Social Enterprise UK

Social Enterprise UK

Project: Demand led B2B social investment fund feasibility study

Grant: £10,000

Social Enterprise UK (SEUK) supports social enterprises to create a fairer economy and a more equal society. The work of the organisation includes research, campaigns, and lobbying to build markets for social enterprises, celebrate place-based approaches to social innovation, and champion the Social Value Act, which requires public bodies to consider choosing providers on the basis of social value creation. One of its flagship initiatives is the Buy Social Corporate Challenge, which encourages the UK’s largest corporate businesses to use their procurement power to spend £1 billion with social enterprises. SEUK have been working for the past six years on developing and promoting access to corporate supply chains for social enterprises. The project aims to explore the feasibility of creating a business-to-business (B2B) social investment fund based on insight from the Buy Social Corporate Challenge.

This project will explore the feasibility of developing a fund to support social enterprises to maximise the opportunity of B2B markets, working with corporate buyers to ensure the initiative is demand-led. SEUK believes that corporate supply chains represent the biggest opportunity for growth of social enterprise markets. Funded by Access, SEUK has analysed data from 6 corporate partners in the Buy Social Corporate Challenge to identify product categories that present an opportunity for social enterprises to expand to meet procurement needs. The result was 25 product categories – shortlisted from a total of 700 – that represent market opportunities. Based on these categories, SEUK has commitment from corporates to support social enterprises through the tender process to win and develop within procurement category areas. What is now required is the capital to support growth within one of the three mechanisms:

  1. Entrepreneurial growth – Working with existing social enterprises to rapidly grow within identified category areas.
  2. Pivoting – Large existing social enterprises that may currently be principally public sector funded seeing the opportunity in one of the identified category areas to develop a new revenue stream.
  3. Mergers & Acquisition (M&A) – Private businesses working in the identified category areas being bought/acquired by social sector organisations.

SEUK will use the feasibility study to assess the degree of social investors’ interest to support the development and scaling of social enterprises in this way. The key output from the feasibility phase will be a clear business plan of what is required to bring it to fruition.

SEUK believes that the fund will be of benefit to social enterprises looking to work in B2B markets. It will benefit them through the direct enterprise opportunities the fund will create and by promoting procurement opportunity areas more broadly. The fund will take a market-led approach to develop social investment propositions, which is distinct from the current ad hoc investment approach, and could be further expanded to B2C market development.