The social enterprise K10 Apprenticeships has closed a second institutional round of social investment, raising £500,000 from CAF Venturesome, Trust for London, and Treebeard Trust. The funding will be used to refinance the loan from Impact Ventures UK (IVUK), who invested £600,000 in the company in February 2014 and were K10’s first institutional social investor.
It comes at a time when the company is looking to grow its social impact, having just entered into long-term partnerships to provide apprenticeship opportunities with Heathrow Academy and the London Borough of Camden.
Both commercially and socially, the company has made great progress since IVUK invested in February 2014, creating over 550 apprenticeship opportunities, with a steadily increasing proportion of apprentices qualifying and finding full-time employment. Most of this in construction, a sector that has lower than average apprenticeship starts and success rates, and in London, where over 100,000 young people are not in education, employment, or training.
Commercially, K10 has become fully sustainable, diversifying its products and services into new sectors, and demonstrating it can generate financial returns for investors whilst providing a cost-effective service. With a sustainable business model, sector expertise, and social investors on board, the future looks bright for the company.
Richard Flaye, Board Chairperson at K10 Apprenticeships, said, “Finding appropriate finance for a social enterprise is important to get right. On the one hand, commercial funders value financial return with little appreciation of social impact; on the other, grant funding often focuses on creating deep impact but with little consideration of business sustainability or growth. We needed a strategic partner during a critical phase of our evolution that proactively evaluates the integrity of our social purpose, enhancing the capability of young people to find rewarding, full-time employment. Working with IVUK over the last two and half years, we have become fully sustainable, improved the quality of our offer, and established K10 as a leader in the apprenticeship space. Alignment on social impact is an absolute must; that’s why we’re excited to work with three new social investors during our next phase of growth.”
Raf Goovaerts, Partner at Impact Ventures UK, added, “K10 was IVUK’s first investment. We invested in a company that had traction in construction, with potential to grow its top line and social impact. Two and a half years later, K10 has clearly demonstrated it can enhance young people’s employability whilst providing a necessary recruitment service to contractors. It’s a great example of a purposeful and scalable enterprise that can consistently generate financial and social returns for its stakeholders. We exit this investment proud to have been a part of K10’s evolution, and are excited to enable the company’s progress to mainstream social financing.”
Amir Rizwan, Investment Manager at CAF Venturesome, said, “The investment into K10 provides an opportunity for CAF Venturesome to support a high impact organisation that has delivered invaluable apprenticeship opportunities to young people across London. We are excited to be supporting K10 in the next stage of its growth plan, especially in light of the Apprenticeship Levy set to come in at the start of 2017. We also welcome the opportunity to work with Impact Ventures UK, Trust for London, and Treebeard Trust, demonstrating the way in which many social investors can collaborate effectively.”