Impact Unicorns

Impact Unicorns

Welcome to the Breakdown, a new series where we’ll explain terms and concepts in the emerging impact space.

October 27, 2016

What’s an impact unicorn?

Impact unicorns are companies that generate strong financial returns while also addressing a problem for society or the environment. Impact unicorns thrive specifically because they create impact, not despite it.

So?

Impact unicorns challenge the notion that businesses must sacrifice making money in order to contribute to the environment or society in a positive way. Investors often see a split between firms that maximize profits with little to no impact and firms that maximize impact by earning below-market rate returns. An impact unicorn maximizes both. Inspired by this rare (and awesome) creature, entrepreneurs are applying market based solutions to some of the world’s greatest challenges — giving investors an opportunity to put dollars where their values lie.

Unicorns in the wild…

M-Pesa, a mobile banking company in Kenya became an impact unicorn by creating a technology that lets African consumers transfer money affordably.

Growing 50% year-on-year since 2004, the South African firm AllLife proves it’s possible to provide affordable life insurance to people living with HIV and be profitable. The firm has a built-in incentive to promote the health of their policyholders, and as a result, clients improve their CD4 Count (an indicator of immune system strength) an average of 15% within six months of becoming a customer.

Mind. Blown.

The term impact unicorn was first coined by Fran Seagull of Impact Assets. It adapts the term “unicorn,” which now describes startups that are valued at $1 billion or more.

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