Dreamr CEO joins fight to eliminate 'poverty premium'
Mylo Kaye, CEO of Manchester-based app developer Dreamr, has been selected to join the investment committee of the Fair by Design Fund.
The new fund, worth up to £20 million, has been launched to invest in ventures which can disrupt the energy, finance and insurance markets and provide alternative services to millions of people on low incomes hit by the poverty premium.
There will be only five independent members of the investment committee, including Kaye, all of whom have been selected for their experience and credibility in the investment/social investment world.
“It’s an honour to have been selected to join the Fair By Design Fund investment committee,” Kaye said.
“I am dedicated to supporting those who are less well-off and feel this is a great cause and the fund is dedicated to making a real difference and I am proud to be part of it.”
PODCAST: Wayra Fair By Design opening
Fourteen million people live in poverty in the UK, almost one in five of the population. But people already struggling face a poverty premium – having to pay more for essential goods and services, such as their energy bills, for credit or their food. On average, these extra costs add up to £490 a year and can total up to £1,190 for some households.
The Fair By Design Fund aims to eliminate the poverty premium within 10 years. Backed by the Joseph Rowntree Foundation, Big Society Capital, Ascension Ventures, and Finance Birmingham, the Fair By Design Fund will invest in companies from Seed through to Series A and beyond.
The partnership will unveil five start-ups from an accelerator programme, which will all benefit from funding and mentoring while they develop innovative solutions to the premium:
- Global-365 - Descreasing the cost of pre-payments for gas, electricity and heating and in doing so simplifying the process and methods of top-up making. SMARTprepay is the first system with the technology and sophistication to finally offer price parity between prepayment and credit customers.
- JobSkilla – a tool that helps unemployed people find free skills training, and connect training organisations to candidates in deprived areas.
- We Are Digital - A project to help people to manage their finances, find the best deals and provide training for financial management.
- Bean - A platform for consumers to understand their spending on recurring payments. Helping people save money and cancel unwanted subscriptions or re-negotiate lower fees on everyday bills.
- Credit Kudos - Credit Kudos gathers information using your online banking to determine your suitability when applying for financial products. Credit Kudos aims to make credit scoring fair and transparent.
The Fund has £9m to deploy and is seeking to increase this to £20m over the next 12 months.
It will invest in solutions to four key areas of the premium:
- Energy - Low-income households often pay more for the energy they use, for example, through pay-as- you-go meters or by not switching suppliers. 5.8 million low income households pay an extra £317 a year for gas and electricity because they are stuck on pay-as-you-go tariffs or unable to switch to a cheaper provider.
- Finance - Unable to get credit elsewhere, those from low income households often rely on payday loans – which are much more expensive than mainstream alternatives, such as paying £540 over the odds for a doorstep loan because you can’t access mainstream credit or an additional £120 for a payday loan
- 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.
- Place-based premiums - Almost three in four low income households pay extra because of where they live. For example, not having easy access to a supermarket costs an estimated £266 per year.