At this year’s World Bank annual meetings, leaders across sectors gathered to discuss one of the most pressing questions in global development: How do we finance solutions that accelerate impact? On the sidelines of the meetings, MSD cohosted a session at Devex Impact House titled “Investing in opportunity: Social impact through venture capital.” The conversation focused on a growing reality that when private capital is deployed strategically, it can catalyze measurable progress in advancing health care and overall sustainable development.
The evolution of venture capital for social good
Historically, venture capital was rarely seen as a tool for driving social progress; it was more commonly associated with technology startups and rapid profit. Today, that perception has shifted dramatically. We’re witnessing a powerful convergence of finance and purpose, as investors increasingly recognize the potential for innovation and return on investment in sectors and in geographies, once viewed primarily through a philanthropic lens.
For low- and middle-income countries, or LMICs, this shift has opened the door to a new generation of investment opportunities from digital health to financial inclusion to women’s economic empowerment, which has begun to drive a more resilient ecosystem.
For example, Leapfrog Investments, a firm MSD has invested in, embodies the “Profit with Purpose” philosophy. Leapfrog backs companies that provide health and financial services to emerging markets. This approach has helped redefine venture capital by demonstrating that investments in underserved markets can be both profitable and impactful.
Tackling challenges, scaling solutions
With impact investing on the rise, investors have found that its promise lies in the ability to scale innovative solutions that can help solve complex global challenges. That said, with this potential high value comes practical hurdles such as resource constraints in emerging markets, the need for long-term capital, and intentional collaboration.
Another area of focus for impact investors is bridging the gap between impact-focused and traditional venture investing. Historically, these two spheres operated in parallel with little intersection; one focused on purpose, the other on profit. However, we’re increasingly seeing collaboration and cross-pollination.
Funds such as Adjuvant Capital and the Global Health Investment Fund are prime examples, bringing together diverse investors to accelerate global health innovations. Their portfolios span new vaccines, diagnostics, and digital health tools that both improve lives and generate financial returns, demonstrating that “impact” and “investment” can be mutually reinforcing, not mutually exclusive.
As this momentum builds, impact investors are thinking more deeply about what truly drives meaningful and lasting change. It’s not just about funding good ideas; it’s about finding models that can scale, deliver measurable results, and stand on their own financially. The focus is shifting toward intentional, transparent approaches that link purpose with performance, and help ensure both can grow together over time.
In this evolving space, I’ve found two guiding principles are critical to success and continued growth:
1. Dual goals: Every investment must advance both measurable outcomes and financial sustainability.
2. Collaboration: We invest and learn alongside partners, understanding that shared insights, networks, and capabilities multiply impact beyond capital alone. Partnerships often produce benefits that go beyond immediate financial return by strengthening ecosystems, attracting additional investment, and helping scale innovations faster.
Through the MSD Impact Venture Fund, we invest in companies that aim to improve access to health care in LMICs while achieving financial and strategic value. In 2024 alone, our impact investments reached over one million people with essential health interventions. Impact investing has become a key part of MSD’s overarching strategy for expanding access to health and strengthening health systems.
Harnessing innovation to drive scalable impact
One of the most exciting frontiers for impact investment is the use of emerging technologies, especially artificial intelligence. AI has quickly become a powerful enabler in health care, where AI-powered tools are already reshaping service delivery.
One company that we’ve worked with through the MSD Impact Venture Fund that exemplifies this is Mamotest, a digital health enterprise founded in Argentina to expand access to high-quality mammography. Using AI-powered image interpretation, Mamotest offers more efficient, affordable, and accurate screening compared to traditional models. To date, the company has reached more than 750,000 patients, and, with support from MSD and other investors, has expanded into Mexico and Spain. By combining technology, partnership, and purpose, Mamotest is not only transforming women’s health outcomes but also demonstrating a scalable model for equitable innovation for a range of conditions. While digital image interpretation cannot replace the expertise of a radiologist, it can enhance and accelerate their work by triaging cases, flagging areas that need closer human review, and optimizing limited specialist capacity.
By applying technology to improve efficiency and equity, impact investors are helping ensure that health innovations reach the people and communities that need them most. In this way, AI is an inclusion tool, not just a technological breakthrough.
The future of impact-driven capital
The evolution of venture capital from a purely financial instrument into a vehicle for inclusive growth marks a profound shift in global development. Private capital is no longer operating in a silo from public and philanthropic funding. The private sector is a critical part of the engine driving systemic change.
Looking ahead, opportunity lies in deepening collaboration between investors, governments, and civil society; leveraging data-driven insights to guide decision-making; and maintaining a clear focus on equitable, measurable outcomes. The goal isn’t just to invest in solutions, but to invest in the opportunity for individuals, families, and communities to thrive.
At MSD, we remain committed to this path. MSD’s Impact Venture Fund stands as a model for how global corporations can blend financial innovation with social impact, and how, together, we can build a healthier, more inclusive future.
Watch Ken Gustavsen’s full session hosted by Devex to discover how the global development community can mobilize investment for inclusive growth.
About the author
Ken Gustavsen
Ken Gustavsen is the managing director of the Merck Impact Venture Fund, investing in a range of innovative global health care solutions. He has been at Merck since 2000 in a variety of roles with a focus on innovative approaches to expanding access to health care in low- and middle-income countries and emerging markets. Before joining Merck, Ken led a post-war relief and development program in Kosovo for World Relief, and prior to that, Ken served for six years in the U.S. Navy in a variety of assignments. He currently serves as a strategic adviser to the Rutgers Institute for Corporate Social Innovation.
