UN SDGs, IRIS, GRI and more. There are many “standardized” impact metrics because it’s hard to capture impact in easily quantified numbers.
We respect many of our colleagues who explicitly aim for a double-bottom line, but our belief is that inherently conflicts do emerge between social and financial return if you constantly have to trade-off between the two.
We avoid this trap by targeting the right sectors at the start—like climate change, rising chronic disease, and labor shortages (caused by demographic trends), which will vastly improve human life and flourishing if properly addressed. They are also, not coincidentally, are the largest market opportunities on Earth.
We believe that if we can scale solutions in these areas, maximizing financial return, we inherently maximize the scale of impact our investments can have.
In this way, we can both have incredible impact, but unapologetically focus on high returns for our investors.
It’s a matter of starting in the right place.
Below, we discuss case studies of our companies. Ultimately, we will likely include our entire portfolio—because every single company directly targets what we see as the gravest problems for humanity.
Rising Healthcare Costs
Across the entire world, healthcare costs relative to GDP are rising. An aging population combined and exacerbated by increasing rates of chronic and metabolic disease have put unsustainable strains on the healthcare system.
Something has to give—quality of care, equity of access, or our standard of living in every other aspect of life. That is, unless we find technologies that can change the paradigm of healthcare and fundamental bend the trajectory of the inexorable rise in costs.
Point-of-care is the underinvested frontline of healthcare system. We need new diagnostic technologies to help cope with chronic diseases that will eventually manifest acute symptoms.
Exo has created an ultrasound that is portable and cheap enough to put in the hands of every clinician.
Global Labor Shortages
It has become fashionable for politicians to discuss how automation and “robots” could take everyone’s job. In reality, we are decades into a fundamental shift in demographics—in part driven by our aging population that has created a rapidly increasing dependency ratio of elderly individuals relative to young workers.
This trend has created unexpected outcomes when paired with stagnating productivity growth. Ironically, we have labor shortages due to simple lack of bodies, but inability (due to low productivity) for many businesses to economically sustain paying more. As such, we have stagnant wages in most developed countries, rising labor shortages across the world, and rising levels of business consolidation (in order to deal with some of the impacts).
In the current environment, automation is much more likely to increase wages and employment. While this may not apply to every case of automation, it certainly has been what we’ve seen in our investments.
Dishwashing in food services is a job that is notorious brutal, lowly paid, and without significant advancement prospects. Unsurprisingly, it has incredible turnover and absenteeism.
However, without clean dishes (and containers), restaurants cannot turn tables and serve customers at all. Dishcraft creates dishwashing robots that helps bring a bit more humanity into the food services industry.
Whatever your political affiliation, it is undeniable that climate change is here. Extreme weather events, rapid shifts in moisture vapor pressure, rising sea levels, and thousands of other more or less impactful changes have swept across the world.
We invest in companies that either will aid the transition of our power grid and transportation networks, or companies that help us cope with the impacts of climate change that have already arrived.
For many people, climate change is a grave threat on the horizon but many of the effects are far away or in the future. Farmers don’t have that luxury and have been experiencing the devastating impacts of more and more extreme weather events—freak hurricanes, tornados, cold snaps, choking dust storms, or more—for years.
PlanetWatchers allows crop insurers to use satellite-based SAR images to quickly assess damage and compensate farmers—helping them get back on their feet more rapidly.