Summary

Ferd Social Entrepreneurs (FSE) invests in social entrepreneurs who can demonstrate measurable social outcomes and the potential for future economic sustainability. We also work to reinforce the market presence of these social ventures. FSE provides support through networking, expertise, and capital to companies through an active partnership with clear milestones and social ambitions.

The past year has seen significant volatility, with high interest rates and inflation among the many contributing factors. The social entrepreneurs have been required to navigate these challenging economic conditions, leading some to make strategic changes. 

We continued to strengthen our collaboration with our innovative portfolio companies, placing extra emphasis on close follow-up and leveraging synergies across the portfolio. However, the strained economic situation has also impacted municipal finances, indicating a more challenging public market ahead. We are impressed by how the social entrepreneurs support each other, sharing information, and identifying opportunities for collaboration. 

FSE has many valuable partners who have been instrumental to our companies and significant supporters of ours. In 2023, the law firm Schjødt provided legal support on a pro bono basis, an assistance that has been of pivotal importance considering the market situation we faced. Sopra Steria enhanced our companies’ expertise by offering both pro bono hours and professional training across various topics. McKinsey contributed invaluable strategic development work that proved beneficial for one of our portfolio companies and FSE alike. Moreover, PA Consulting also provided pro bono assistance to one of our companies on a project focused on technology and strategy. 

By the end of 2023, FSE had 11 companies in its portfolio, three fund investments, and three active social impact bonds. In 2023, FSE invested in Mikrofonden, Get Academy, and KLAR Kompetanse, as well as making additional investments in Gammel Nok, auticon and Ludenso. 

Market situation

The economy in Norway tightened in 2023, affecting both private households and public entities. There is now heightened awareness of the increased costs faced by many municipalities, particularly in the elderly care sector. This underscores the need for innovative solutions, yet simultaneously constrains the capacity to invest in them. Nevertheless, there are factors that strengthen the position of social entrepreneurs and investors. This is particularly true due to the global commitment to sustainability and efforts to achieve the UN’s Sustainable Development Goals (SDGs) and the objectives of the Paris Agreement. Over half of the 17 SDGs are focused on social issues, and there is a growing emphasis on addressing these challenges. The EU reports an allocation of several hundred million euro for investments in social funds and is working to integrate this dimension into the new Taxonomy. 

The underlying trend is thus an increased interest in investments that deliver both a financial return and a positive social impact, often referred to as the double and triple bottom line, even amid challenging market conditions. A growing number of private and institutional investors, as well as foundations, are providing financing to a rising number of social entrepreneurs. We are pleased with increased competition in terms of both the supply and demand sides of the equation and acknowledge that the market is rapidly maturing. We are reinforced in our belief that the professionalisation of social entrepreneurs will lead to improved market conditions, better access to necessary financing, more sustainable companies, and elevated social impact. 

Portfolio

Mikrofonden is Sweden’s largest, and smallest, social investor. They provide start-up and growth capital to associations, cooperatives, and idea-based businesses that create social benefits, enabling them to grow and become robust enterprises. The fund has micro-investments in 135 companies. 

GET Academy offers young people outside the labor market vocational education, providing them with sought-after skills as IT developers. In 20 weeks, young people receive training in coding and programming, followed by a year of practice in a company with close supervision. 

KLAR Kompetanse has developed a digital training tool that provides multilingual individuals with an introduction to the professional language used in schools and the workplace. The goal is to enable more people to complete vocational secondary education and enter the workforce. The company targets counties, secondary schools, adult education, and course providers in vocational training. 

Unicus and auticon merged in 2023. Both companies employ individuals diagnosed with autism as IT consultants, contributing to inclusion and diversity in the workforce. The merged company operates in 14 countries and is headquartered in Germany. More than 80 percent of the nearly 600 employees in the new company have an autism diagnosis, and we know of no other company in the world with a larger proportion. 

Gammel Nok continues its strong growth and was named a ‘Gazelle Company’ by Dagens Næringsliv in 2023. Gammel Nok provides staffing solutions, practical services, and home-based care to clients in both the private and public sectors, delivered by personnel aged 50 years and above, securing employment for more than 400 seniors. The company, with its headquarters in Asker, expanded into the Hamar region and Østfold in 2022. Gammel Nok successfully completed a capital raising in 2023 and is well positioned for further growth. 

Ludenso is an educational technology company that, with the help of Augmentet Reality (AR) enriched textbooks, aims to increase engagement, mastery, and to provide tailored learning journeys for students. The company has secured agreements with over 25 international publishers, including Cambridge University Press, Aschehoug, PG Online and SAGE. 

The Social Capital Fund saw positive developments in 2023. The fund made 10 investments in companies that hire vulnerable workers and completed an exit in 2023 with very good social and economic results. Danpal was sold in quarter four 2023. The fund concluded its investment period for new investments in 2023 and now has seven remaining investments. 

Generasjon M has entered social impact bond with Ringerike and Nordre Follo, representing the fifth and sixth municipalities with which they have collaborate on social impact initiatives. Nordre Follo’s contract is presently the largest in Generasjon M’s history, providing part-time jobs in nursing homes to 48 youths. Local bank foundations are involved as financing partners in these agreements. 

In 2023, FSE monitored the progress of three active social impact bonds. Within such a bond, a social investor provides upfront financing for a social entrepreneur or business, which is then repaid by the government if the predetermined social outcomes are achieved. This arrangement lowers the risk of testing new initiatives for the public sector and gives investors an opportunity to contribute to social innovation. In Øvre Eiker and Lillehammer, the municipalities are collaborating with SOS Children’s Villages on testing a new service called Family Partner.  

Researchers from OsloMet are evaluating the trial and have found in their Midterm Report that there is significant acceptance of the project among families and services. In four municipalities in Vestfold and Telemark, with Back in the Ring as a partner, the goal is to reduce relapse among young inmates. In Lier, the active phase of the social impact bond involving Trygg av natur has been completed, and we will find out in 2025 whether the initiative has contributed to an increased rate of secondary education completion. 

The Oslo Initiative

FSE launched the ‘Oslo Initiative’ in 2022, where businesses and foundations come together for a collaborative effort in some of Oslo’s most undervalued areas. Our motivation behind this investment stems from Ferd’s historical, personal, and business connection to our city, and our belief that the increasing disparities mean that society — and we at Ferd — are overlooking talents, resources, and ideas that are crucial for the future. Through this initiative, we aim to contribute to creating more jobs, increasing school motivation, and encouraging meaningful leisure time in four districts of Oslo: Grorud, Stovner, Alna, and Søndre Nordstrand. Beyond significant administrative and coordinating contributions, The Oslo Initiative have also supported 15 organizations that are actively engaged in the four districts. 

Impact StartUp

In 2020, our accelerator program, Impact StartUp, was formally organized into a separate entity, Impact StartUp Norge AS. The company boasts strong partners including Wilstar Social Impact, Klaveness Foundation, Sparebankstiftelsen DNB, Sparebankstiftelsen Østfold Akershus, Stiftelsen Kåre Berg, Oslo Family Office, Antonstiftelsen, and Deloitte as team members. It’s part of a broader Nordic collaboration alongside The Social Capital Fund in Denmark, Prosper Social Impact in Sweden, and Epiqus Nordic in Finland. Altogether, the accelerator program has supported over 110 companies across the Nordics. Last year, Impact StartUp launched a new digital platform for aspiring entrepreneurs and early-stage companies called Studio, which has already experienced great demand.  At the end of the year, Impact StartUp also won a tender from Oslo Municipality to enhance the district of Søndre Nordstrand with its new program, The South Zero Accelerator, and this initiative is already underway.  

Organisation

FSE had eight employees in 2023. The team made a competence leap related to new innovative financing instruments for social investments, and continued work on a new instrument called The FSE Impact Note. In addition, the team strengthened its know-how in place-based investments.

Future prospects

We expect that 2024 will continue to be a challenge for many. We will persist in our support for our portfolio companies individually and as a group. All companies have their own Impact Measurement and Management plan which will help them to adjust according to the social impact they create. Our hope is that the public’s attention will gradually shift towards a greater awareness of which services and measures produce positive social impacts. If competence in the public sector increases, we believe it will be easier for companies with new solutions to gain interest from municipalities and support systems. 

We believe that more social impact bonds will be realized in the public sector going forward. Given the strained economy, this type of bridging financing from social funds and investors becomes even more crucial. Additionally, we will also continue the work with impact management processes in the companies we are engaged in, to help clarify the connection between activity, measurable results, lasting change and social impact.

We will continue our efforts to inspire the public and private sectors to adopt solutions that provide documented social impact. Through innovative procurement and cross-sector collaboration, we are confident that we can find better solutions together than on our own.