UNICEF, the United Nations’ Children’s Fund, is diversifying its approach to supporting vulnerable youngsters around the world, by launching a fund to back local tech startups in emerging markets.
The $9 million Innovation Fund will support innovators from developing countries with projects that are open source and have a working prototype. Applications for funding will be assessed on criteria that includes strength of the team, the project’s relevance to children and the ability to see potential future value in the open-source intellectual property being created.
“It doesn’t mean that the applications from those investments won’t have a global reach but it does mean that we’re trying to find entrepreneurs in markets that otherwise might not receive a lot of capital funding and help accelerate their work,” says UNICEF Innovation Fund co-lead Christopher Fabian.
The fund will focus its investments on products for youth; real-time information for decision-making; and infrastructure to increase access to services and information, such as connectivity, power, finance, sensors and transport.
The successful applicants will be clustered into teams around certain types of technologies that UNICEF has identified as ‘ripe for investment’, which include blockchain, 3D printing, wearables and sensors, artificial intelligence and renewable energy.
Initial funding and investors from the $9 million raised so far comes from the Danish government, the Finnish government, the Walt Disney Company and the Page Family Foundation.
“We are trying to inspire people who might not have that initial capital to do their work better. In markets where there aren’t a lot of services for a startup, we know how difficult it is to get that first $30,000 or $40,000,” says Fabian.
International bodies like UNICEF as well as many NGOs have traditionally focused on facilitating donations and funding to aid development or support vulnerable populations. But as criticism has grown over the years of the role of powerful well-funded NGOs in distorting local economies and sometimes even hampering development, forward thinking individuals and the organizations themselves have been exploring new approaches.
The UNICEF Innovation Fund would aim to solve more problems quickly in emerging markets by getting into the thriving technology startup space as well making sure the youth get a proper education.
The bar has been raised with investments that poured into Africa in 2015. The top three countries to receive the most funding last year were South Africa at $56 million; Nigeria at $49.4 million and Kenya with $47.3 million. A huge improvement since 2012 when investing in Africa was considered a risk.
The Innovation Fund will not take an equity stake in any of the startups because it doesn’t need to, says Fabian. “We’ve created a hybrid between the world of venture capital and the world of international development, so what we do take is the intellectual property that’s developed by the companies that we’re funding and put in the public domain.”