Acquisitions Spur Growth for Open Source Startups

This year saw the first successful exits of portfolio companies from the UNICEF Venture Fund. Prior to their respective acquisitions, Atix Labs (Argentina), Geospoc (India), Giraffe (South Africa), Veative Labs (India), and Kimetrica (Kenya) received early-stage investment and technical assistance to build open source digital platforms that bring positive impact to children's lives. The five solutions range from Artificial Intelligence (AI) powered solutions for mapping rural schools to financial services enabled through blockchain technology.  

The UNICEF Venture Fund is a $35M+2527ETH+8BTC pooled fund – the first financial vehicle of its kind in the United Nations – that makes equity-free investments and provides acceleration support to early-stage, open-source, emerging technologies with the potential to impact children on a global scale.  

Central to the Venture Fund’s investment thesis in emerging technology products is to provide seed funding in exchange for open source IP and to build communities to problem solvers that are building solutions backed by financially sustainable models. This creates a value return to the Venture Fund and its partners – as well as a de-risked pipeline for capital investors. The Fund invests exclusively in for-profit startups registered in emerging economies (across 67 countries to date), with a commitment to building a diverse portfolio.  

These five exits confirm our initial thesis: that investing in and supporting traditionally overlooked opportunities can spur new, publicly available innovations that attract capital and generate a return surpassing the initial investment. 

We expect these five to be the first of many. Open source solutions generate revenue - 80% of our portfolio companies successfully do so – and are increasingly garnering private investment. The funding landscape is rapidly changing. In 2004, only nine firms producing open source innovations had raised venture capital funding; however, in 2015, this number had increased to 110, raising over $7 billion from venture capital funds (Accel Partners). 

While trends are promising, our early-stage innovators continue to face challenges in accessing sufficient financing to take them to the next stage. The Venture Fund has established two funding tiers to address the financing gaps prevalent for mid-stage growth companies, aiming to accelerate more promising solutions, positioning them for sustainable investment so they can increase third-party funding 

Looking for investment opportunities in frontier technologies that are generating value and results for children? Check out the Venture Fund’s full portfolio and our upcoming investment cases for opportunities in Digital Public Goods.  

Learning and Career Platforms

Access to quality education is fundamental to reducing gender inequalities, increasing incomes, and addressing poverty gaps. The effects of COVID-19 have created further disparities, especially in Low- and Lower-Middle Income Countries (LMICs) where 258 million children already did not have access to schooling even before the global pandemic. Research from the World Bank shows that 53% of children in LMICs cannot read and understand a simple story by the end of primary school. To address the learning crisis, startups, private and public sector actors alike are leveraging educational technology (EdTech) solutions to enhance and facilitate learning and increase access to quality education for many learners, especially those in remote parts of the world.  

The EdTech market is projected to reach $350 billion by 2025, with China and the USA as dominant players. It is essential that while this market is being shaped and growing, learners from LMIC markets are not left behind. To date, the Fund has invested in 21 EdTech solutions, with two solutions being acquired to address learning disparities in their respective regions. 

In India, Veative Labs was acquired by Dev Clever Holdings to expand learning and career products across schools in India that are affiliated with the National Independence Schools Alliance. The acquisition will open Veative’s virtual content to 70,000 schools across India, which are attended by 1.3 million students. Veative Labs received investment from the UNICEF Venture Fund in 2018 to release parts of their library of VR educational content as open source, as well as to make it available on WebVR, increasing accessibility and reducing costs of using the technology. 

In South Africa, Giraffe was acquired by Harambee Youth Employment Accelerator, South Africa’s primary player in the youth employment ecosystem and a member of the Presidential Youth Employment Initiative — the largest coordinated effort to combat youth unemployment in South Africa. 

With UNICEF’s support, Giraffe developed a series of free educational courses designed to help young people become more employable. The investment by the Venture Fund also enabled the Giraffe team to create a matching system to identify the best candidates for specific job opportunities. By designing an ontology spanning main industries, roles and skills, the Giraffe team created a framework to match candidates to jobs based on their profiles and recommend them for specific opportunities. 

Digital Infrastructure for Transparency and Efficiency

The UNICEF Venture Fund invests in blockchain solutions that increase efficiencies, cut transaction costs, and simplify transaction processes.  

Atix labs was funded by the UNICEF Venture Fund in 2018 to further develop a global social platform that connects Small and Medium Enterprises (SMEs) with funders in different locations, facilitating the investment process and giving more visibility to use of funds by SMEs and their impact on-ground. Atix Labs is using blockchain technology for cross border investments and as a tool for impact accounting across all sectors.   

This year, Globant acquired Atix labs to expand its offering in the blockchain market. Through this acquisition, Atix labs will become a Globant independent studio, giving Atix labs room to develop a more mature approach, relying on Globant’s processes and tools while continuing high quality software development.