UNICEF Workshop - Crypto Explorations at UNICEF

we've been around 9 years is because half the world is not connected to the internet we see that there are plethora of these digital Solutions we're here to talk about only digital right like what's happening in the digital world but we need to remember that there are children and half of the world's children are actually not connected to the internet even to start with so how can we then build digital tools um that are catering to their unique needs their unique realities that can then help them be in included into systems so how can we even in the blockchain world build keeping in mind that internet connectivity is a very real problem um and then reaching children and reaching young people is very important and keep that in mind as we grow and build more solutions um so we launched the Venture fund back in 2014 which is about 9 years ago um can you can you click next as well okay perfect so we launched a uh pool funding vehicle which is currently $35 million we held a bunch of Bitcoin so8 Bitcoin 2527 e so we had some amount of funding there um and the purpose of this fund is really to be able to test invest and position for scale early State startups that have the potential to change the way UNICEF operates so how can we change what we do at UNICEF um and use Technologies to make processes systems programs more efficient we do this by investing in Frontier Tech and by frontio Tech we of course look at blockchain drones data science virtual augmented realities um what we also try to do is conduct a landscape analysis every sort of 2 to 3 years to identify what is actually Frontier what do we mean by Frontier and how can we change with how the Technologies evolve I mean just the blockchain industry doesn't even take two years to change it changes every two months so we need to we need to as a un entity uh make sure we're keeping up to speed with what's happening around the world um what makes this fund unique is we exclusively and only invest in Emerging Markets we do not invest in startups registered anywhere outside of Emerging Markets we operate in 160 have made investments in about 85 so we have a big still a big gap that we want to cover but our goal here is to encourage local entrepreneurs to solve for solutions that are built to address local contexts we don't want to have a German solution solving for a Kenyan problem so that's a big Focus uh we only invest in open source so we force our organization and companies we work with to really value understand the meaning of Open Source and build in the open um we have also a big focus on female leaders and Founders so about 44% of our portfolio uh consists of female Leed or founded companies um we also work very closely with the rest of the companies to ensure they're building diverse teams and understand really the value of why you should have diverse teams and last but not least as I mentioned before we did launch a crypto fund we are still the only UN agency or entity that actually operates in crypto um we make investments seed stage funding $100,000 companies that do well have the potential to get additional funding so there's growth funding which is anywhere between $200 to $400,000 and this essentially is so that if a startup is actually generating positive results is looking to Pilot their solution in an additional country context deploy with another country we help these solutions from Emerging Market scale to other Emerging Markets we also of course provide extensive technical assistance so we have technical support support a technical support program which is very needs-based developed on unique company realities on how we support Solutions across diversity Equity inclusion data privacy trust open source modeling business model support we have Aron here from who leads our blockchain team he works very closely also with the blockchain companies um to help them with their strategy we've made so far 146 Investments 81 are in startup 65 are in country offices so the country office piece is essentially us investing in UNICEF country offices encouraging them to use technology directly so they can they can use the investment to further invest in a startup they can work with an NGO or they can hire people and build things themselves the point is to encourage Emerging Markets whether UNICEF or startups to essentially work with technology now like where we invest in the investment thesis of course we look at Education Health climate the traditional UNICEF sort of thematic areas and and focus spaces but then we also have a big emphasis on whatever this looks like in terms of Economic Opportunity industry Innovation and infrastructure I'll come to that in a slide um this is an example of an education solution so a more classic UNICEF example um on what we invest in this was an AI solution to improve children's cognitive skills this is a company based in Mexico they started with one game created a second game piloted with the Mexican country office in UNICEF to scale their solution across Mexico um and now have actually signed a contract with the government of Guatemala to scale these two games across Guatemala um this is more of the industry Innovation infrastructure which is the underlying core technology it's a blockchain solution based in India called stat wig they've actually developed a supply chain solution so more sort of early use cases of blockchain um we invested in them to track vaccines all the way from manufacturers to hospitals but the same solution is now being used by the government of India to track rice bags all the way from Farmers to government distribution centers so our purpose is to Showcase to UNICEF how the same underlying technology can be used for multiple purposes it doesn't need to be used just to do one thing but can do multiple things in terms of impact we have sort of a big emphas is again as a UN agency you need to look at what is the impact you're creating as an organization as much as we also want to focus here on what technology is doing there's also children uh we have been able to reach our startups and portfolio has been able to reach 41.5 million beneficiaries we're seeing that 56 different UNICEF country offices are actually using these Solutions so outside of where we made the investment so for instance um we have actually with us zlb so if you've invested in Z Labs um which is in Trinidad and Tobago is where we've made the investment if we're talking about 56 countries that are using the solution so imagine India using zlb solution that would be counted as one um next we also look at impact from a financial perspective so our portfolio has been successful in generating 2.6x um additional funding or followon funding from third party sources so we are seeing Financial return and results portfolios generating Revenue about 65% and then 40% is reporting a profit we also have had actually seven companies exit our portfolio so they've been acquired and this ranges anywhere between 6 million to 75 million um so we seeing that also as a as a kind of indicator of success to see open- Source businesses do well um maybe I'll just talk about one example here really quickly which is just just Cloud line it's a drone solution they've actually created a really cool Airship that can that can when we when we started with them they could carry about 10 kg payloads now they carry 50 kg payloads and they deliver vaccines blood supplies in different parts so this is an example of a company where we invested in South Africa but they're actually being used both in Namibia as well as in mosambique to do this kind of drone delivery of systems and now coming to the crypto fund the the reason why we're here and and we're interested and excited to engage with this developer Community um is because we realized pretty early on so this was launched in 2019 that we wanted to not just expand our blockchain prototyping and use cases but also wanted to be able to leverage crypto for an organization that is big uh and make them more friendly to build their institutional systems and muscle memory on how can you operate in a digital currency for now it's crypto how this industry shapes and changes will see but it's important to be able to be an agile organization that can respond to things quickly and so we we felt like a big requirement or a need to start shaping what that system can look like for Unicef so we launched as a fairly small fund um working in crypto we are able to accept hold and disperse cryptocurrencies so essentially we make these investments in startups we also require our startups to spend their crypto in its native form so we want to be able to show to our donors to our partners and to UNICEF how we can actually do a lot more a lot more transparently in crypto next so far we've supported about we supported about 40 plus projects of course there's you already know what what would it would mean in terms of transparency cost and time time um what was interesting for us and as a learning for the organization was when we accepted the crypto it was about 2.1 million worth uh when we dispersed it it was 3.7 Million worth so we had to expand our operational and programmatic capacity to be able to absorb that but more importantly um and why we're here actually at a at a unstable uh conference is is really to talk about when we made this investment sure we had to invest and program for 3.

7 million instead of 2.1 million is one thing but then these startups and beneficiaries received this funding which then faced the aftermath of of what happened there um which which was hard which was hard for us as an organization because then we needed to understand how do we support these companies after there's been sort of a crazy reduction in the prices um and also for our startups to understand how do they then complete a work plan for which they had sort of estimated a approximately 100K but now have a lot lesser than what they had thought or envisioned which is where the value or the role of stable coins comes in um how we as an organization can diversify our Holdings to be able to accept and bring to our basket of Holdings the correct stable coin which can help us as an organization uh provide options to our startups so that they're not set or tied down to just Ethan Bitcoin but have the option to change um their currency I already covered this we can skip I think it's your Okay so we've actually had again very small significant amount of funding coming back from a startup to the Venture fund they actually did an nft sale and contributed funding back to us um but it was actually nice to see that it's usually the crypto community and the blockchain solutions that have that incentive to think about also giving back to the community so we always like to share this is a gamified solution investment we made in Argentina uh in a company call XC capit um and they contributed back to us uh around this time last year and we have now the blockchain stuff which Aron can walk us through thanks yeah so this is a very sort of a full slide but the idea is we started way back so 2015 we did a first blockchain pilot within the team that was uh I think at that time the team they took some photographs of ourselves hash put it on the Bitcoin blockchain and then Tred to make it into some sort of ID uh of course it didn't scale or anything but the idea is we got down and dirty and then get our hands into the mush and then we actually do stuff so that's sort of the message with this slide that that we started off very early with the blockchain work and it at the crypto fun was launched in 2019 and then a bunch of blockchain cohorts were on board it so there are specific focus on blockchain technology from the fund so there are about 20 startups uh we did a gitcoin pilot in 2022 and this year we are actually building a dow prototype uh to be piloted with an open- source project to see if it can democratize decision making in the D uh sorry in the open source project and also hopefully plug in to some sort of a fundraising mechanism web3 fundraising mechanism next I'll stand on this side yeah so so far we have had three blockchain specific cohorts um the first one was very exploratory that's where we found stawick the the the supply chain solution the second one we got a little bit more focused um we wanted to find and work with companies that that worked with money in and why for Unicef because the angle is financial inclusion um so it it involves remittances loans uh stuff like that then in the third one we got a bit more real um uh here real world doesn't imply rwa or you know anything like that for us in our context Real is how can blockchain SL web3 help in delivery of services in a business context can it enable a business model uh can a broader Community actually use it to you know build something and you know make money so so we got got got very very real with the you know third third cohort next one yeah so this is from the second cohort um just some some some numbers like for example in the one-ear period U so there were more than 100,000 transactions uh between our startups uh we reached about 700,000 beneficiaries yeah next one yeah so this is a snapshot of the of the financial inclusion or ftech cohort uh so uh s already mentioned excap it which we which we worked with so I would like to talk U highlight two companies here so the first one is blowings on the top left from Mexico um it's a strange name yes but but yeah so uh at that time the you know project was uh interesting uh it was a old older idea but but they actually did it so which is to go onchain uh to put onchain uh a traditional saving Circle which is which is done over paper in a small family group or something but to take it on chain and then to expand it now that you can have you can have saving circles across continents with hundreds of people and then of course there is a credit history being built up because it's all on chain so what else can that can that lead to Etc and now uh I'm happy to say that they uh have are now engaged with one of the countries in Africa with the UNICEF office there and we are going to utilize their solution uh slightly modified for the local context to build credit histories for uh out of school adolescence uh and and this is a a very harsh environment so many kids drop out of school but then Unicef on the ground is working to give them a future even if they don't finish schools so so they engage in entrepreneurial programs so they have this little saving Circle so the idea is to apply their solution in this youth group and then once the credit history gets built up can that then be used to secure loans and then further Drive their uh progress forward so so that's that's one of the ideas um with that uh kotane is a I think a reasonably well-known company now pretty straightforward off- ramping with no smartphone or Internet through SMS Financial inclusion so um we we can work with people in a UNICEF context people without bank accounts people in areas where there is no no internet and we are able to reach them now yeah next uh and this is another company uh from the cohort we recently did a pilot at UNICEF Nepal so this is a solution where they use blockchain this is a a permission blockchain solution but to track uh the movement of cash from some government entities all the way into the hands of beneficiaries in rural Nepal so this is uh This was done in a flood prone District in Ino Nepal uh as you know part of the social protection scheme uh some some stats uh from from this you know particular uh solution uh what is most interesting is uh these guys built it in such a way uh to be both financially inclusive as well as digitally inclusive what I mean is it works for people with or without bank accounts and with or without mobile phones so the ones without mobile phone they get a kind of a QR code which then ties back to a wallet on the platform so so where their tokens are placed and then they can redeem the tokens for cash at the physical cash collection Point next yeah so this was the third cohort um one interesting project that I always like talk about is you know xmesh so this is where I I mentioned about getting real right getting into Service delivery business models so these guys they are they they have made a little Hardware device which creates a Wi-Fi hotspot the idea is to deploy this in areas where there is in like remote communities where there is no internet especially in schools so the idea is to bring connectivity to schools to know children right uh where is blockchain here so so so blockchain is used to enable the business model so uh the data which uh the people consume is then recorded on a blockchain and then ultimately if the jurisdiction is friendly for crypto they could even potentially use some sort of crypto or some other token to you know pay for their data consumption and then these hotspots is then deployed in the field by an internet entrepreneur if you will so it sort of uh generates some sort of economic activity in the community as well as bring connectivity to Children yeah so that's a interesting project and recently we invested in a couple of startups uh Mark right there is from zlb so if you want any details please talk to him yeah so so this is a focus on climate uh so Z Labs is doing some great work uh with uh uh uh working with community on you know enabling Community to U take climate positive actions through a variety of mechanisms so that's super interesting then we have a parametric Insurance uh solution uh which works with Farmers but we are hoping to learn from the mechanism and then ultimately deploy it in other UNICEF context not just with farmers in in Africa but to go go beyond that yeah next yeah as I said we did a quadratic funding round which was super interesting so we listed 10 of our uh startups you can see kotani pay start EXC capit um and we put in 50 e and the quadratic funding round uh was very successful I would say we got back 67.5 we and 15,000 die which was ultimately distributed to these 10 Solutions so these 10 Solutions which are part of our portfolio are also certified digital public goods as per the DPG standard so which is why we put them there so uh this is fantastic you can of course look at all the info there there is a dune on this U and we want to see what else how else can we explore the world of web 3 to fund our projects because they do create open source output um and uh open source is open source there's I mean people don't get paid but then how can we uh you know um Power these projects to go forward so we are hoping mechanism such as this and any other future mechanism that may come up in the world of web 3 can be plugged in maybe in a dow structure which is also something that we are exploring yeah um there is an opportunity U for us um which is we are now strategically looking at Cash transfers so so um what I mean by cash transfers is um UNICEF and you know other agencies um spend millions of dollars UNICEF spend hundreds of millions of dollars each year in you know getting literal money into the hands of people where there is any humanitarian crisis or where there is deep-seated issues like I'm talking of Ukraine I'm talking of Afghanistan I'm talking of Yemen Somalia so on so hundreds of millions of dollars so it's Fiat money right now maybe it's even physical cash or Bank transfers or mobile money but then can crypto be injected into this to make it cheaper faster and of course more visible so there's been a lot of exploration here lot of research lot of digging talking to Partners off ramps blah blah blah so we are trying to figure this out uh and and and to and to uh do it in such a way that it can actually be scaled Beyond just a pilot somewhere so that is that is the goal um and um yeah so if you guys know of anything which can help us there please let us know yeah so Partnerships around crypto for cash transfer programming we are looking at financing models as I know told you to see how we can further incentivize the development of open Goods um and of course other technical things any smart contract audit capabilities will be nice to have uh if you guys know know anybody and of course if you are a startup please come to us talk to us you can get up to $100,000 SE funding U that's it from us thank you question yeah okay so the first thing is uh the crypto fund right now we have approved cryptocur we are only approved to hold Bitcoin and ethereum so the first Next Step would be to get a stable coin approved internally so we are working on that and there are lot of discussions and research and all that going on so once we get a stable coin or more than one stable coins approved then we have the ability to hold stable coins and then we can then start seeing how it can be injected into uh Cash Cash transfer programming yeah both maybe sonak can so we'll we'll of course do the fund to like funding to startups in stable hopefully and then also even if you do it in crypto like in sorry in ether and Bitcoin they will be able to change to stable if they wish to so there there's always that option um but then also for for the cash transfer work we are looking to do transfers to beneficiaries and stable so if we like this platform was currently tested like room Sun's platform was currently only tested in like tokens but we are considering looking at or rooman platform or another similar platform um building the crypto rails to do the transfers and do it in stable so that would be the way to go ideally um but of course it requires you know a lot of work uh in in the process behind the scenes to make that happen I want to add one more thing uh we of course keep an eye on regulation it's super important uh for us right so we keep an Eagle Eye on that so we cannot we may not be able to do it everywhere but we are looking for a good point to start and then of course to expand from there yeah so that yeah so I mean overall like at the moment what we're doing is evaluating a large number of stable coins based on market cap um volatility historical data on just volatility um we're also looking at whether it's collateralized it's algorithm based and what that would mean for Unicef like how would we work with one versus how would we work with another and what kind of systems or processes we would need then there's a whole other sort of area which as AR mentioned is related to regulation but is also related to um how we would account for it so what are the different accounting standards are there international accounting standards already um you know would it would it fall in as an intangible asset as a financial asset can it be cash cash equivalence we need to be able to I mean as a as a UN agency and as a as a big organization we need to be able to identify what is the right system or the right methodology um and work very closely with our financial team which is our treasury bigger sort of financial division UNICEF um to understand how we can account for it and all those sort of considerations then impact what we can do or what we can accept um so yeah currently that's where we're at we're of course looking at a at a whole range based on market cap transaction volume and such um to be able to then make a decision you want to our own stable coin that will be super cool though but let's see yeah yeah um but it's yeah the as as she said we look at market cap transaction volume and all that because ultimately when we I mean we are not holding stables for any other purpose apart from giving to others so they need to be able to use it so I think that's finally what's uh what's what's important which onean yeah yeah that that could be something yeah that was other uh with respect to stable coins or yeah yeah of course of course I mean U uh in in previous conferences that I've been to I I have like connected with various uh people from various protocols and teams so whenever we build internal prototypes I just now reach out to them I ask them for advice uh because frankly we are not the technical gurus um UNICEF I think is is the custodian of the a use case like like we have fantastic use cases so we of course would need the the you know technical community to you know come in then of course I'm like the sort of the bridge you know interpret the languages on you know both sides but we we need a lot of input and a lot of help so uh technical prototypes uh when we build internally I tend to reach out to see who may be the right person like right now we got a bunch of inputs for the Dow work um in the future any other topic we would need inputs from everybody yeah yeah yeah we have we have spoken to them a few times yeah uh I think kotani is built on cell kotani is built on cello blowings is built on cello collectable yeah yes yeah we do uh we publish about the startups that we that we invest in and then later on if the startup gets engaged in a pilot then we wait for the pilot to be finished an evaluation to be done and then we publish something so right now that process is ongoing for the uh UNICEF Nepal pilot with the uh uh tracing of cash transfers with the ruman platform so that is happening right now so we will publish something uh we should publish something once the uh uh blowings uh pilot is also done it's it's just kicking off so maybe a year from now yeah I think there's there's a version of uh the rooman work midterm evaluation is already published it was published actually in June so we we usually always publish that we also publish a lot of stuff related to like you know our learnings in the crypto space in the blockchain space we we always sort of like where where things work but more important where things fails CU so that other agencies other un agencies or other any other you know interested Oran did well we also the ones that didn't well because it's important we think that as our fund we want to challenge technology to do things better we also want to make it clear where it's not doing things better so that you you're the same thing or investing in the same thing knowing it doesn't work um unless something's done right you so our website actually has a lot of like studies reports on what's work earlier we used to do something called Fridays where you used to basically talk about everything that's we yeah so please check out the website there's a Blog with tons of content from many many years prior yeah okay thank [Applause] you