By Sunita Grote, Ventures Lead, UNICEF Office of Innovation & Thomas Davin, Director, UNICEF Office of Innovation
Witnessing the scale of the global pandemic has shown us a paradox: as schools, businesses, and borders closed, our lives went online, children and young people turned to online learning; companies shifted to remote working; and our gatherings with family and friends crossed time zones over video conferencing. We turned to the digital world to deliver our groceries, discover new treasures and experiences, and manage our finances and futures.
The pandemic instigated a mindset shift and accelerated the digital future — but not for the entire world. Half of the world’s population doesn’t have access to the internet. For many children around the world, the pandemic simply stopped access to lifesaving and essential services like education, healthcare, protection from violence— and the number of children living in multidimensional poverty has soared to approximately 1.2 billion due to the COVID-19 pandemic. It is also estimated that 142 million more children are now living in monetary poverty as parents lose their jobs and income sources.
1.7 billion adults still lack the most basic financial services, leaving them unable to adequately access and invest in their health, education, entrepreneurship – and the chance to protect themselves and their future in the wake of another crisis.
We need to build the infrastructure and systems that enables the most marginalised communities to access digital services. This means closing the current gaps in access, financing, capacity and priority to develop valuable solutions that leverage the latest technological breakthroughs.
Closing the gaps to build inclusive digital economies
UNICEF’s Innovation Fund aims to close these gaps by financing early stage, open-source emerging technology with the potential to impact children on a global scale. The Innovation Fund has grown into a $35M+2267ETH+8BTC pooled fund that has invested in 118 solutions across 57 countries, and provides product and technology assistance, support with business growth, and access to a network of experts and partners. Beyond building solutions, the Fund sets out to diversify the community of entrepreneurs that benefits from capital. We put special emphasis on supporting solutions built by the traditionally underrepresented in venture capital – to date, 40% of our investments are in female-led companies. We exclusively support open source solutions to ensure that these become digital public goods, opening access to them and the value they generate to communities around the world.
The Fund’s investments have generated solutions supporting the global response to COVID-19. These include, for instance, the HealthBuddy chatbot that provides information and addresses misconceptions in 7 languages, built on Ilhasoft’s platform Bothub. UNICEF’s Magic Box platform is able to analyse and develop models based on data provided to us by our partners, predict the spread of COVID-19 and analyse the impact of social distancing measures on children and their families in developing and emerging markets. UNICEF focused our efforts on developing and accelerating solutions that can provide services to and insights on markets that are often neglected by the rapid pace of technological development.
Leveraging the latest technological breakthroughs for children
Blockchain-based solutions allow us to rethink how problems are solved.The technology allows for greater transparency and efficiency in systems, better coordination of data across multiple parties, and the possibility for greater community engagement in decision-making that is more difficult with traditional technologies or systems.
In a crisis that required a shift to digital services, we saw blockchain and cryptocurrencies provide value to the COVID-19 response.
We have seen UNICEF’s leadership in establishing a crypto-denominated fund provide new opportunities to new partners, committing resources toward innovation, including for the COVID-19 response, and toward COVAX efforts. Chainlink, a decentralised oracle network, contributed to UNICEF’s Innovation Fund and will provide technical expertise to investment companies around smart contracts. Binance Charity donated $1 million in crypto to support UNICEF’s global vaccine rollout and released limited-edition NFTs with proceeds going towards COVAX.
Blockchain-based solutions also have the potential to improve the efficiency of the response. Our portfolio company StaTwig is piloting its blockchain-based app by partnering with the Government of India to track and improve the delivery of rice, supporting their effort to secure food for millions living in poverty – a need amplified by the onset of COVID-19.
Our newest cohort of investments is building solutions toward greater financial inclusion. The startups are exploring solutions to make payments to frontline workers more efficient, facilitating cross-border transfers, developing community currency, improving access to saving and lending services, and more. This is the first cohort to consist of majority female-led companies; and expands our portfolio to Rwanda and Iran.
Improving transparency and efficiency of our investments
This cohort is also the first to receive equity-free investments in USD and or cryptocurrency through UNICEF’s CryptoFund – a new financial vehicle allowing UNICEF to receive, hold, and disburse cryptocurrency – a first for the UN. The CryptoFund enables us to apply the benefits of blockchain to our own operations and improve our efficiency and transparency at a time when we need to find ways to achieve more with limited resources. We can now make investments in under a few minutes for under a few dollars, all while being fully transparent around where funds are being used.
This flexibility and speed allowed UNICEF to quickly disburse funds and invest further in eight Innovation Fund companies developing features to mitigate the hardships of COVID-19 on children and youth. One of the companies was Somleng (Cambodia), which needed to quickly scale its low-cost Interactive Voice Response Platform to work with the government to send vital information about COVID-19 — and eventually run its Emergency Warning System. We are now working to bring this flexibility and speed to our government and other public partners – by building and offering digital public goods to manage and track cryptocurrencies more efficiently through our Juniper suite of tools.
Building the new digital economy
We now all share the experience of a global pandemic and resulting lockdowns, and those of us with access to digital services found ourselves still interconnected in the “new normal” and able to participate meaningfully – and benefit from – the digital economy. Decentralised systems are generating unprecedented revenues and returns in the current market – with benefits currently going into the hands of few.
COVID-19 has proven that only when access to the benefits of digital systems is universal, can we respond quickly and prepare for – or stay afloat and thrive during – the next crisis. Imagine a world where solutions, data, financing, and talent are instead accessible and more evenly distributed as public goods; where scarce resources are channeled towards solutions that are designed to bring both financial and social value for all.
Emerging technologies and digital public goods offer an incredible possibility to realise this inclusive, accessible world – where the digital economy is distributed so that everyone, even the most vulnerable, holds a key to safety, resiliency, and future growth and opportunities. We must venture into supporting untapped, underrepresented communities in a transparent way so that, together, we can build a digital future for every child and every young person to survive and thrive.