Telefónica-owned Wayra UK opens its latest tech accelerator programme this week, supported by a new multi-agency fund worth up to £20m with a focus on helping eliminate the ‘poverty premium’ by 2027. Wayra’s Open Future_ North facility is based in Oldham.
A new tech accelerator programme with a focus on tackling UK poverty opens its doors in Oldham, Greater Manchester, this week – confirming the news of a fund supporting the programme reported in DigitalAgenda last month.
Wayra Fair By Design will support up to seven tech startups a year across the north, based in the town’s Open Future_ North accelerator. It will back startups seeking to tackle the ‘poverty premium’, which sees people from low-income households paying more for the same products or services – including energy, insurance, borrowing, transport and food – than those who are better off financially.
“It should not cost more to be poor,” said Gary Stewart, director of Wayra UK.
The accelerator is backed by a fund put together by early-stage VC firm Ascension Ventures and Birmingham City Council-owned Finance Birmingham, along with the Joseph Rowntree Foundation and Big Society Capital. Ascension has estimated the Fair By Design fund at £15m, though Wayra says the fund could raise £20m, with £8m ready to deploy now.
The fund will invest in a combination of community interest companies (CICs) and charities, as well as private limited companies, including tech businesses. It will invest in ventures seeking funding from seed through to series A and beyond.
People in low-income households can be reliant on expensive, high-interest payday or doorstep loans because of a lack of assets, a lack of information to generate a credit score, or a poor credit rating. Wayra says startups developing solutions that open up more affordable credit options will be ideal candidates for the programme.
A 2016 report by the University of Bristol revealed that the poverty premium paid by low-income families is £490 per year on average. Joseph Rowntree Foundation research backs government statistics that say a fifth of the UK population is now living in poverty,
Startups accepted to the programme will receive approximately £70,000 in cash and services, including bespoke support from investors, mentors and coaches. It will also provide opportunities to work with Telefónica and its partners and have full access to working space at Open Future_ North.
JRF deputy director of policy and research Chris Goulden said: “Reducing the cost of essential goods and services is critical for solving poverty in the UK. 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.”
It will be driven by Finance Birmingham and Ascension Ventures’ investment philosophy, which seeks deal-flow and co-investment opportunities from other funds, VCs and angel investors.
Ascension chief executive Jean de Fougerolles said: “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 £3.8bn annual premium on the poor back into the hands of the people that need it most.”
Open Future_ North (the Duke of York is pictured at a recent visit) is designed to scale young digital business in Oldham and across the Greater Manchester area. Building work on the new facility started last September and is part of a £1m investment by Oldham Council to help businesses thrive in the town’s Independent Quarter.
Oldham council leader Jean Stretton said: “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 says that it 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”.