"Diversity is the most important thing to create great companies that thrive and get their business results corrected.”

Measuring impact is the key to true impact investing, shares Ofir Azury, head of technology investing at Gandyr Investment group. It is easy to say in a pitch that you want to make an impact, but committing to measuring it will set you apart. But Azury says the entrepreneurs themselves are also a crucial part of success. He looks for teams with strong values, the intention to make a difference, and a plan to achieve it. Diversity within companies is also important to their growth and ultimate success. One initiative Azury is involved in is bringing Druze into the high-tech field, which helps the individuals as well as the companies that hire them. Showing others that investments can result in social good and financial returns is what drives Azury in his work at Gandyr and his own Gooday Investment Company.

 

 

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Ofir, why do you call yourself an impact investor? What does that mean?

It started 11 years ago, when I started to advise Gandyr on different types of investment, mostly around the tech area. Gandyr is a family office in which there certain values that it employs, starting from the Gandyr Foundation. We managed to create an impact investment room, a virtual room, not doing only money from general investment and then put it in philanthropy. Trying to integrate this into a whole process that combines your values and puts it to work.

I started to work with different startups, starting with companies such as Nutrino. We'd started to find the food behavior of each and every user. We took it and turned it into something that is much more valuable for diabetics. It created a whole different layer of impact for this kind of patient and managed to reduce the sugar levels.

This kind of situation where you have an impact for the product and also for the company; I always divide them into two. By dividing it into the product impact and the company impact, you can integrate different layers of impact that the founders and the company can provide.

How do you try to measure impact and the potential risk?

You used the most important word: measure. I think, to do an impact investment, you need to measure the impact, not just say it in a pitch. When I'm looking for early-stage startups, the most important thing is the entrepreneurs. I've looked for VIP teams. VIP stands for V, the values. What drives the background and the values of the founder? I is the intent. What does he want to do? Then the P is the plan. How do we want to achieve it? Also, diversity is very, very important. The integration within the entrepreneurial team is really important for achieving something that has concrete impact measurement and also business and financial achievement. It's really important to work with these entrepreneurs, to understand this kind of intent, and turn it into a plan that can be measured.

Do you notice different patterns as you observe these different early stage opportunities?

Totally. Again, the entrepreneur is the most important thing. But more than that, within the impact area, the SDGs are one of the most important things that you can use as an investor. There's a lot of different aspects that are measured: the founders, the topic that they choose, how they're going to work with the company and its entire stakeholders. The early signs are if you want to measure it, if you want to achieve it, and how you're going to do it, and this is where I started to work with them.

Tell me about Gooday Investment Company.

Gooday is a family investments company that my wife and I started to advance tech investments and philanthropy, such as impact investing and social investment bonds. Social impact bonds are very interesting. We were part of diabetes prevention in Israel. We had 700 people that were likely to be in diabetic condition in a year or so, and you change entire habits in wellness and lifestyle. By doing that, we're actually giving the payors, like social security or the HMOs, value. Instead of paying a lot, they managed to make sure these patients would not be diabetics.

This kind of operation allows the investor to get back their money, but it’s also based on success. If we manage to bring a lot of people back from being pre-diabetic, we manage to help achieve a social business goal, but gain even a revenue on that. There are different types of models that really drive the entire social impact area into areas that can be a general financial outcome. This is something that really drives me.

Traditionally people observe these models as not aligning with financial returns. What I'm hearing from you is finding this win-win situation and this economically viable model can drive the real impact.

Totally. There is an income share agreement (ISA). Think, for example, of the student that lives in the peripheral area and cannot access high-tech society. He cannot really afford a bootcamp. You can take the risk from him and say, "We will take care of the payment. But you're going to pay from success only. If we increase your salary, or just a percentage of your future income." We manage to create social mobility. It's a success-based effort.

We're currently involved in another project in the Druze area. It's a social fund in israel. It's creating new social investment bonds for this community that usually does not go to the high-tech area. A lot of different companies within the Haifa area and other areas say, "Why don’t I have Druze in my company?" We need to get them educated. We need to help them get the right CVs and work on interviews. Diversity is the most important thing to create great companies that thrive and get their business results corrected. This is one of the examples that we're really excited about.

Tell me about the Israeli Forum for Impact Economy.

It is a forum that started in Israel that tries to combine the areas of regulation and different types of deal flow in the impact tech to promote and create a viable economy for them. It can be working with different pension funds to allow their savers to have an ESG (environmental, social, governance) related areas. We think millennials are the most important areas in this kind of puzzle. They really want to work in places that serve their own values. This is, we believe, going to be a change.

Impact tech is the most important area because ESG, for me, is the new DNA of the company. If you know how to treat your employees, your suppliers, your entire area, and your physical environment, this is what you're going to employ and use a lot of new workers that would like to work with you. There are a lot of different benefits to do ESG as your DNA, not only for the pitch, but to create real value for the company and reduce risk.

Are you ready for some fun questions?

I want to ask you something. What is your input about all these sessions you’ve done?

I get so excited about every person coming in and for 20 minutes trying to distill what they're passionate about. When I actually think about the journey that they had to go through to come up with these insights, that's the inspiring part for me. I'm learning that you can't skip over the journeys. I'm excited to throw myself into the deep water with these insights and try to claim them for myself through real experiences. It’s this continuous improvement and continuous thinking process that I get excited about.

Most importantly, this is a people business. The technology is riding beside us. But again, it's all about the people, what drives them and why they're passionate. I think you're doing a great job.

I have some fun questions: favorite subject in school?

I think the most important things that I had were going to the youth environment and youth movement.

One of your role models?

I think what Ronald Cohen is doing is really driving an entire scene into a new era. He's really a role model for me.

Three words you would choose to describe yourself?

I'm a trustworthy person. I try to be candid and say frankly what I think and try to be ethical in business.

Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, while working as a software engineer at Hippo Insurance and as a Senior Associate at J-Ventures. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.

 

Contributing editors: Michael Matias, Megan Ryan