Social investor goes bust over lack of interest in social impact bonds

05 Dec 2016 News

A social investor has gone bust just ten months after it received a £475,000 investment from Big Society Capital, because of lack of local authority interest in social impact bonds.

Evidence-Based Social Investment, a London-based company, was set up to create a standardised social impact bond which could be offered to multiple local authorities, according to its entry on the BSC website. But a lack of interest from local authorities meant it did not manage to launch any SIBs before running out of cash.

EBSI worked with a number of local authorities to develop SIBs in the area of children’s services, and agreed one £800,000 deal in Medway. However that deal was not completed in time to prevent the organisation running out of money.

EBSI filed liquidation documents on 15 November, but it was announced today that the work of the company has now been taken over by social lender Triodos Bank.

EBSI’s founder Roger Bullen has joined Triodos to continue to work on the same projects, the bank said in a statement today.

“EBSI was established by Roger Bullen in 2015, and over the past 18 months has successfully worked with a number of local authority commissioners to develop and deliver outcomes based commissioning contracts funded through social investment,” Triodos said. “However, as a small start-up entering a challenging market place, EBSI Ltd ultimately encountered longer than expected delays in closing transactions and in October 2016 ran out of funding and entered into a creditors’ voluntary liquidation.

“The company’s largest creditor was Big Society Capital who had provided £475,000 of start-up capital in the form of equity and loans. Big Society Capital consented to the deal in order to support conversion of the EBSI pipeline and develop the market.”

Cliff Prior, chief executive of Big Society Capital, said: “We are delighted that Triodos, with their expertise in developing SIBs, have taken up this opportunity. While it’s always disappointing to lose a good organisation, it’s great news that the pipeline of EBSI’s deals will remain, skills will be transferred and no vulnerable people will have lost a service.”