HCT Group is a social enterprise in the transport industry. We earn our revenues from contracts won in the marketplace and reinvest profits back into services for our communities.
Social impact is at the centre of everything we do. To some, this might seem overplayed from a transport provider, but nothing could be further from the truth.
Transport makes an amazing difference to people’s lives. It is the means by which the most marginalised in our society can access jobs, education, healthcare – or even the simple freedom of seeing their friends and family. This is a truth so self-evident that often, our society forgets to think of it. It is why at HCT Group we don’t see our competitors as big bus companies, we see our competitors as loneliness, isolation and social exclusion.
The social issues that we seek to address are enormous - 900,000 older people in the UK say they feel trapped in their own home; the death rate of socially isolated older people is 26% higher than for other older people. As a consequence, scale matters.
To reach scale, you don’t just need to be a successful enterprise. It’s the cold hard truth that you need access to capital. This is where social investment comes in. HCT Group has sought and found social investment at each stage of our growth - and we have seen it emerge and develop as an increasingly sophisticated and effective source of finance.
This year has provided two milestones for us. The first one has been the successful conclusion of a social investment round of £4m in 2010. At the end of our investment term, our investors were repaid and had received their agreed financial and social returns. Over that period we grew by 62% - and provided 1.77 million passenger trips for community groups and disadvantaged people. It’s a great example of social investment working exactly as intended.
The second milestone is our next round of social investment - we have just secured our target of £10m to fund the next phase of our growth. The deal has brought together specialist social investment institutions, charitable trusts making investments of their reserves (imagine if trusts invested their reserves to gain a social impact all the time!), a fellow social enterprise and even a high street bank.
These investors have come together to seek both a social and a financial return. But they have also come together because they share our values and our mission. In my view, it is this idea of shared values on which the future of social enterprise and social investment jointly depends.
Yet the thing that most excites me about social investment is what it enables. We have ambition equal to the social issues we seek to address, and our recent fundraise gives us the opportunity to reach the next level of scale in our business and, most importantly, to massively increase our social impact.
By Dai Powell, Chief Executive, HCT Group