An innovative new acceleration programme, based in Oldham, is to tackle the poverty premium – whereby poor people pay more for essential goods and services than those who can more easily afford them.
- Wayra Fair By Design will support up to seven tech start-ups a year, based in the new Open Future_ North accelerator in Oldham
- The programme will support start-ups seeking to tackle the poverty premium – where people from low-income households pay higher prices for many essential goods and services such as energy, insurance, borrowing, transport and food
- Wayra Fair By Design is backed by a new investment fund that has £8 million ready to deploy, and is seeking to raise up to £20 million
- The state-of-the-art Open Future_ North accelerator, which opens tomorrow and will host the programme, will help companies scale and support the development of the tech sector in Oldham and right across the region
A new generation of tech companies will seek to tackle the high costs of everyday goods and services faced by people living in poverty, thanks to a major acceleration programme that launches in Oldham tomorrow (29 June 2017).
Wayra Fair By Design will support up to seven start-ups a year that aim to tackle the poverty premium, where people in poverty pay more for many everyday goods and services – such as energy, insurance, borrowing, transport and food – than those who can more easily afford them.
For example, people in low-income households can be reliant on expensive, high-interest payday or doorstep loans because of a lack of assets, lack of information to generate a credit score, or a poor credit rating. Start-ups developing solutions that open up more affordable credit options would be ideal candidates for the accelerator programme.
A 2016 report by the University of Bristol revealed that the poverty premium paid by low-income families is, on average, £490 per year – enough for a family holiday, children’s clothes and shoes, or keeping a house warm in winter. According to Joseph Rowntree Foundation research, one-fifth of the UK’s population is living in poverty.
Wayra Fair By Design will be run by Wayra UK, the leading corporate accelerator that is part of the Telefónica Open Future_ network, at its state-of-the-art Open Future_ North facility in Oldham, which opens tomorrow.
Start-ups accepted to the programme will receive approximately £70,000 in cash and services, including bespoke support from world-class investors, mentors and coaches; opportunities to work with Telefónica and its partners; and full access to working space at Open Future_ North. Wayra sees Oldham as an ideal site for tech sector development, given the town’s young and diverse population, investment in regional infrastructure projects, passionate local business leaders and direct transport links to Manchester.
Wayra Fair By Design will be funded and supported by the Fair By Design Fund, a partnership between Big Society Capital, the Joseph Rowntree Foundation, Finance Birmingham and Ascension Ventures. The fund has £8 million ready to deploy and is seeking to raise up to £20 million to invest into companies tackling the poverty premium, both within the accelerator and in separate investments across the UK.
Gary Stewart, Director of Wayra UK, said: “It should not cost more to be poor. An entrepreneur’s central task is to offer a compelling, sustainable solution to big problems, and we can think of fewer problems bigger or more worthy of a solution than this one. We are eager to work with start-ups to make real progress in the battle against inequality.”
Chris Goulden, Deputy Director of Policy and Research at the Joseph Rowntree Foundation, said: “Reducing the cost of essential goods and services is critical for solving poverty in the UK. The poverty premium costs low-income households on average £490 a year. With higher inflation and low wage growth, tackling these premiums is vital for families struggling to make ends meet. This fund is an important step towards finding viable solutions to reducing extra costs faced by those on low incomes.”
Wayra Fair By Design is the first step in the Fair By Design Fund’s ambitious programme to reduce or even eliminate altogether the UK’s poverty premium by developing and supporting companies that successfully tackle specific areas of poverty, including issues relating to energy, insurance, borrowing, transport and food.
The Fair By Design Fund will be managed by Finance Birmingham and Ascension Ventures, bringing nationwide reach and infrastructure for companies looking for funding in this space. The fund will invest in companies seeking funding from Seed through to Series A and beyond, and will share Finance Birmingham and Ascension Ventures’ investment philosophy, which seeks deal-flow and co-investment opportunities from other funds, VCs and angel investors.
Jean de Fougerolles, CEO of Ascension Ventures, said: “From the moment we first spoke to Big Society Capital and the Joseph Rowntree Foundation about this initiative, we knew it was something we wanted to be involved with. When we understood just how many people in the UK are affected by the poverty premium, we knew that a fund like this has the potential to change lives. We are excited to get going by backing entrepreneurs that are building innovative products and business models that can put some of this £3.8 billion annual premium on the poor back into the hands of the people that need it most.”
Open Future_ North is a new acceleration and co-working space designed to scale young digital business in Oldham and across the Greater Manchester area. Building work on the new facility started in September 2016 and is part of a £1 million investment by Oldham Council to help businesses thrive in the town’s Independent Quarter. The hub’s primary purpose is to help entrepreneurs in the Greater Manchester area develop scalable new tech businesses, which in turn will create jobs and foster economic growth.
Jean Stretton, Oldham Council Leader said: “I’m delighted that this fantastic facility is now officially open, it’s looking great and there’s a real creative feel to the place. It’s so important that we help local, grassroots entrepreneurs and this new venture will bring together the talent, inspiration and investment needed to create a launch pad for new businesses, as well as energising and supporting the local economy. Wayra’s initiative to tackle the poverty premium is commendable and will help to ensure that those in poverty get a fair deal. I shall be watching how the programme develops with interest.”
The launch of Open Future_ North forms part of a wider strategy, led by Telefónica Open Future_ – a global innovation and entrepreneurship network – to work alongside local and regional partners to re-invigorate entrepreneurial ecosystems, energise local economies and democratise entrepreneurship.
Wayra UK currently supports over 25 companies across four UK sites in London, the Midlands and Greater Manchester. Wayra UK successes include WeFarm – a peer-to-peer knowledge-sharing platform for small-scale farmers around the world addressing anything that can improve their lives – then making it available through any device, anywhere, even the most basic mobile phone. It has been described as ‘The Internet for people with no Internet’.
Notes to editors:
The Fair By Design Fund will invest in a combination of Community Interest Companies (CICs) and charities, as well as private limited companies, including tech businesses. These ventures will be tackling the Poverty Premium primarily across these broad focus areas:
- Energy: This area is focused primarily on electricity and gas. In most homes, energy is used for heating, cooking, lighting, electrical products, and heating water, with heating responsible for most energy consumption in the home. Low-income households often pay more for the energy they use, for example, through pay-as-you-go meters or by not switching suppliers.
- Finance: This area is focused on the problem lower-income consumers have accessing money and the management of everyday credit and savings. Everyone requires access to credit at various times and in differing amounts, especially low-income consumers, due to their smaller income and lack of savings. Often, low-income consumers pay more for their financial services, such as payday loans and cashing cheques early.
- Insurance: This area is focused on the problem lower-income consumers have accessing insurance. For example, there are few ‘no-frills’ insurance products suitable for low-income consumers. These consumers often also live in deprived areas, which may also be higher crime areas, and therefore might incur higher insurance premiums. There is crossover with the geo-based premiums described below.
- Geo-Based: This area covers a wide basket of costs that are imposed, or difficult to prevent, due to someone’s geographic residence. This covers food, insurance, transport, though this list is not exhaustive. Digital Exclusion can be included in this category; low-income consumers may not have access to the Internet, or be confident using it, making them unable to access online services to reduce household costs. This could range from shopping online to comparing insurance products.
Wayra UK is part of Telefónica Open Future_, the open innovation programme that integrates the different initiatives of the whole Telefónica Group related to entrepreneurship and innovation.
Wayra UK gives direct funding, acceleration and pre-acceleration services (such as co-working space, connectivity services, mentoring, access to Wayra UK’s network and knowhow, training in entrepreneurship and business skills) to selected start-ups. Since its launch in 2012, Wayra UK start-ups have raised over $125m in third-party investment.
Wayra UK has partnered with some of the world’s leading organisations to invest in a number of verticals that help generate growth, create positive societal impact and fuel innovation across a number of industries. These include Velocity Health with Merck Sharp & Dohme Limited (MSD), a global healthcare company transforming healthcare; ASOS – one of the world’s leading fashion destinations for 20-somethings – which is developing technology that can make the ASOS experience even better for its 11 million customers around the world; and Government Communications Headquarters (GCHQ), through the GCHQ Cyber Accelerator.
Wayra UK also works alongside local and regional partners to reinvigorate entrepreneurial ecosystems, energise local economies and democratise entrepreneurship. Start-ups in the Greater Manchester area have the opportunity of joining Open Future_ North, powered by Wayra UK, which is a new digital enterprise hub and pre-acceleration programme supported by the Oldham Council. In Birmingham, start-ups have access to a 2,500 square foot space within Open Future_ Midlands, powered by Wayra UK, at the Serendip® Smart City Incubator.
Telefónica Open Future_
Telefónica Open Future_ is Telefónica´s global platform designed to connect the company to entrepreneurs, startups, investors and public and private partners around the world to capture innovation and business opportunities. Its goal is to support talent at all stages of growth through a comprehensive model for acceleration that is designed to connect talent with organisations, investors and companies.
The programme incorporates all of Telefónica Group’s open innovation, entrepreneurship and investment initiatives (Think Big, Talentum, Crowdworking, Wayra, Amérigo and Telefónica Ventures) through a global network that is open to participation by external partners that wish to develop their own entrepreneurial and investment strategies, and connect to large corporates.
To date, more than 51,000 proposals have been analysed, over 1,600 startups have been accelerated, and over 700 invested in. Telefónica Open Future_ is present in 17 countries and has committed to investment, with its partners, a total of 445 million euros.
More info: https://www.openfuture.org/en
About Big Society Capital
Big Society Capital is a financial institution with a social mission, set up to build the social investment market in the UK, so that charities and social enterprises can access appropriate repayable finance to enable them to grow, become more sustainable and increase their impact on society. It is doing this by building a diverse social investment market: encouraging investors to lend or invest money to achieve a social as well as a financial return.
Since it was set up as an independent organisation in 2012, Big Society Capital has signed over £340 million in investments to specialist organisations who lend to charities and social enterprises.
To find out more, please visit www.bigsocietycapital.com.
The Joseph Rowntree Foundation
The Joseph Rowntree Foundation is an independent organisation working to inspire social change through research, policy and practice. In September 2016 it launched a major strategy to Solve Poverty in the UK. For further information go to https://www.jrf.org.uk/solve-uk-poverty
Ascension Ventures backs exceptional entrepreneurs with big visions – providing capital, our network, and expert mentors to grow scalable businesses. Our focus is on supporting UK businesses from Seed to Series A. Venture capital in tech & digital investments is constantly evolving and requires a specialist approach and extensive sector insight to identify and progress innovative enterprises. Since 2013 we have invested, across 4 distinct funds, in over 40 early stage companies, including a £6m Midlands Fund in partnership with Birmingham City Council. We have a rigorous investment evaluation process and are highly selective in putting forward opportunities for investment from our funds.
Finance Birmingham is an Alternative Investment Fund Manager that provides existing SMEs around England with affordable and flexible finances to support potential business growth and development. Our committed and experienced team are here to support businesses within a variety of industry sectors, combining approachability with professionalism and ensuring they follow a flexible and straightforward process.
Owned by Birmingham City Council, our well-developed public-private partnership means we bring together the industry experience of private sector experts and the public sector drive to support innovation, job security and growth. Launched in 2010, in the wake of the global meltdown, we started out with £10million funds under management to provide new channels of investment for SMEs. We now have regional and national funds under management, which have rapidly grown to £0.67billion in just 6 years.
Norval Scott, Head of PR and Communications, Wayra UK and Telefónica Open Future_ (UK): e: firstname.lastname@example.org m: +44 (0) 7860 760 841