The poverty premium is a term that describes the way those in poverty often pay above the odds for goods and services. Think payday loans or pay-as-you-go energy meters, for example.
For the uninitiated, Wayra is a global accelerator brand from telecoms giant Telefonica. As our previous coverage explained, its Open Future_North space in Oldham was set up to give local startups access to resources and expertise to help them grow. But it wasn’t a traditional accelerator that invests in startups and gives them a concentrated programme of support.
Fair by Design
The new ‘Fair By Design‘ programme is looking for up seven startups to support. It’s funded and supported by the Fair By Design Fund. This is a partnership between Big Society Capital, the Joseph Rowntree Foundation, Finance Birmingham and Ascension Ventures. The fund currently has £8 million ready to deploy to tackle the poverty premium. It’s looking to raise up to £20 million that will go into accelerators and individual investments.
Gary Stewart, Director of Wayra UK, tells us that socially-minded startups are part of the Wayra’s DNA. He points to a social venture collaboration it ran with the Cabinet Office in 2012 as the roots of this approach. In the years since, Wayra UK has backed companies like Switchee and Squirrel that focus on financial planning or saving money. This points to the kinds of startups that should be a good fit for the new accelerator.
The Fair By Design Fund’s investment focuses are companies tackling energy, finance, insurance and geography-based disparity of opportunity. So, if you fit in one of those broad camps it’s worth looking at this new accelerator.
Although companies that take part need to be ‘investment ready,’ Stewart says that their social purpose is more important than their likelihood of producing a huge financial return for Wayra. As a corporate initiative, Wayra is more interested in developing sustainable businesses that can potentially partner with Telefonica down the line.
Wayra is flexible about its investment amount and the stake it takes in the companies that take part. Stewart says it doesn’t want entrepreneurs to take a down round (raising money at a lower valuation than the previous round) to take part if they already have some investors on board.
You can register your interest in Fair By Design on the Wayra website.
Wayra’s Oldham space is part of a larger facility that also houses the Hack Oldham initiative. We’ll be dropping in for a proper look at the space soon.