Roots of Impact secures seven-figure financing

Roots of Impact receives seven-figure financing from bmh and other investors to further expand its innovative impact-linked finance platform and develop international markets

Wiesbaden / Frankfurt, June 25, 2024 - bmh Beteiligungs-Managementgesellschaft Hessen mbH, together with the two funds Hessen Kapital I and MBGH Mittelständische Beteiligungsgesellschaft Hessen, has participated as a co-investor in a financing round of Roots of Impact GmbH. The Frankfurt-based company is a sought-after expert and pioneer in impact-linked finance. The funds from this financing round will be used to build the necessary infrastructure to further scale its own offerings.

What is impact-linked finance?

Roots of Impact GmbH from Frankfurt is the international market leader in the field of impact-linked finance (ILF), a special form of results-based finance (RBF) that focuses on financing social innovations and companies with an explicit focus on measuring and rewarding measurable social impact. ILF instruments link the financial conditions, such as interest or repayment, to the achievement of predefined impact targets. The better the financed company achieves a positive impact, the lower the financing costs. ILF is therefore an extremely effective method of reconciling positive social impact with economic sustainability.

Instead of increasing our own share, we want to significantly increase the size of the pie. ILF has proven that it works and is now gaining ground.

Björn Strüwer, Founder and Co-CEO Roots of Impact GmbH

Background and future plans

Roots of Impact was founded in 2015 by Björn Strüwer. The company works with public funders and impact investors from around the world to design innovative impact-linked finance solutions. Among other things, Roots of Impact has set up its own impact-linked finance fund. In future, other companies and institutions will be supported in implementing ILF transactions as simply and efficiently as possible. To this end, a digital ILF platform and a "community of practice" will be created to offer training and targeted resources for practitioners.

Investors and supporters

Roots of Impact is driving the ILF movement forward with innovative financial instruments such as Social Impact Incentives (SIINC). This creates measurable, positive impact on society by financially incentivizing the achievement of positive social and environmental impact.

Barbara Spitzenberg, responsible Investment Manager at bmh

In addition to bmh Beteiligungs-Managementgesellschaft Hessen mbH, the Delta Fund, the European Social Innovation and Impact Fund (ESIIF) and the Swiss Agency for Development and Cooperation (SDC) are also participating in the seven-figure financing round for Roots of Impact GmbH. Roots of Impact was supported in the transaction by the Financing Agency for Social Entrepreneurship (FASE). Similar to other ILF financings, a large part of the financing round is directly linked to certain result indicators and thus offers the company improved conditions for better social impact of its own activities.