It is definitely the passion, and sometimes even obsession, of the founders for solving some of the most pressing societal challenges of today and tomorrow that make my job rewarding.
Magdaléna Radová is an impact and investment manager at Tilia Impact Ventures, Czech-based impact VC fund focused on backing visionary founders from the CEE region and investing in solutions contributing to a more fair, just and sustainable world. She is an expert in impact measurement and management, fund management and advisor and mentor to female, social and environmental enterprises and nonprofits. Prior to Tilia, she lived in Luxembourg, focusing on impact investing and microfinance in developing countries at institutional and fund level. She holds a Master’s degree in Behavioural Economics from the Sorbonne University. She is passionate about sustainable food production systems and regenerative farming, innovative nature-inspired circular solutions, mind, body & soul approaches to business and health, education systems supporting civic-engaged, eco-aware youth and empowering women for a more sustainable world.
1. When did you first meet with term impact investing? What were your first thoughts about it?
I have been in the impact investing field since 2016. At that time I lived in Luxembourg and worked with an affluent group of impact angel investors on advancing gender-lens investing, and joined the European Investment Bank working on impact investing in Africa. Those were the early days of Sustainable Development Goals being introduced and I still remember how we were assigning the various goals and colours to the EIB investment projects, setting the foundation for later impact frameworks. And my first thoughts, well, when I first discovered this field, it made total sense to me and was a natural continuation of my endeavors in behavioural and development economics to pursue a career where I could combine both finance and purpose for improved wellbeing of people & planet.
2. You are working at Tilia Impact Ventures one of the CEE region’s impact focused funds. I assume you are working a lot with startups. Is there a story or anecdote you would like to share which could give us a little insight about the challenges and/or the rewards of your daily work?
At Tilia, we invest in early-stage mission-driven companies from the region. I do not have one particular story of a founder to share here, yet it is definitely the passion, and sometimes even obsession, of the founders for solving some of the most pressing societal challenges of today and tomorrow that make my job rewarding. It is this feeling of collaboration, shared effort and pursuit of common goals, as founders, investors and other stakeholders, in advancing on those challenges around us that fills me with hope that we can still make it work as a society.
3. Are there any special sectors where Tilia prefers to invest?
Beyond just capital injection, Tilia Impact Ventures is all about creating ripples of change. Our balanced investment approach is investing in two interconnected and mutually reinforcing themes of People & Planet. It is a testament to our holistic vision and understanding of the need for green and just transition. Our sectors we focus on are therefore i) Climate & Sustainability Transition: From decarbonizing the grid to promoting sustainable food production and championing the circular economy, and ii) Social Equity and Empowerment through Education, Access to Healthcare and Inclusion: Spotlight on EdTech and bridging skills gaps; Creating opportunities for civic engagement and fostering transparency; Focus on access to healthcare, MedTech innovations, mental health, and preventive care and wellbeing.
4. What are the main trends you are expecting in the impact investments sector in the region?
Now that the asset class is clearly established in the region with a handful of impact funds operating in CEE countries for few years already, the trends I expect to see in the coming years are, first, a steep growth of both the capital available in the region that has some impact appetite, as well as a number of founders operating with viable impact business models. Especially in the climate-related fields as these are the „easy” sectors where financial incentives are starting to be more aligned, pricing in the negative carbon and environmental externalities, and the regulation clearly kicking in, representing a clear business opportunity. Second, moving from niche to mainstream includes the need for greater professionalisation at a system, entity and individual skillset level to overcome the current wave of green-washing and impact-washing, for everyone to be able to distinguish between what solutions can really bring a positive lasting change beyond just flashy ESG commitments and marketing claims. And third, I cannot skip the trend of gender-lens, at all levels of the society. Because without making full use of half of the population potential we cannot really advance on any of the challenges we are facing as a society. These are the trends we see globally as well, and finally experiencing them and acknowledging them now in our CEE region is actually reassuring.
5. Where do you think there is still room for improvement in the impact VC sector?
We need to start thinking about impact the same way we do about financial outcomes – starting with defining the language from accounting and legal perspective and bringing the practice of impact assessment in, while continuing to build the business cases for value-added impact solutions, and finally translating impact into value and valuation of the businesses. These are the ingredients to making it a business as usual. And this is definitely not limited to impact VC sector. Rather these are the challenges shared across the impact investing sector related to mainstreaming our practices into general capital markets, VC sector included.
