How does impact investing change during a pandemic? The opinion of Lita.co

Thanks to the availability of the French fintech LITA.co, operating also in Italy and dealing for years with impact investing, we have the opportunity to discover how both the preferences of investors and those of the projects presented have changed, due to the health emergency for the coronavirus. Stefano Rossi, Country Manager Italy of LITA.CO tells us how this fintech has operated and what he has noticed.

What does LITA.co do and who does it address to?

LITA.co is the first equity crowdfunding platform focusing on impact investing. Our goal is clear: to democratize impact finance. We empower common people to invest alongside with professional investors in companies that aim to generate a positive social and environmental impact, in parallel with a financial return. All the companies on LITA.co answer to at least one of the Sustainable Development Goals. We believe in the growing propensity of investors to take into account extra-financial criteria and we are committed to reconcile the needs of ethical investors with the financial needs of social entrepreneurs.

What impact has the health emergency on your business? How did you deal with it?

The COVID crisis had a strong impact for us, both in positive and negative way. As many equity crowdfunding platforms (not only in Italy) we experienced a decrease of interest related to some fields of business and investments. Indeed, COVID caused the failure of one of our campaigns: SEAY is a virtuous startup operating in the sustainable fashion industry, and as the crisis raised all the committed investors have been forced to step back. Most of them are working in the fashion industry too and, as you know, this sector suffered and it is still suffering the crisis, so they decided to exercise their right to withdraw the investment.
In the opposite way, COVID crisis and the forced lockdown highlighted social impact and sustainability topics for several industry, as the Italian agri-food production. Another campaign, Humus, was focused on this topic. The crisis gifted this engaging social impact startup an unexpected media exposure which led to new business partnerships and also to the successful overfunding of the equity crowdfunding campaign.

Have you launched ad hoc initiatives?

As group, we reset our fees on investors, encouraging a very good answer. As LITA.co Italy, we launched a call for sustainable enterprise working in the fishing industry and in the related supply chain: the award named “Premio Finanza Sostenibile per il Mediterraneo” (literally “Award Sustainable Finance for the Mediterranean Sea”) was born – in partnership with Chimica Verde Bionet and Legacoop – to valorise and enhance the sustainability in this so important sector. Furthermore, we participated to initiatives launched from other companies, like Entopan and Mamazen, to help startups and SMEs to boost their development after the crisis.

Have you noticed a change of attitude of investors due to the pandemic?

This global emergency has raised the awareness of the urgency of the green transition, as well as the economic and social impact of individuals’ behaviours. We are all more aware of the need of investments in healthcare, in widespread digitalization (to not leave anyone behind), in education and into social inclusion, as of course in green businesses. This trend was already set but we believe it will raise more and more in the next months.

And in the type of projects submitted?

We are perceiving more social openness to innovation. The time is right to leave behind the unsustainable Silicon Valley model and to experiment a new “Community Capitalism”. We must focus on communities and places as new centre of our development agenda, adopting new business models: profit companies pursuing social goals supporting the local economic development.

Which ones are the most successful today and why?

Today and in the future, projects and businesses with positive impact on communities will gain more and more attention from customers and investors. People pays more attention to brands with a clear and shared vision of the world, committed to a real positive impact on society and environment.

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Author: Fintech District

8 September 2020



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