As Ascension Ventures announces its £5 million fundraise extension to Fair By Design’s existing £10 million Fund, we are delighted to share background on why we invested in this extension, having first established the Fund with the Joseph Rowntree Foundation in 2017.
Through our venture investments, we are supporting an ecosystem that nurtures and scales innovative ways of tackling social problems. A core part of our strategy is to support impact-dedicated funds to scale high impact startups.
Set up in 2017, the Fair By Design Fund is a great example of impact best practice in venture. Over the past three years, the Fund has invested in 15 tech-for-good startups that are focused on reducing key aspects of the Poverty Premium. The Poverty Premium is the £478 extra each year that people in the UK on the lowest incomes pay for essentials – such as electricity, gas and insurance - due to market failures that increase the cost of these services.
These 15 startups represent a range of innovative models focused on addressing these market failures and to date have reached over 750,000 customers.
Fintech startup Wagestream is on a mission to improve the financial health of people in work, by giving them more power over their pay with a set of tools to track, access, save and manage their wages in real-time. Partnering with organisations to offer it as ‘the ultimate employee benefit’, the service breaks apart the outdated pay cycle and completely re-builds workers’ relationship with their salary, helping them avoid predatory forms of credit in the process: 77% of those using it now feel less financially stressed, 38% have avoided going into their overdraft and 43% have avoided using a payday loan. Wagestream is already Europe’s market leading provider in this fast-growing new industry, with the service available to almost half a million employees – and 26 NHS trusts.
Other startups in the portfolio include Switchee, the UK’s first B2B smart thermostat and asset management platform for large social landlords and Credit Kudos, a challenger credit reference agency that harnesses open banking data to measure creditworthiness in a fairer way.
This fundraise will enable Fair By Design to increase the number of startups supported by the Fund, giving greater scope for exploring and tackling Poverty Premiums, both by deepening work on existing premiums (such as financial services and energy) and making investments in a wider range of premiums (such as food and transport).
We are delighted to be investing alongside a broad range of investors, many that are new to the Fund, including Nationwide Building Society, the lead investor in this round; charitable foundations such as Esmée Fairbairn Foundation and The Places Foundation; two family offices and The University of Edinburgh.
“The University of Edinburgh is committed to investing for positive impact - with the Poverty Premium a key challenge we are delighted to be a partner in this important and innovative fund. Fairness and opportunity are at the heart of a genuinely sustainable society and the need for new models to support those who can least afford essentials is urgent and important.” Dave Gorman, Director of Social Responsibility and Sustainability at The University of Edinburgh
“We are proud to be a part of this movement which aims to address the Poverty Premium in the UK. As an organisation we’re determined to do all that we can to help customers and communities by tackling the grossly unfair Poverty Premium. There’s such an imbalance when it comes to access to finance and services for some people due to their credit status or financial situation which results in them paying a disproportionate levy on day-to-day services. I’m proud that we’re using our charitable resources to help tackle that.” Marcus Hulme, Director of Places Impact, Places for People Group
We look forward to seeing the Fund invest and scale more innovative models tackling the Poverty Premium, alongside the policy and advocacy work of the campaign, managed by the Barrow Cadbury Trust. Nationwide is launching a startup incubator tackling the Poverty Premium. Please see here for more information. The deadline for applications is 4 April 2021.