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Mobile Money, African Start-ups and the SDGs
Financial inclusion is an intermediary target in 8 of the 17 SDGs. Consequently, igniting progress towards the SDGs requires a large-scale push to increase financial inclusion. This blog explores how both start-ups and corporates alike have leveraged the mobile money ecosystem to catalyse progress towards the SDGs. Notably, mobile money is a key enabler of innovations within Future Planet’s impact areas of food security, climate action, education and health.
Igniting faster progress towards the SDGs requires a large-scale push to increase financial inclusion. One channel through which this can be achieved is mobile money. This is technology which allows users to receive, store, spend and send money using just a mobile phone and its SMS signal. In Sub-Saharan Africa, mobile phone adoption is forecasted to grow by 4.3% year-on-year until 2025. With greater mobile penetration comes the potential for sustainable ventures to reach a previously ‘unbanked’ population and achieve an impact on a much larger scale.
Two features of mobile money are particularly salient. First, it provides a safe and low-cost method of saving money. For example, a study in Uganda found that the use of mobile money increased food expenditures per adult by nine percentage points and reduced perceived food insecurity providing valuable liquidity to vulnerable households. Second, mobiles provide a fast and low-cost method of sending and receiving money. In fact, remittances sent via mobile transfer are on average 50% cheaper than traditional methods. Consequently, the well-known mobile payment service M-PESA in Kenya was found to increase per-capita consumption and lift 194,000 households, or 2% of all households in Kenya, out of poverty.
While financial inclusion is an intermediary target in 8 of the 17 SDGs, how have start-ups leveraged the mobile money ecosystem to catalyse progress towards the SDGs? Let’s touch on a few of Future Planet’s impact areas; climate action, education and health.
SDG 13 - Climate Action
Climate change threatens to drive an estimated 100 million people into poverty by 2030. Mobile money innovations plays a key role in mitigating climate risks by helping farmers become more resilient and helping communities that have been displaced by climate shocks. Index insurance, which can act as a safety-net for farmers following climate shocks on their crops, use mobile money to distribute payouts to farmers. In a similar fashion, government-to-person (GTP) payments are often enabled by mobile money. For instance, in 2014, the Government of Fiji partnered with Vodafone MPaisa to disburse assistance to over 32,000 households affected by Tropical Cyclone Winston. In the Philippines, Mercy Corps and BanKO implemented a mobile money programme to distribute financial aid following Typhoon Haiyan in 2013.
Integrating payment technology with climate ventures is nothing new. Alipay, an online mobile and payment platform with over a billion users, launched Alipay Ant Forest in 2016, a mobile app which rewards users with ‘green points’ for undertaking low-carbon activities. For every virtual tree a user plants, Alipay plants a real tree. To date, 500m users have planted 100m trees in arid areas throughout China spanning a landmass of 933km2 (equivalent to the size of 130,000 football fields!)
SDG 4 - Quality Education
Increasingly, mobile technology is being used by EdTech start-ups across emerging markets to enhance and supplement traditional ‘brick and mortar’ schooling, providing better access to primary, secondary and tertiary education or professional development training.
In Africa, collaboration between mobile money and EdTech start-ups is mutually beneficial. Mobile operators have reached the scale that start-ups lack, such that EdTechs can address infrastructure challenges related to delivering and supporting education where conventional models fail or are non-existent, particularly in remote rural areas. On the other hand, start-ups have the local innovation mobile operators need. For instance, Kenyan start-up Eneza Education partnered with mobile operator Safaricom to launch a virtual classroom available on any mobile phone. To date, it has provided over 10 million learners with access to primary and secondary education resources. In a similar purely ‘offline’ offering, Ghanaian start-up Chalkboard Education leverages existing mobile networks to provide access to university courses for disadvantaged students via distance learning using just SMS. In Uganda, a flexible education loan using mobile money wallets and a pay- as-you-go (PAYG) business model is helping parents pay school fees. In households using this product, only 15% of students missed a day of school compared to 24% of students in households that did not use the product.
Deeper, more integrated partnerships between mobile operators and EdTech ventures are necessary to build on these gains to ensure access to quality education can continue to be offered at scale. In this context, the mobile industry has a significant role to play in improving the accessibility, affordability and quality of education in emerging markets.
SDG 3 – Good Health and Well-Being
When it comes to global health, mobile money lowers financial barriers to receiving healthcare by lowering the costs of registering with health insurance, paying premiums, and receiving disbursements. In Kenya, M- Tiba’s mobile health wallet enables health payments, savings and access to credit via mobile money. Since its launch in 2016, it has facilitated 155,000 patient visits to medical facilities and $2m in medical payouts. It also contributes towards disease detection. In Pakistan, providing incentives via mobile money resulted in a 300% increase in tuberculosis detection over one year and a 90% increase in patients adhering to treatment.
A View to the Future
A plethora of rigorous evidence exists on the enabling role of the mobile money ecosystem in progressing the SDGs. Deeper, more integrated approaches are needed between mobile providers, start-ups and investors to capitalise on potential synergies in collaboration. Here at Future Planet, we provide growth financing to scale these innovative solutions. In doing so, we ensure that innovative start-ups can realise their growth potential to ensure a healthier, safer and fairer future planet.
Future Thinking: The Global Security Challenge
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How consumer attitudes will be critical in determining which alternative sources of protein rise to the top
The Green Revolution of the 20th century radically transformed the way we grow our food, allowing farmers to keep pace with increasing food demand following rapid population growth. Global populations are projected to continue to increase to 9.7 billion by 2050 (FAO). Meanwhile, as countries across the world develop and the middle-class expands, there will be a shift in diets that leads to an increase in the demand for meat. Global agricultural practices are thus poised to once again be transformed by a host of new technologies that will allow the sector to adjust to these projected demographic changes. As ever, the preferences of consumers will be critical in shaping which of these new technologies and start-ups will find success in our rapidly evolving food landscape.
GM food – what lessons can be learnt
Humans have been altering the genetics of the food we eat for thousands of years through artificial selection. In the late 20th century, genetic engineering emerged as a technology that allowed the more direct and precise alteration of an organism’s genetics that did not require the use of breeding. The use of genetic engineering in agriculture to produce genetically modified (GM) food has the potential to dramatically improve both crop yield while offering additional health benefits and improving the sustainability of agriculture as a whole.
However, following its emergence, aggressive campaigning against the use of GM food has led to a widespread public mistrust over GM food and perceptions that it is unsafe. While there is little scientific evidence to support these ideas, the rapid nature with which they were spread has led to complete bans being imposed on GM food in many regions of the world. Regardless of whether these decisions are ill-informed, the case of GM food highlights how consumer perceptions and public opinions can rapidly condemn the use of a technology within agriculture to failure. Emerging technologies that aim to offer healthier, more sustainable alternatives to the food we currently eat must work hard to win over the acceptance of consumers in order to avoid being condemned to a similar fate.
Recently, some start-ups have cleverly begun to harness novel genetic engineering technologies to improve crop output without affecting the genetics of the final food product itself, ensuring it remains a non-GMO (genetically modified organism). Our portfolio company, Tropic Biosciences, is utilising the latest CRISPR genome editing tools to improve commercial varieties of tropical crops such as coffee and banana, reducing their susceptibility to disease. Not only will Tropic Biosciences’ technology improve crop output, support local communities and reduce the environmental impact of agriculture, but crucially, it will begin to sway consumer attitudes towards the safe use of genetic engineering technologies in our food systems.
How plant-based alternatives are finding success
Plant-based alternatives are becoming an increasingly more popular option for meat-eaters and as a result, start-ups and companies in this space are thriving. Leaders in the market such as Beyond Meat and Oatly have navigated successful IPOs in recent years whilst Impossible Foods is set to join them later this year with a valuation that could reach $10 billion. The success of plant-based alternatives has been aided by an increased public awareness for the importance of reducing our meat consumption and subsequently reducing our impact on the planet. However, these companies have crucially won over the trust of consumers, ensuring them that their alternative foods are safe. This has included capitalising on the failings of GM food with plant-based products frequently advertising the fact that they’re ‘GMO free’. Having earnt the trust of consumers, plant-based alternatives must now seek to reduce their costs in order to continue to expand and sway more meat-eaters away from their traditional purchasing choices.
Will cultivated meat thrive in a similar fashion?
Start-ups and companies developing cultivated meat hope to mirror the success of plant-based protein alternatives over the coming years. Cultivated meat, frequently described as ‘lab-grown meat’ uses the biotechnological application of stem cells derived from animals to produce cultured meat in a bioreactor. The technology is rapidly evolving with Eat Just leading the way having sold the first lab-grown chicken nuggets in a restaurant in Singapore in the late stages of 2020. Cutting costs down from the hefty $17 that the Just chicken nuggets were sold at will be essential for cultivated meat start-ups to progress. However, more importantly, hard work must be done by scientists, entrepreneurs and investors to inform the public about the safety of cultivated meat in order to ensure it is not disregarded as a spooky, futuristic technology. In doing so, cultivated meat may well become a popular protein alternative to rival plant-based alternatives over the coming decades. The evolution of both plant-based and cultivated meat technologies may be critical for reducing the environmental impact that the meat industry currently has on our planet.
By Tom Barnes
EdTech: Facilitating the Future of Learning
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Zeroing in on Waste
Globally, 90 billion tonnes of raw materials (i.e. biomass, fossil fuels, metals and minerals) are extracted and used each year. By 2060, this figure is expected to double. Our approach to the use of these materials is linear. Just 19% of waste is recycled or composted. The remaining 81% is incinerated or dumped.
To reduce the amount of raw materials being extracted and wasted, we must increase the effectiveness of waste management solutions and integrate waste back into supply chains. This can create value, which currently goes untapped. A recent report estimated that each metric ton of uncollected mixed waste represents an average loss of about $375. Thus, it is not surprising that adopting a global circular economy could create some $4.5 trillion value by 2030.
Fashion, A Case Study:
Fashion is a case in point. Clothing production doubled from 2000 to 2014. Across the same period, the average length of time for which consumers kept each clothing item halved. This rise in demand has placed increasing strain on global raw material supply. Despite this increasing strain, in 2017, less than 1% of material used to make clothing was recycled.
The least sustainable sector of the fashion industry is fast-fashion. With relatively cheap products, the business model aims to allow customers to keep up with current trends. Production processes have to be low-cost in order to make fast-fashion viable; products are often made from a combination of different cheap materials. Such a blend of fabrics makes recycling these cheaper products difficult. These problems are compounded by the volume of clothes produced by fast-fashion companies. With some fast-fashion companies releasing as many as 20 new clothing lines each year, fashionable apparel quickly becomes outdated. Purchased at relatively low prices, and with such short product life-cycles, these clothes are perceived of as being disposable. Indeed, in the UK, 336,000 tonnes of clothes are disposed of in landfill each year.
There is, however, a profound circular shift underway in the fashion industry, driven by consumer demand. In a recent survey, two-thirds of textile sourcing executives said that consumer pressures for sustainably sourced materials would likely become a top factor in their supplier ratings by 2025. As a result of these changing patterns of demand, sustainable sourcing at scale will soon become essential for fashion companies who wish to remain competitive. Recycling and upcycling materials will be the main avenue through which sustainability can be achieved in the fashion industry. Reusing materials will allow the fashion industry, responsible for at least 4% of global greenhouse-gas emissions, to cut out carbon-intensive resource extraction processes.
A Circular Approach:
A circular approach which creates value whilst limiting waste and emissions must be adopted not solely by the fashion industry, but by industries across the board. From food to plastic production, we must reduce our linear approach, characterised by over-extraction and unused waste. Future Planet's focus on innovative solutions spinning out from the world’s top universities that intersect both digital and circular shifts ensures that these start-ups can realise their growth potential to make a substantial difference. While assisting with the creation of these new circular systems, they must characterise production and consumption to have a positive impact on our future planet.
by James Derham
Sustainable Growth
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A Better Future Planet - Series Summary
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Food For Thought - VC & Livestock Production
The impact of livestock production:
Livestock supply chains account for 14.5% of global greenhouse-gas (‘GHG’) emissions. There is a strong case, for those in the position to afford alternatives to livestock produce, to reduce their consumption. Producing 100g of red meat generates 40 times the emissions given off when growing 100g of vegetables. An individual who chooses to go vegan for two of their three daily meals would reduce their food-related GHG footprint by around 60%. Conscious choices made by consumers who are in a position to reduce their consumption of livestock produce will thus be essential in reducing agricultural GHG emissions. This solution also requires no innovation.
However, meat, milk and eggs provide 34% of the protein consumed globally. These foods also supply billions of people with essential micronutrients, inter alia, vitamin B12, A, iron, zinc and calcium. As the global population grows in size and wealth, consumers will demand more meat and dairy. Ruminant meat demand is projected to grow by 88% between 2010 and 2050.
So, whilst it is necessary that those who are in a position to do so reduce their consumption of livestock produce, it is clear that innovative solutions are required which allow us to continue to supply the demand for these products sustainably. Future Planet, strives to provide solutions to both of these problems. By utilising our global network and connecting spin-outs from the world’s top universities with those who are working to implement low carbon livestock production, we aim to address these problems with growth funding to increase their scale and marketability.
Low Emission Livestock Production:
Enteric fermentation, the process of digestion in ruminant livestock, is responsible for 44.1% of global livestock emissions. The product of enteric fermentation is methane. Per tonne, methane has 86 times the warming effect of CO2. Researchers and alumni at the world’s top universities are providing solutions which can help abate ruminant methane production by adding natural compounds to feedstocks. With the necessary funds to scale these solutions it will allow them to be integrated into highly optimised feedstock supply chains. Future Planet aims to help these start-ups and spin-outs unlock value, whilst decreasing ruminant methane production.
Green Proteins:
Plant-based pork and chicken could reduce GHG emissions by 30-36%, and plant-based beef by 80-90%, compared with their meat counterparts. However, consumers bear an average premium of 86% when purchasing plant-based proteins. High prices are one of the most significant barriers to consumer adoption of plant-based protein foods. A similar issue is faced by innovative start-ups producing cell-based alternative meats, a method which reduces the impact of livestock on land use by more than 95%. The capacity to provide both types of alternative protein to consumers at a price parity with their meat counterparts will be crucial in reducing agricultural emissions.
Whilst it is essential that those in a position to do so reduce their consumption of livestock produce, it is also clear that low emission husbandry is achievable. Abating GHG emissions from livestock farming will allow us to supply the growing demand for meat more sustainably. Also it is essential in ensuring that meat demand is met sustainably will be Green Proteins. Nonetheless, it is clear in both the low emission livestock production and Green Protein spaces, innovation and investment are required to ensure that these solutions unlock their impact potential.
By James Derham
Food for thought - VC & AgriTech
Food for Thought: Why VC Investment in Sustainable Agricultural Practises is Essential
This article will focus on Future Planet Capital’s (FPC’s) approach to the agricultural ‘Challenge Area’, first defining the scale of the problem, and then showing how our approach can help encourage the implementation of best practices that allow us to sustainably produce more food, whilst consuming fewer finite resources.
Food Security: The Growing Demand for Food.
As the global population rises to a projected 10bn by 2050, the demand for food will also increase. The difference between the total global agricultural land area used in 2010 and the projected total area required to feed the global population by 2050 is 593 million hectares. This is an area nearly twice the size of India.
Today, almost 800 million people face hunger on a daily basis. Unless the food supply can be increased, the number of people suffering from hunger will increase. However, arable land is finite. Thus, we must develop solutions that allow us to produce more food, from the same amount of land, whilst consuming fewer resources.
This means that new technologies and practices must be developed to ensure a sustainable increase in agricultural yields. Globally, 75% of farms are smaller than three football fields. These new technologies must be low-cost, to allow them to be adopted by these small-scale farms. Researchers and alumni at the world’s top universities are providing such solutions. At Future Planet, we know that impact drives returns. The growing companies in the Sustainable Agriculture space, emanating from innovation dense ecosystems, promise not only meaningful impact, but also profitable future opportunity.
Sustainable Agriculture: The Rising Demand for Food Must be Supplied Sustainably.
Agriculture is responsible for 19% of green-house gas (‘GHG’) emissions. The proportion of total global emissions for which agriculture is responsible is set to increase. As the global population grows in size and wealth, consumers will demand more meat and dairy. Thus, the projected increase in population is not proportional with the expected rise in meat demand. Indeed, ruminant meat demand is projected to grow by 88% between 2010 and 2050. To meet these changing patterns of growing demand, the business-as-usual outlook will see agricultural emissions increase by 15-20% by 2050. Green protein solutions can help supply this increased demand sustainably, by offering plant or cell-based alternatives. Ruminant animals are almost 10 times more carbon intensive than alternative animal protein and more than 30 times more carbon intensive than vegetable protein. FPC is helping to connect researchers and spin-outs from top universities in the Green Protein production space with growth funding to increase their scale and marketability. This will help abate emissions from carbon intense protein production.
Alongside Green Protein solutions, we need new Agri-Tech methods that enable us to produce higher yields, whilst consuming fewer resources. Knowledge gaps are being plugged by promising Seed and Series A start-ups and spin-outs from universities. The Agri-Tech solutions that FPC are looking to fund not only help to ensure that farming becomes more sustainable, but also that revenue streams are maximised for farmers. Take, for instance, Genetic Engineering. By enhancing the genetic resistance of crops and livestock to disease, the companies that FPC are investing in will help increase yields and thus revenues for farmers, whilst also increasing the food supply and thus food security for consumers.
For current and future generations, embracing sustainable agriculture is a matter of survival. Farming is significantly less consolidated than other sectors; reducing emissions requires action by the more than 2 billion people employed in agriculture. New low-cost, high-impact solutions that increase yields and reduce emissions are essential. Innovative ideas that fit these parameters are being developed at top universities. However, many are yet to be commercialised. At FPC, we provide growth financing to scale these innovative solutions. In doing so, we ensure that these companies realise their growth potential, whilst assisting with the creation of the sustainable agricultural systems that must characterise the industry on our future planet.
Thank you for joining us on this journey.
By James Derham
Environment & Agriculture
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Sustainable Consumption
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Energy And Emissions
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A better Future Planet
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The Year Of EdTech
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Longevity Forum: Prof. Sarah Gilbert Lecture
This week saw the First Annual Lecture of the Longevity Forum, delivered by Professor Sarah Gilbert, Person of the Year 2020 for her leadership of the research into a Covid-19 vaccine and her career-long dedication to combating deadly pathogens with pandemic potential. Professor Gilbert is the Oxford Project Leader for ChAdOx1 nCoV-19, a promising vaccine against the novel coronavirus, SARS-CoV-2. She is a Professor at Oxford University and Co-founder of Vaccitech.
The challenge of climate change - in the midst of a global pandemic
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The global challenge of food security & biodiversity
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The race to a COVID-19 vaccine
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What is Quantum Computing & how could it change the future?
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