transferred to one of its employees. Hopefully, the Covid-19 restrictions will ease as we approach summer in a way that will enable Aleppo Bahebek to start operating normally again, and in the meantime Inshalla Catering is operating a food delivery service. Mestringsguiden unfortunately had to make all its employees redundant. The management and board of directors of Mestringsguiden, with support from its creditors, managed to meet all of the company’s obligations as it closed down, avoiding the need for liquidation proceedings.
In 2020 we increased our ownership interest in Unicus and are now the majority shareholder in the company. Unicus provides high-quality services in software development and testing, quality assurance and data science. The company’s special feature is that all its consultants have an autism spectre disorder (ASD), more commonly known as Asperger’s. The unique characteristics associated with the ASD diagnosis are a competitive advantage for Unicus and its customers, rather than a societal challenge. Unicus now has offices in Norway, Sweden and Finland and more than 60 full-time consultants. Unicus customers include some of the biggest companies in the Nordic region.
Gammel Nok completed a successful funding round in October, with new investor Diakonhjemmet (a charitable foundation with significant operations in healthcare care and education), joining in what promises to be an exciting collaboration to give seniors work opportunities in the health and care sector.
Ferd also participated in the financing round.
2020 was a challenging year for our portfolio companies in terms of reaching out to their customers. Many of them had orders cancelled or projects postponed, which in turn led to much lower revenue. Some companies had to furlough staff on either a full-time or part-time basis. The relaxation of the Norwegian furlough rules and the government’s compensation schemes helped reduce the financial consequences somewhat, and our portfolio companies were proactive and creative in their efforts to develop new products and services and thereby to find alternative sources of income.
The underlying trend of growing interest in investing in companies with a double or triple bottom line continued despite the difficult market conditions. A range of private and institutional investors, as well as a number of foundations, are providing financing for an ever increasing number of distinctive social entrepreneurs. We are pleased to see more competition both in terms of supply and demand, and we note that the market is maturing at a rapid pace. We are convinced that the increased professionalism we see among many social entrepreneurs will create better market opportunities, improve their access to the financing they need, increase the number of sustainable companies and consequently grow their overall social impact.
Following the 2019 SosEnt Conference which focused on social outcomes contracts (SOCs, also known as Social Impact Bonds / SIBs), we see alternative models for financing social impact starting to gain acceptance. The contract between Lier Municipality and Trygg av Natur was met with significant interest, and we are aware that a number of municipalities and service providers are in active discussions regarding possible SOCs. Towards the end of the year a group of municipalities led by Larvik Municipality put a social impact contract out to tender. This contract is based on a national pilot project led by the Norwegian Correctional Service and the Norwegian Labour and Welfare Administration.
In our view, social outcome contracts are a very promising development in terms of generating greater innovation in important areas of welfare, and we hope that these innovative contracts will inspire others to seek to achieve measurable social results when carrying out public procurement activities in future.
The theme of our 2020 SosEnt Conference was work integration. Prime Minister Erna Solberg opened the conference, which had to be held digitally. Through the combination of individual talks and panel discussions, we sought to highlight how important work integration is for value creation in Norway.
Precisely because the conference was held digitally, it attracted more attendees than in previous years. We were pleased with the response, the broad range of attendees and the enthusiasm shown by employees of Ferd and related companies.
FSE, together with Ferd Real Estate, took an ownership stake in the creation of YTE AS in 2020. The aim of this company is to give more people the option to perform in the labour market by connecting real estate companies with social entrepreneurs that deliver goods and services with a main purpose of generating employment.
In 2020 our Impact StartUp accelerator program (set up in 2017 as Social StartUp) was formally established as a separate company, Impact StartUp Norge AS. The company has strong collaboration partners on board, including Wilstar, Klaveness Marine, Sparebankstiftelsen Østfold Akershus, SoCentral, Innovation Norway and Deloitte. The company has entered into a pan-Nordic collaboration with Denmark’s Social Capital Fund, Sweden’s Prosper and Finland’s Arvolitto in order to run an Impact StartUp accelerator program each year in each of the countries with support from Nordic Innovation.
Impact StartUp is a tailor-made accelerator program that helps fledgling entrepreneurs with a double or triple bottom line ambition to become financially sustainable earlier than they would otherwise have achieved. Social entrepreneurs are publicly invited to apply to take part in the Impact StartUp program. 30 are selected to take part in a bootcamp, following which 10 are selected to join a six-month accelerator program. The 10 companies are assigned to an experienced business development professional who works shoulder-to-shoulder with them during the accelerator programme. The participants attend three camps that look in detail at topics including commercial operations, organisational development, sales and impact management.
Impact StartUp ran two accelerator programs in Norway in 2020. The autumn program was specifically for entrepreneurs tackling work integration challenges, while the spring accelerator was open to all social entrepreneurs regardless of their focus. The majority of activities necessarily had to be completed digitally.
In 2020 the FSE team had seven employees in six full-time positions, with one person on a temporary contract providing cover for a permanent employee. A new employee joined in April, and one employee returned from parental leave after the summer, meaning the team was at full strength from the second half of the year.
Our expectation is that 2021 will be another demanding year for many social businesses, and we are continuing to support the social entrepreneurs in FSE’s portfolio individually and as a group. We hope that they will be able to resume their full range of activities and will be well placed to strengthen their social value creation and to grow financially as the coronavirus pandemic dissipates.
We believe that the public sector will enter into more social outcomes contracts in the near future. We want to actively contribute to progress in this area, and we also want to help develop the expertise and capacity that other investors have in relation to this type of financing. We will intensify our work on impact management processes at the companies with which we are involved, and in so doing we will help to highlight the relationship between their activities, measurable social results, enduring change, and social impact.
In 2020 we saw the digitalisation of society accelerate rapidly, and this trend is expected to continue with undiminished strength in 2021. Many of the social entrepreneurs in the FSE portfolio need to make some major changes to their business models or service deliveries in order to adapt. We will support them in making this transition.
It is increasingly recognised that social entrepreneurs represent an important force for innovation within the welfare state. With the aim of contributing to the identification of good solutions to problems that the public sector will be better able to solve by collaborating with others, we will continue our work to inspire both the public and private sector to use innovative procurement activities and collaborations that cut across traditional structures in order to choose solutions that provide a documented social impact.