Five Blockchain Startups Graduate from UNICEF's Venture Fund
Leveraging blockchain technology in solutions toward financial inclusion, the startups have achieved noteworthy growth and impact
Last year, the UNICEF Venture Fund onboarded 8 new startups developing open source, blockchain-based solutions toward greater financial inclusion. This was the first cohort to receive both USD and cryptocurrency in seed funding; the first cohort with over 50% of the companies being female-founded or –led; and the first cohort that expanded the Fund’s portfolio of investments to Rwanda and Iran.
Of the 8 startups initially onboarded, we are thrilled to see 5 successfully graduate from the Fund and one successful acquisition of a portfolio company.
Throughout the investment period, UNICEF leveraged its vast network to connect the companies to UNICEF’s work in their respective countries and provided technical and strategic support, as part of the technical assistance programme. It has been just over a year since we began collaborating with this cohort, and during that time we helped identify strategic avenues to further support and scale their work, including through pathways for UNICEF itself to benefit from the technology infrastructure developed. We chose each company in this cohort not only because they are building pathways toward financial inclusion, but also because their solution can solve cross-cutting challenges that UNICEF’s programme divisions have identified, such as increasing access to resources, accountability, community engagement, and efficiency of funding flows.
In just over 12 months, we have seen extraordinary results.
The startups also worked with an extensive group of notable partners, customers, and investors. A sample of these collaborators:
- World Food Programme
- Ethereum Foundation
- IDT
- Celo
- Mercy Corps Ventures
- Impact Market
- Flutterwave
- Valora
- Binance
- MoonPay
- Techstars
- Nepal Red Cross Society
Demonstrating sustainability and scalability, another Portfolio Company was acquired this year. Leaf Global Fintech, which developed a virtual bank for refugees and vulnerable populations to enable storage and transfer of assets across borders even without the need for a smartphone, was acquired by IDT Corporation (NYSE: IDT), a global provider of fintech, cloud communications, and traditional communications services. This acquisition will help scale Leaf’s impact to serve even more refugees, migrants, traders, and unbanked people.
During their time with the Fund, Leaf had increased direct access to financial services for 7,000 refugees and members of vulnerable populations, impacting over 40,000 beneficiaries; scaled their solution across 3 countries in Africa; launched an NFT collection of art generated by refugees; and are currently pilot testing a digital microlending platform. We look forward to celebrating their further growth.
Developing in the open for adaptability, scale, and sustainability
This Blockchain Cohort, focused on financial inclusion, further validated the Fund’s hypothesis that developing in the open results in various avenues for scaling, financial sustainability, and global adaptation for digital solutions.
In this vein, this cohort saw a lot of firsts; including a major milestone: 4 out of 5 companies graduating were certified Digital Public Goods (DPGs) by the time of their graduation. Becoming a certified DPG unlocks stronger potential for adoption and deployment of the solution by global stakeholders and enables growth towards becoming a more scalable project focusing on financial inclusion. This result speaks to both the intrinsic capabilities of the companies and the value of the technical assistance and mentorship provided to them by the Venture Fund.
Further cultivating open development, we also oversaw collaborations between companies in the cohort. For example, Treejer partnered with Kotani Pay to provide African planters with a tool to off-ramp their digital assets to fiat currency.
Selecting the companies based also on their ability to solve cross-cutting challenges that UNICEF’s programme divisions have identified resulted in a large-scale pilot opportunity for portfolio company Rumsan, from Nepal. Together with the UNICEF Office of Innovation and UNICEF Nepal, the Rumsan team will pilot their blockchain-based solution, Rahat, to manage cash and voucher assistance (CVA) in Jaleshwor, Madhesh Pradesh in Nepal. Rahat aims to strengthen humanitarian aid efforts by building greater financial inclusion and increased accountability and transparency throughout the cash transfer process. Pilot opportunities with UNICEF offices all over the world have proven to be a key pathway to growth and scale for portfolio companies, and we look forward to sharing the outcomes of the pilot over the coming months and demonstrating the value that blockchain can bring to humanitarian and emergency response programmes globally.
Here are the companies' milestones, impact, and growth over the course of the investment period.
BX Smart Labs developed Bloinx, a decentralized app — or dapp — that facilitates the administration of savings communities, or as they are called in Mexico, tandas (a savings tool that makes it easier for low-income populations to cover their needs). Payments will be done on the blockchain, allowing savings communities to be built regardless of the location of the users. The smart contract will automate the payments and withdrawals in each period, ensuring the users receive their funds.
Results to date
- Continued version improvement through user testing, including more structured contracts with events to map on the blockchain and a token reward system
- Conducted pilots with 120 users and collected user feedback
- Completed production of three videos to explain the product to users
- Won 1st place, LATAM Prize, in Celo’s Make Crypto Mobile Hackathon
Kotani Pay developed a platform that enables users to off-ramp from crypto to fiat currency using a simple interface that does not require internet connectivity or a bank account. Many communities in Africa are locked out from the benefits of blockchain and cryptocurrencies, simply because the technology was built for smartphone users with strong connectivity. Kotani Pay was built to bring financial instruments and services to those that do not have access to the Internet or have the capital and credit standing to open a bank account, thus increasing financial freedom.
Results to date
- Certified Digital Public Good
- Processed over 31,000 transactions, reaching over 15,000 beneficiaries, bringing increased financial inclusion to marginalized communities in Africa
- Integrated their solution with various partners (partners include mobile wallets providers and implementing partners)
- Raised $800k from a diverse group of investors during their Seed Round
- Ran pilots with multiple partners, including WFP and Mercy Corps Ventures
Rumsan developed Rahat, a digital cash and voucher assistance (CVA) management system. It uses mobile-based blockchain tokens to manage and transparently monitor the flow of aid transactions by humanitarian agencies for emergency response and recovery programmes, especially in hard to reach areas.
Results to date
- Completed the development of the digital CVA management system, enabling humanitarian aid efforts by building greater financial inclusion and increased accountability and transparency throughout the cash transfer process
- Ran a series of mini-pilots reaching 5,000+ beneficiaries
- Certified Digital Public Good
- Commenced a large scale pilot with the UNICEF Nepal Country Office
Treejer is an open protocol connecting funders to rural planters worldwide. It uses smart contracts, DeFi and NFTs to empower local communities who protect forests.
Results to date
- Certified Digital Public Good
- Launched a complicated protocol with near 100% test coverage, resulting in a more transparent climate action through financial inclusion of rural communities.
- Successful Genesis Launch of their first 10,000 trees (approximately 20 ETH)
- Raised $74k in two quadratic crowdfunding rounds via Gitcoin
- 100k trees committed by planters, 10 countries with active planters, 1400+ contributors supporting on Gitcoin, and 200+ planters from grassroots communities.
- Working in close collaboration with the National Forest Organization in Iran and one of their recent large-scale forest projects in the Zagros region is showing great results.
Xcapit developed a self-custodial, smart crypto wallet with features including a wealth management investment planner, access to financial services such as interest-bearing accounts, low- and middle-risk investment products, and loans, and training modules to upskill users’ financial and digital literacy.
Results to date
- Certified Digital Public Good
- ISO 27001 certification
- Completed the development of a crypto wallet and features including a wealth management investment planner, investment product support, and low risk investment product, helping to tackle the lack of access to financial products and services in the region
- Reached over 500k beneficiaries with their solution and the crypto wallet has over 50,000 users across 85+ countries
- The team has raised a total of $1.8 m USD in follow-on funding and is actively seeking to raise an additional round
- Xcapit linked with Pulenta, a charitable organization, enabling users to donate part of their profits or residual funds to social causes through a donation module.
- UNICEF now a recipient in the donation module.
- Won in the Scale Up Venture category in the Santander X Global Challenge, Blockchain and Beyond
Insights from the Cohort
As the Venture Fund continues to spearhead the explorations of the value that Blockchain can bring to UNICEF’s programmes globally, we’ve collected some of our learnings from this cohort:
- NFTs NFTs NFTs; Almost every company is exploring NFT use cases. The challenge is to identify the hype vs. the true value added.
- Since we invest in early stage startups, the business models tend to evolve iteratively. We have seen at least 3 of our startups evolve to be a multi-chain solution, leveraging unique opportunity each chain has to provide (for e.g. TX fees, native audience, smart contract possibilities etc.)
- Many of our startups play in areas with no existing playbook or success formula. Therefore, we saw strong community engagement from our startups – for e.g. fast piloting in the real world, opening up bounties for contributions from public, constant engagement in social media, to leveraging crowd sourcing translation platforms, etc.
- This cohort has benefited from unique opportunities for additional follow-on funding; ie quadratic crowdfunding. We will continue to explore strategic pathways for our portfolios to benefit from this.
- The technology in this space moves FAST. Both the Venture Fund and investee startups have a responsibility to keep up with the protocols and market trends and adjust accordingly.
- Crypto fluctuations can have considerable implications on the companies’ project scope and investment outcomes for UNICEF, this year alone we’ve seen crypto value fluctuate more than 50% in a short time period. As a team we continue to monitor what this means for our investments.
- Having a cohort thematically aligned allows for increased cohort collaborations and for UNICEF to further benefit from the digital infrastructure as a way to amplify the underlying technology.
- UNICEF is one of the world’s biggest players in Cash Transfer Programming (CTP) in the humanitarian and social protection space transferring millions of dollars to thousands of people worldwide. There has been global interest in the recent past about the application of blockchain technology to bring in improved efficiencies, reduced costs and most importantly transparency and auditability to the space. One of the startups from this cohort has developed a blockchain based multi-party CTP coordination platform which is currently being piloted for flood relief and COVID relief use cases in Nepal. We hope to gather valuable lessons in how a blockchain based approach compares to traditional cash transfer paradigms (in terms of cost and time saved, field implementation learnings etc.) to inform us about next pilots and/or scaling approaches.
