The investment arm of The Big Issue has sunk £1.25m into a group of community nurseries in deprived areas of London.
The London Early Years Foundation LEYF has secured the funding from The Big Issue Invest and Bridges Ventures.
The investment will be used to add 10 more sites to the 26-strong network that employs 400 people in areas such as Tower Hamlets and Peckham. In the long term, the government-backed scheme plans to double the number of children it reaches to 5,000 across the capital.
The business model differs from other local authority nurseries, which tend to rely on the availability of government grants. The LEYF is a charitable social enterprise which makes a return for its investors.
“There are challenges with any social enterprise model – governance can be challenging, as we try to balance locking our own assets through charitable memorandum and articles with building a business structure,” said June O’Sullivan, chief executive of LEYF. The education enterprise hopes to raise a further £1.5m in the next year to drive further expansion.
Bridges Ventures is a venture fund specialising in social enterprise, and recently sold its investment in student housing in Whitechapel.
“We are also determined to prove that it’s possible to have high-quality nurseries in these areas smashing the ‘acceptance’ that quality will be lower in areas of deprivation,” said Ms O’Sullivan.
“LEYF has a model that creates a ripple effect of social impact … because we train local young people through our apprenticeships, maintain the quality of our staff through the LEYF Academy and employ many local people.”