UNICEF is investing up to $100,000 each in six companies that want to use blockchain for social good.
More than 100 companies applied to receive financial aid from the UNICEF Innovation Fund. The companies that made the cut spanned Argentina, Mexico, India, Tunisia, and Bangladesh, seeking to solve problems in the areas of youth social services, prescription drug distribution, and vaccine supply-chain management.
In selecting the companies, UNICEF followed “a pretty standard VC assessment process,” Christopher Fabian, the cofounder of UNICEF’s Innovation Unit, told BREAKER. That meant looking at the companies’ founding teams, determining their market fit, and performing due diligence. Beyond that, UNICEF attempted to find companies that fit together and could become “part of a much larger learning initiative,” said Fabian. Lastly, UNICEF sought out executives who “don’t have the ego associated with some founders that makes them inflexible to change.” Considering blockchain’s relatively nascent status as an applied technology, openness to change will be key for these new companies.
The larger learning initiative Fabian referenced will include a one-week boot camp for the company’s founders set to take place in New York at the end of January. “We see the potential to combine some of them to form a larger set of products,” said Fabian. Though they all have different goals, Fabian believes these companies all take advantage of blockchain’s key applications—transparency, accountability, and financing.
Atix Labs in Argentina seeks to create a transparent funding platform for mid-size enterprises. In Mexico, Onesmart aims to crack down on the misappropriation of funds meant to go to children’s services, and Prescrypto wants to create a platform that makes it easier for people in developing countries to get prescription medication.
Statwig, located in India, wants blockchain to ensure efficient supply chains for vaccines. Tunisia’s Utopixar is working on a collaborative platform that lets groups make communal decisions, and Bangladesh’s W3 Engineers aims to create better mobile networking for migrants and refugees.
There are, of course, the usual obstacles in implementing blockchain-based ideas. “Lack of local knowledge and lack of real scalability of most blockchains,” said Fabian, make this funding cohort more challenging than UNICEF’s usual candidates in fields like data science. “These companies are a bit earlier stage than we would like, honestly,” he said. “But that’s fine. We’re happy to absorb that risk.”
Fabian also isn’t thrilled about the gender ratio of the cohort’s founders. One of the six is female, a smaller percentage than their larger investment portfolio, which includes robotics, VR, and data science companies. About 30 percent of those founders are female.
Blockchain isn’t quite ready to solve the global social issues that these companies seek to address, said Fabian. They need time, “a year, or maybe 18 months.” The work that remains is to establish better user interfaces for blockchain applications, ones that require a low threshold of blockchain understanding. Right now, it’s difficult for people in highly developed nations, let alone places where technology is even less accessible, to wrap their heads around blockchain and cryptocurrency.
UNICEF has been experimenting with blockchain tech since 2015, when it launched the $17 million UNICEF Venture Fund and began some small-scale experiments using blockchain as an identity solution. In 2017, it led a hackathon in Kazakhstan to figure out if smart contracts could ease payments between UNICEF and its vendors, and invested in a South African startup called Trustlab, which was building a blockchain-based app to track children’s attendance in early childhood-development centers.
Once user interfaces become more accessible, Fabian sees cryptocurrency’s potential for getting projects funded. People can mobilize resources more quickly, he said, when they’re funding in crypto—not to mention the potential resource pool of the newly crypto wealthy. However, it’s unclear how many people who fall into that category are enthusiastic donors, and with the prices of crypto way down from 2017 highs, this funding avenue appears less promising.
And yet, Fabian thinks tokenomics can help facilitate microeconomies, like with the distribution of prescription medication and WiFi access. Then there’s the drier use case of “international organizational efficiencies,” wherein blockchain tracks the workflow between government groups and external organizations and companies.
“If you zoom out a little from these six companies,” Fabian says, “they’re all about using the fundamental aspects of public permissions of blockchains in new markets.”