The London Early Years Foundation has received a second stage of acquisition financing worth £1.5 million from leading social impact investors Big Issue Invest (BII) and Bridges Ventures (BV)’ Social Entrepreneurs Fund. This latest instalment forms part of a £2.75m financing package from the two investors.
LEYF is a charitable social enterprise that runs 36 community nurseries; employing over 300 staff across 9 boroughs, in some of London’s most disadvantaged areas.
With its roots dating back to 1903, LEYF has developed an innovative social enterprise model ensuring that children, regardless of background, can access high quality day care provision. Surplus from LEYF’s more profitable nurseries is reinvested in fulfilling its social aims, which enables the organisation to support many of London’s most impoverished children and their families.
The £1.5m of extra finance will be used to drive LEYF’s expansion through the acquisition of new nurseries across London, and to fulfil its goal of doubling in size to reach 5,000 children.
Encouragingly, LEYF also received offers of finance from a number of other organisations including mainstream institutional investors which highlights that there is significant interest in high impact ventures from the wider market. This is excellent news not only for LEYF, but also for other high-impact enterprises and charities in the UK.
Last year, LEYF successfully raised an initial £1.25m with the support of ClearlySo, an impact investment intermediary that provides advisory and capital raising support to organisations that generate high social and/or environmental impact. This work was supported with a capacity building grant through the pioneering Investment & Contract Readiness Fund, managed by SIB Group and funded by the Cabinet Office. Both ClearlySo and LEYF took the decision to work with the existing investors, BII and BV, who were keen to continue to support LEYF in scaling up and improving the lives of more children.
The entrepreneur, June O’Sullivan explains “We are delighted to have negotiated this second social investment deal. We can now continue to scale up our business and increase our social impact. More LEYF nurseries mean more high quality childcare places, sustainable apprenticeships and more employment opportunities in areas where there is poverty and unemployment. We are particularly proud that the LEYF childcare model is recognised and supported by so many important investors.”
Stuart Ferguson, Investment Director at Big Issue Invest said: “We are delighted to be able to extend our partnership with LEYF, to enable June and her team to significantly expand over the coming years. LEYF is a great example of a commercially driven social enterprise that is making a real difference to people’s lives principally through the quality of nursery provision available but also in their commitment to colleague development and wider integration into the local community”
Caroline Tulloch, Investment Manager at Bridges Ventures, said: “LEYF is a great example of what an ambitious social business can achieve with the help of patient, mission-aligned capital. Since our investment, it has seen a step-change in its growth, adding eleven new nurseries to its portfolio – while continuing to improve the quality of the service it provides to young children and families in some of the most disadvantaged areas in London. We are delighted to support LEYF in the next phase of its growth.”
Rod Schwartz, Founder and CEO of ClearlySo, said: “It has been a privilege to work with LEYF over the past few years and to help them map out and begin to achieve their ambition. Their cross-subsidisation model is brilliant and their potential for scale is enormous. The need for their excellent nurseries has never been so urgent as today as income gaps widen, budget cuts deepen and the need for reliable provision surges. On a more personal note, working with June O’Sullivan, Neil Fenton and the rest of their team has been a pleasure.”