Tech accelerator to tackle poverty premium launches
A new generation of tech companies will seek to tackle the high costs often faced by people living in poverty.
Wayra Fair By Design, a major acceleration programme that launches in Oldham today, will support up to seven start-ups a year which 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.
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.
“It should not cost more to be poor,” said Gary Stewart, director of Wayra UK. “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.”
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.
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.”
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.
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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.”
Jean Stretton, leader of Oldham Council, 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.”
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.