- Through its Venture Fund, UNICEF has invested in 100 projects in 57 countries to find innovative new solutions to local challenges;
- To take advantage of the potential of emerging technologies in the humanitarian sector, investments must involve local teams and aim to return the benefits to the masses;
- Projects must have clear KPIs and the projects invested in must be diverse.
On the surface, a children’s aid agency and the fields of blockchain, drones and data science appear worlds apart, but change is a constant across these varying contexts. Innovation is critical to ensure the most vulnerable communities across the globe are reached and UNICEF, through its Venture Fund, is exploring possible futures and taking advantage of emerging technology to solve local challenges faced by children and young people in more than 190 countries.
In the past five years, UNICEF has invested in 100 projects in 57 countries with the potential to positively impact their communities. As the fund is the first of its kind, providing support in both US dollars and cryptocurrency, we have identified some essential lessons to support organizations investing in humanitarian tech:
1. Support local teams to solve local challenges
The development of technology requires an intentionally crafted solution that understands and considers all of the factors local to where it will be implemented. Indeed, assessing the team behind the start-up is as equally important as assessing the product.
Will the team be able to execute the idea? Will they grow it? Will they iterate when needed or adapt to changes in the environment easily?
Start-ups must understand humanitarian problems from the perspective of a local to develop effective solutions. They must convey that their solution is relevant to the landscape and engage and receive buy-in from local stakeholders and networks. Potential investees must demonstrate: an understanding of the problem, the ability to tailor a solution in line with that need and the ability to engage organizations or people in the system to attest to its value.
2. Create public goods for the masses
With equity-free investments, the return is technology that can benefit the masses.
Products developed during the investment period must have an open-source licence. This creates interoperability between various solutions, allows start-ups to benefit from contributions from others, and supports the expansion of access to software and hardware to many communities.
UNICEF’s fund typically invests in open-source technologies, like drones, data science, extended reality or blockchain in cohorts, and provides start-ups with another layer of support during their investment year. Community members can build on and improve each other’s open-source projects, enable knowledge sharing and introduce diverse skills to the projects. The teams also benefit from a financial perspective by reducing the need and cost of paying product developers. Taking advantage of components that are open-source (and interoperable) can significantly reduce overall cost and establishes a framework that allows the project to continuously be improved and upgraded.
3. KPIs are important; real-time data is better
As with any fund, metrics must be used to gauge the success of the investment, but identifying the right metric for the project is critical.
Relevant metrics are crucial to accurately exhibit the results of the fund as a whole, as well as the outcome of each portfolio investment. However, because each investment is a growing entity, it’s equally essential to consistently gather consequent data points to track and assess the start-ups at any point in time.
UNICEF measures its return on investment by the open-source technology that’s generated through its investments. To support this evaluation process, we use a framework that enables us to collect the data relevant to indicators once the technology is generated, as well as on the financial sustainability that allows for the development of such technology.
4. Invest in a diverse group of founders
Diversity of founders is about gender and nationality, as well as the representation of different experiences. Both acquired and inherent diversity play a part in making a business more successful; acquired means skills that an individual is born with (gender or ethnicity, for example); inherent is those skills gathered through experience. Particularly as it relates to tech products, having more diverse teams means that products will be more reflective of the end users because of the array of experiences that brought to the table.
The fund is fully committed to diversity of investment based on gender, industry and technology. In 2019, we acknowledged that we had fallen short in supporting a diverse group of founders and launched the Smart Investing initiatives. Currently, 30% of our current investments are women-led. While this number is better than the industry average, it is not enough. We aim to ensure that, in the future, half of our investments are women-led. In the longer term, the fund will look to bring our portfolio balance of women founders to 50% overall.
5. It’s not just about the money
For a start-up, financial investment is paramount, but mentorship, visibility and access to networks are also invaluable.
UNICEF provides start-ups with consistent access to a variety of mentors, including business mentors, technical advisors, open-source experts and programmatic specialists, to consult with and learn from. When companies are chosen for the fund, the process begins with a needs assessment to help us tailor the mentorship experience to each start-up and determine custom metrics to track through the investment period.
Mentors help founders hone the market for their products, discovering what their users want next and how to meet this sustainably. The start-ups find support and fresh perspectives when facing challenges or charging a new path. Even more than that, data shows that start-ups with a strong mentorship network are often the top performing projects. The Venture Fund’s goal is to offer start-ups the right combination of skills to continue to prosper and grow into open-source digital public goods (DPGs) that will benefit society at large.