Collaboration of multinationals and disruptive ventures is on the rise
Large corporates and agile scaleups defy expectations by partnering to solve some of the world’s most pressing challenges.
They might once have been considered unlikely partners, but today, impact-led businesses are increasingly likely to partner with established multinationals to deliver sustainable impact.
Moreover, corporate objectives have grown more closely aligned with their sustainability counterparts in recent years. A 2023 CensusWide survey of 1,250 CEOs of impact-focused businesses across Europe showed that multinationals topped the list of their preferred collaboration partners when tackling the world’s most pressing socio-economic issues. They came in ahead of government bodies and their own peers.
The survey findings showed that preferences for collaboration were consistent across five European innovation hubs – the UK, France, Germany, Netherlands and Sweden. A World Economic Forum whitepaper published in 2018 on collaboration between corporates and startups across Europe identified benefits for disruptive businesses, such as a rapidly scalable customer base and the ability to grow internationally with minimal risk.
Aligning missions: established businesses and scale-ups unite
Impact-focused businesses, especially those seeking to address environmental challenges, are yielding strong financial returns while creating jobs alongside their non-financial goals. On the corporate side, shifting values (along with shareholder activism and public pressure) mean a growing desire to mitigate businesses’ impact on the world.
This most recent data came to light at the Unreasonable Impact World Forum in November 2023 in London, when more than 20 impact-focused ventures met with a curated community of mentors, investors and industry thought leaders at the Royal Institution of Great Britain.
“Banks and investors can provide the vital capital and investment that smaller scale-ups need to maximise their impact,” says Sasha Wiggins, Group Head of Public Policy and Corporate Responsibility at Barclays. “Our objectives are more aligned than people often realise; the tides are changing in major centres of innovation across Europe.”
The world’s largest and most admired brands seek partnerships with commercially viable and highly disruptive entrepreneurs
Within the community at Unreasonable Impact – a collaboration between Unreasonable and Barclays – there are many examples of impact-focused businesses joining forces with organisations. Food waste reduction app Olio is working with Tesco, while Green Fuels is providing sustainable biodiesel for use in the Royal Train. Housing material startup Etopia partnered with Homes England in 2021 to help deliver zero-carbon homes across Britain, with Founder and Chief Executive Joseph Daniels saying at the time that “Our partnership […] is a great example of how the private and public sector can work together.”
Daniel Epstein, Founder and CEO of Unreasonable, shares his thoughts on the collaboration: “There is a unique opportunity for disruptive entrepreneurs, with advanced technologies aimed at mitigating industry’s impact on the environment, to come together with multinationals who have a stated desire to profitably reduce their carbon footprint. The world’s largest and most admired brands seek partnerships with commercially viable and highly disruptive entrepreneurs.”
Investor sentiment: resilience amidst market shifts
Instead of financial worries, the surveyed CEOs said that winning and retaining talent was, in fact, their biggest challenge for 2024. Collaboration with bigger players not only enables CEOs of smaller and impact-focused companies to deal with challenges such as talent and peer-to-peer competition, but also to turbocharge growth.
Awareness is building among the investment community about how sustainability goals are closely linked to financial returns. Over two-thirds of the surveyed CEOs noted stable or improved investor sentiment in the past year, despite challenges like the collapse of Silicon Valley Bank and interest rate hikes.
"I believe there is an opportunity for impact companies in today's investment landscape […] to seek investors beyond the conventional VCs,” says Karin Ebbinghaus, CEO & Co-founder of Swedish electric vehicle charging venture Elonroad. “This will open new doors to diverse funding opportunities for companies fundraising, [such as] backing from sources like corporate investors, government agencies, and family offices.”
Barclays is also ramping up its equity capital investment in global climate tech startups to £500mn by 2027.
“Addressing the known challenges, such as climate change, is critical, but it is also a significant growth opportunity,” says Wiggins. “The recent IEA World Energy Outlook report highlighted just how big the opportunities are in the renewable sector alone. Momentum is building, and investors who are not partnering to seize this opportunity will risk being left behind.”
It's clear that there is no single route to solving the problems that beset communities around the world. But the power of partnerships between multinationals and impact-focused ventures only looks set to grow.
“If you think of sustainability, it’s common to associate it with grand gestures and eye-catching commitments. But too often, these are more talk than action,” says Epstein. “The future really lies with the ‘doers’ who see purpose and profits as intertwined. These ventures are the ones who will shape economies in years to come and turn corporate commitments into action.”
