Is Impact and Diversity still relevant in tech?

0:00Mike Butcher with PathFounders. We like to cover the code, the capital and the consequences in the startup ecosystem. you thought diversity and impact was out of fashion apparently it's alive and well europe has no shortage of startups claiming to make an impact but which companies are genuinely worth watching and how and why next impact europe is a new platform created by two investors 4P Capital in Paris and Impact Shakers, a VC and accelerator. They've unveiled an inaugural list of 50 impact startups selected from 520 nominations across 35 countries. The initiative aims to give greater visibility and potentially greater access to capital to diverse founders tackling challenges ranging from climate and waste to health care, food and education.

0:56To discuss how the companies were selected and what impact really means in venture capital in 2026 and whether greater visibility can translate into investment, I'm joined now by Joncha Brachman, who's founder of Impact Shakers and co-founder of Next Impact Europe. Thanks very much for joining, Joncha. Thanks for having me, Mike. So, yeah, we are definitely convinced we're still in fashion here. so not only do we believe that the companies we're showcasing have amazing potential to make a positive impact on society and the environment but also build amazing businesses yeah well let me take you up on that because the word impact was used a lot for the last say pre-pandemic it was quite in fashion and then we've also we've gone through such huge eruptions with the pandemic and then also with all the kind of craziness around the Trump administration and the anti-DEI and anti-impact kind of optics and the issue is is that I think that over the last few years impact has slightly gone out of fashion and the words things like resilience have come back in.

2:19Can you just explain to me and the audience of PathFounders what your defining impact is and why you think it's important to continue surfacing this phrasing and this characterization around, especially around startups? Yeah, of course, we had the discussion, should we still call it Next Impact Europe? Because it's It's mostly the past six months that resilience has taken over or critical infrastructure and all of the impact VCs in Europe are taking a bit of a different vocabulary while fundraising on our end. but when we look at the companies that we've received and look at the lists the final list we published for us impact is still about positive impact I would say like I said on society or the environment and I don't think we need to shy away either from publishing a list which is a bunch of diverse founders building, like I said, amazing businesses as well.

3:29So you think it's important, but, you know, is it helping the companies and the founders themselves to do this? Let's not dwell on it too much, but let's just get it out of the way. I believe it's still helpful to get any type of visibility out there. And in the case of Next Impact Europe, the idea has always been visibility as a first step and involving over 90 investors and ecosystem builders, but mostly funds in Europe in the nomination process. but also in the next step which is that we will be sharing all of the details the founders have been sharing with us with the investors I'm much more into what can we activate and what can we have as results from this first step of visibility than dwelling on whether we should still focus on DI or impact.

4:35Right but I mean visibility don't you think visibility is a little bit of a joke because ultimately what counts is partnerships is money is funding and I mean visibility you know people can start a podcast or something and start whatever these days so I don't know why I'm not sure why you understand why you think visibility is that big of a deal. No I think the visibility part, as I said, is the first step, which is why we made it so important that it was coupled immediately to one, a partnership at VivaTech, where the founders could join and get access to more connections. But also, as I said, first and foremost, the engagement of the nominators to be interested in all of the companies that passed during our selection process.

5:37Right. Well, in the report, the UK, Germany, France, the Netherlands and Spain produced the largest number of nominations in your report. I mean, do you feel that companies in other smaller countries or perhaps in Eastern Europe were overlooked? um there were definitely some nominations coming from these countries but the quantity isn't as high it's clear that the country is one with the largest populations but two with the strongest and most mature startup ecosystems in general have delivered the most nominations and the companies that we ended up selecting for the final list as well also circular economy and waste companies represented 30 of the of the cohort why do you think that category emerged so strongly um i think we we're still calling it circular economy but maybe this is one of the domains that will soon get a new name uh it is part of the um sovereign uh movement where we're looking at how can we be more independent as Europe.

6:50So I'm definitely thinking that is part of the reason we see circular economy emerge more as people put forward companies that are growing and good companies probably for follow-on investments in portfolios as well. So maybe soon they will get another label. well yeah i know i hate to hate to harp on about this but the language does seem to be quite outdated we're you know we're facing you know huge threats from russia we're talking about america potentially withdrawing from europe um and we're still talking about circular economy startups why are we not talking about national security resilience money saving money because a lot of these impact companies actually do save money don't they they definitely so why why impact is is still a big issue when you might as well just do what it says on the tin as in it's about saving money it's you know right i think we need you in our camp mike we need you to do some writing on these companies and i i do believe that a lot of us impact investors uh maybe haven't been as great at describing the companies in this light um and are in transition to doing so um and my dream has always been to get the startup ecosystem to be more of a startup ecosystem instead of having impact here diversity there and the regular startup ecosystem in a different corner which i'm also very happy why i'm very happy to talk to you today but i do think we need some help from different types of outlets from different types of outlets or from people who are willing to build a bridge on the other end as well.

8:58And yeah, I'm very happy to point this out. Well, you know, your report is called Next Impact Europe, so you've got to own it at this point. But Next ROI Europe doesn't sound as catchy. Well, who knows? Look, tell us a little bit more about Impact Shakers. I understand and please tell me if I'm wrong you've got a 20 million euro venture fund you're focusing on diverse led pre-seed impact startups around the Europe and the UK do you want to enlighten us yeah we launched in 2024 we've made 18 investments so far which are across nine of the countries at this point and all of the businesses we invested in we're reviewing how they fit into this new narrative of building critical infrastructure, protecting it, how does it fit into the sovereignty of Europe.

9:59And I think most of our portfolio companies do. So this is one of the big exercises we're doing at the moment is seeing how we can reframe impact. but I'm also but tell me if I'm wrong here I don't mind as much to keep using impact or inclusion it depends on on what our goals are I guess in which conversation we enter what kinds of things what kinds of things that LPs say to you about the direction you're going and the thesis that you have? In our case, most of our investors are very motivated by our mission. And whether we call it impact and diversity, or critical infrastructure and sovereignty, or resilience, I don't think will make the biggest difference.

10:57It will make a difference for new investors. and when we go out into the market again, I'm sure it will make a difference because some people will have changed their strategy. But at this point, I don't think that's what keeps people awake. Right. Well, obviously, it's an ongoing debate. I know that you're releasing this report outside or during VivaTech in Paris. Do you think VivaTech is still relevant? I think the big conferences in general, I've seen a big shift where a lot of the action happens outside of the conferences as well. Personally, I've been attending the mass conferences for a long time and I do prefer smaller events like dinners or some more intimate conversations around the table.

11:58but I do think there's still a place for the big conferences including VivaTech in Paris because it's the one in Paris for startups to have these days where they pitch their company 200 times in a day it's an opportunity to learn, maybe some investors should do that in one day as well, pitch their funds 200 times and see what sticks Well, yeah, I'm sure it still has a place. Well, very interesting to talk to you. Jonsha Brachman there from Impact Shakers and co-founder of Next Impact Europe. Check out that report. But for now, thanks very much for joining Path Founders. Thanks.