Aussie blockchain fintech Sempo has secured €1 million ($1.6 million) in funding from the European Commission to fuel digital aid projects in partnership with Oxfam.
Sempo provides a centralised model for distributing aid to people affected by disasters, particularly those who don’t have access to a bank account, but do have a smartphone.
The startup uses a suite of cryptocurrencies, with one acting as the ‘global reserve’. The idea is to get people and stores in remote communities onto the platform, allowing for digital cash purchases at times of crisis.
In September last year, Sempo took the top prize at Startup Victoria’s Impact Pitch Night.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Since then, it has been fielding an uptick in interest from NGOs both in Australia and internationally, co-founder Tristan Cole tells SmartCompany.
Sempo’s project was one of five to secure backing as part of the European Commission’s European Innovation Council Prize for Blockchains for Social Good
It beat “a couple of hundred” applicants to make the top five, which each secured a €1 million cash injection, Cole says.
For an Aussie startup, he admits it’s “a little unusual” to secure government funding from the European Union, and in euros for that matter.
But, the scheme only needed the lead funding applicant to be based in Europe — that was Oxfam Ireland.
And for a startup with global ambitions, there’s no reason to be restricted to funding options on your home ground.
Most startups coming out of Australia nowadays are “inherently global from day one”, Cole notes.
“There is no longer a local Australian startup that is 100% focused on Australia,” he adds.
“When it comes to technology, you’re competing on a global scale. So it makes sense to apply for these unique funding opportunities globally.”
The win comes partly off the back of Sempo’s pilot program in Vanuatu, which saw virtual cash distributed to communities, allowing people to pay for anything from their phone and electricity bills to food and medicines.
Through that scheme, the time taken to deliver aid was reduced by about 96%, Cole says.
“And the cost was reduced significantly as well.”
During COVID-19, cash is king
Securing funding from government organisations is by no means a quick and easy process. In fact, this funding application process has been going on since back in 2018.
But, the cash boost comes at a time when the need for such a service is being highlighted, Cole suggests.
The COVID-19 pandemic has escalated into a health and economic crisis on a global scale, and people all over the world — including Australia — are receiving cash support to help tide them over.
“It’s quite topical,” Cole notes.
The pandemic has brought to light the fact that “cash is the most transparent, the most effective and more importantly the most empowering way to deliver aid”.
Organisations and governments all over the world are “defaulting” to cash transfer programing for financial support, he observes.
In Australia, for example, the temporary increase in JobSeeker payments, the JobKeeper program and cash grants for small businesses are all designed to put money into people’s pockets.
These cash injections are “so critical in a time when funding is tight”, Cole says.
Giving people cash is more efficient and more effective than giving people food parcels or vouchers for specific services, he explains. It’s also more empowering to the recipient.
He says food parcels and vouchers are “quite an old-fashioned way of giving aid”.
“You just don’t know what people need … your neighbour’s needs are probably different to your own,” he says.
Sempo is all about trusting and empowering individuals to make the right choices. And, he says, ”the research has shown that people do make the right decisions”.
The go-to solution
This particular funding is partly pegged for continued projects in the Pacific, helping in the recovery of communities affected by Cyclone Harold back in April.
But, it will also support Sempo in its ongoing growth plans. For example, the team is working with a number of US organisations and charities to use the open-source platform as a shared delivery system for support, Cole says.
“Previously, they weren’t able to use a common platform that had shared insights and shared high-level metrics between organisations.” he explains.
“Previously you would have beneficiaries receiving six different kinds of aid … having this shared delivery system is really critical when you’re talking at this scale.”
The founders are also looking at expanding the number of payment options they support, and expanding to work in more countries.
Ultimately, “we want to be the go-to solution” Cole says.
“When we think about where we want Sempo to be, there is so much need for the ability to distribute aid, and particularly cash aid,” he adds.
“A lot happens in 12 months and this funding from the EU will help us do that.”