Fredericton has long been a hub of social innovation, and now a trio of female entrepreneurs hope the city will become a centre for measuring impact investing.
R I D D L, a finalist for the New Brunswick Innovation Foundation’s Breakthru competition, is the brainchild of Jenelle Sobey, Vanessa Paesani, and Jess Peters, who have a background in business and social ventures.
The company has developed a platform that will help impact investors assess the social or environmental effects of their investments. It has also arranged pilot tests with impact investment houses in Amsterdam, New York and Atlanta, which will help prepare the platform for a general launch. The three co-founders believe there’s a market in assisting investors who are curious about solving problems, so they called their company a name that sounds like "riddle".
“A new breed of investor is emerging, one who is more interested in solving a real-world problem than they are in financial returns,” said Sobey. “They are curious about solving a riddle. R I D D L represents the puzzle impact investors are interested in cracking.”
Impact investing is the growing practice of backing a company, not just for financial return, but because the company is trying to cure a severe problem – whether it’s global warming, childhood illiteracy or cancer.
Assessing a financial return in an unlisted company can be difficult enough, but impact investors also want to know that their money is really helping to improve the world. What R I D D L does is help investors and their portfolio companies assess how much of a difference they’re actually making. For example, if a company aims to end childhood illiteracy, the platform can track how many books the children using the site are acquiring. That would be one of many measures of success for the company.
“Our customers are the impact investors but also the organizations that they invest in,” said Sobey in an interview. “They could be for-profit or non-profit. If they want to move the dial on a problem, they have to be able to measure the work they’re doing.”
The R I D D L team is now working with its early adopters on finding out how the platform works and making improvements. These funds back 500 social ventures between them, and by the end of the year all of these companies (and their data) will be on the platform. Each time a fund becomes a full customer of R I D D L, it brings a host of portfolio companies that also become clients.
The team is developing a composite score that will assess both the financial and social performance of a company or non-profit. As well as impact investors, R I D D L sees a target market in the corporate social responsibility divisions of large companies, wealth management firms, foundations and government.
The team is now setting out to raise $1.2 million in equity investment – a task that would get a boost if it’s one of the winners of Breakthru on Thursday night.
Sobey is best known as Managing Partner of Dartmouth-based web development company Code + Mortar, but she previously worked with the Pond-Deshpande Centre, the University of New Brunswick group that specializes in social innovation. Paesani once headed the Gaia Project, a New Brunswick group that helps young people understand the impact of energy on the environment. And Peters brings more than a decade of tech sales experience to the team.
Now they want to grow R I D D L so it becomes a new pillar in the proud tradition of social innovation in New Brunswick.
“In Fredericton, there is a culture of social innovation that I would say . . . [developed] before the Pond-Deshpande Centre opened and it has continued on,” said Sobey. “It has gained momentum.”