Imagine a world where businesses prioritize not only profits but also the wellbeing of society and the environment. The realm of social impact startups makes this vision possible. Driven by purpose, these ventures combine innovation with empathy to create meaningful solutions. 

That’s all well and good, but are they actually capable of earning a profit? Should you invest in a social impact startup today, or would that be a big financial mistake? Let’s take a look.

What Are Social Impact Startups?

Picture this; you have an innovative business idea with the potential to make a significant difference in society. For example, maybe you want to develop a disability case management tool to improve a disabled person’s access to quality care either here or abroad. 

In that case, you might be venturing into the world of social impact startups. That’s because your technology will not only make an impact, it will also help out a vulnerable population.

What Function Do Social Impact Startups Serve?

Social impact startups aim to achieve long-lasting positive change on societal or environmental challenges, going beyond mere profit generation. Their main focus is centered around creating tangible improvements for people and our planet. Due to their purpose-driven nature and broad aspirations, social impact startups are increasingly gaining attention from investors.

One reason for their appeal is that they align with the values of many younger generations, who are more inclined to support new or online businesses doing good in the world. Plus, these startups demonstrate that it is possible to combine economic viability with social responsibility.

How are Social Impact Startups Performing?

In 2023, social impact investments are underutilized. This is for two reasons: investors don’t know about them, or they’re concerned they won’t turn a profit. To date, trillions of dollars are still needed to address problems present in our society, such as inequality and climate change. 

However, change is coming, and faster than you’d imagine. It’s estimated that 1 in 4 dollars of professionally managed assets (totaling 13 trillion) are now considered sustainability principles. There are already tons of people who are aligning their investments with their values.

Not only that, but investors are becoming more concerned by Environmental, Social, and Governance (ESG) factors, as they feel their money should do more than just make money.

For now, there’s significant growth in this startup scene, and this trend will likely continue.

Why the Future Looks Bright for Social Impact Startups

As our world becomes more connected, we become more empathetic to the wellbeing of others. And as conditions get worse, even in the first world, we’re starting to pay attention to the plight of our neighbors. For this reason alone, social impact startups have a bright future. 

But social impact startups are very new, which naturally makes investors worry about whether they should part with their money. Fortunately, there are already plenty of successful social impact startups in the United States and beyond, and these may make you change your mind.

Here are 10 social impact startups that are already making waves:

  • Goodr: A surplus food management platform that alleviates hunger and food waste.
  • Aspiration: Lets banking clients invest in environmentally friendly ways.
  • Saora: Provides safe and clean drinking water to underserved communities.
  • Ruma: A building collective that helps low-income communities in Indonesia.
  • Salt: Developed a revolutionary lamp that runs off of freshwater and saltwater.
  • Chezuba: Connects qualified workers with non-profits globally.
  • Treedom: Allows people to plant trees and track their growth online.
  • Persefoni: Helps businesses plan, monitor, minimize, and report their carbon footprint. 
  • Koompi: Created an entry-level laptop that’s accessible to low-income earners. 
  • Impact Terra: Made an app that gives farmers access to real-time agricultural data. 

New social impact startups are being built every single day, and we recommend investing in them if you want to create a more sustainable future while generating a decent profit.

In Conclusion… 

As you explore the world of social impact startups, you’ll undoubtedly realize their immense potential to transform our world for the better. Don't hesitate to get involved, be it by supporting such ventures, spreading the word, or even launching your own mission-driven startup.