A social enterprise gets funding from the Icelandic Technology Development Fund
The Icelandic Technology Development Fund announced its funding just before Christmas. 25 companies received grants ranging from $85K to $420K. There is a wide range of startups on the list, from VR to Robotics, from Ed-Tech to Food tech. They are all built by strong teams looking for funding to scale their business. In many ways they are similar even though the products and services are different. Still one startup sticks out: TravAble. TravAble is an Icelandic startup trying to facilitate access to places and services for the physically impaired with an app. It is a true social enterprise, the only one in the group. It is still built like the others with a strong diverse team and strong technological know-how and meant to scale.
What is a Social Enterprise and what are Social Entrepreneurs
Social enterprises are companies or organizations that are funded to solve social or environmental problems with commercial strategies and often with a startup approach. Social entrepreneurship has often been viewed as an alternative way to tackle issues the public sector has not managed to solve and the private sector has not found profitable. Most Social Startups differ from other startups due to the fact that the driving mechanism in the company is doing good by solving a problem, not profit. They can still be run as for-profit, so if the solution ends up being profitable that’s not a bad thing, social enterprises can of course also be run as non-profits.
“With all the challenges our society faces from health care, education, technology or the environment, we need social entrepreneurs and social enterprises to create solutions that benefit people and the environment sustainably.” says Tanja Wohlrab-Ryan CEO and Founding member of Kveikja a NGO raising awareness, promotion and education on social entrepreneurship. “The concept of social entrepreneurship is still quite unknown in Iceland. To date not many social innovative projects have been supported by the big grant giving funds. For this reason, we would like to see a special grant fund created by the government (common in many countries) that specifically invests in projects that can demonstrate a high level of social and/or environmental impact, as well as profitability.”
Tanja pinpoints that one of the greatest problems with starting and running a social enterprise is funding. Why would anyone invest in a company that is not profitable from the get go. That’s where public money and grants come in. It is essential for social enterprises to meet their goals to have access to capital. That’s where Rannís and the Icelandic Technology Development Fund have stepped in and opened up to funding new types of companies by including a social enterprise in its funding this year. That is really applaudable.
So why is this funding so important
TravAble is a clear example of a social enterprise. The company is lowering barriers in our society for the physically impaired with making information on accessible services, entertainment and facilities easier to find.
TravAble aims to meet that need by connecting in a new way existing information on services and accessibility information in an app for mobile devices. The app will use location services, making it easy for users to plan ahead or navigate to nearby locations.
“TravAble´s vision is to be a global leader in it’s field. This requires close attention to technical implementation, the core system needs to handle high volume of concurrent users and be able to scale easily. TravAble has worked on the system design with experienced experts in the field. Usability is a key factor for success, and the implementation will be user centric and done in collaboration with top tier partners e.g. the Reykjavik University.” says Hannes Pétursson, CTO and founder.
The needs and wishes of physically impaired persons are targeted and those that cater to them. According to Ósk Sigurðardóttir, CEO and founder, “It is estimated that physically impaired, their immediate friends and family are about six million in the Nordics alone.” TravAble aims to build a crowdsource community to ensure collection of information and its reliability.
TravAble will initially use the Icelandic market as a test bed but has already began expanding to the Nordics with partnership agreements.
With such a large market segment, a scalable solution and a constantly growing market TravAble might eventually become profitable.
I hope this will be a motivation for other entrepreneurs to use their skills to solve social and environmental problems. With this gesture the Icelandic Technology Development Fund has indicated that social enterprises stand a chance against the profit driven tech startups that rule the startup scene for now.