The Catalyst Fund will use a predictive early stage investment technology to select financial inclusion startups for pre-seed funding.
BOSTON, March 14, 2016 — BFA (Bankable Frontier Associates) will employ an automated early stage investment platform to evaluate and select early stage startups for Catalyst Fund. Managed by BFA, Catalyst Fund provides pre-seed capital for the purpose of catalyzing early stage startups in digital financial inclusion and creating deeper impact on the poor. Through Machine Learning, the Fund is exploring how to complement the human side of fund management with robust data. The technology layer promises to convert the Fund’s due diligence into a highly efficient and standardized process that could identify very early on, inclusive fintech startups with a higher likelihood of successfully growing their businesses.
Supported by the Bill & Melinda Gates Foundation and JPMorgan Chase & Co, Catalyst Fund also has the guidance of impact investors Accion, Omidyar Network, Gray Ghost Ventures and Quona Capital and is fiscally sponsored by Rockefeller Philanthropy Advisors. Learn more by visiting www.catalyst-fund.org.
“This approach could help trigger more investment in markets that are poorly served by venture capital. Thanks to the increasing adoption of smartphones, large amounts of user data are becoming available, which are tremendously valuable in better understanding low-income consumers and designing more appropriate products for them", said David Del Ser, Fintech Practice Director at BFA. “We are just beginning to learn how to unleash big data in financial inclusion and recognize the implications for economic development.”
The investment platform, PreSeries, is a joint venture between BigML and Telefónica Open Future_, built on top of BigML’s Machine Learning platform. The predictive algorithms are capable of producing a score that investors can use to qualify startups for funding, reduce biases in the selection of startups, lower management overhead and optimize monitoring and evaluation of the investment. Learn more about Preseries by visiting the BigML blog post.
For Ana Segurado, Telefónica Open Future_ Global Manager, this joint venture is a win-win for entrepreneurs and investors: “Early stage investing is very complicated, and even the brightest ideas can get nowhere due to poor execution of their business plan. In recent years, we have seen that around 80% of the startups we meet, fail in the first 5 years of development. With the implementation of this technology, we can mitigate the risk involved in investing in new business and help the startups implement a better business model to secure their future, which will lead to optimizing the business environment for the whole innovation ecosystem."
The collaboration will formally be announced at the PAPIs Connect 2016 conference in Valencia, after the world’s first startup battle in which the winner will be chosen by the PreSeries algorithm alone without any human intervention -- something that has never been done before. Catalyst Fund and BigML will continue to explore ways to apply the PreSeries technology to other BFA fintech projects.
BFA (Bankable Frontier Associates) is a global consulting firm specializing in the development of financial services for low-income people around the world. Its approach is to seek out, create and implement solutions to the challenges faced by low-income people in managing the financial matters that underpin their lives. BFA purposefully partners with cutting-edge financial and nonfinancial institutions that touch the lives of low-income customers. In creating solutions, BFA integrates its deep expertise in customer insights, business strategy, new technology and growth-enabling policy & regulation. Founded in 2006, its clients include donors, investors, financial institutions, policymakers, insurers and payment service providers. BFA has offices in Boston, New York and Nairobi. For more information, please visit: www.bankablefrontier.com.
ABOUT Telefónica Open Future_
Open Future_ is the open innovation program that embodies Telefónica´s global commitment to develop and attract talent and entrepreneurship, gathering all the open innovation activities and projects across Telefónica since 2014 into a single organization. Through social entrepreneurship and commitment to youth entrepreneurship initiatives, Think Big and Talentum; Crowdworking spaces; the Wayra accelerators and Telefónica and Amerigo Ventures investment funds, powers and invests in people, ideas and viable technology based projects at any stage of growth, openly and in connection with public and private organizations. With a portfolio of over 850 accelerated startups, more than 600 invested startups inverted and offices in 17 countries in Latin America, Europe and Asia startups, Telefónica Open Future_ helps turn innovative ideas into successful business. www.openfuture.org.
BigML is a leading Machine Learning company that helps other businesses make highly automated, data-driven decisions. BigML was founded in 2011 in Corvallis, OR, USA and made its European expansion official by opening its European headquarters in Valencia, Spain in July 2015. The company has pioneered the Machine Learning as a Service (MLAAS) wave of innovation through its consumable, programmable, and scalable software platform streamlining the creation and deployment of smart applications powered by state-of-the-art predictive models. To date, BigML has 15 patent applications, more than 25,000 customers from 120 countries and $5M in venture capital investment. In addition to commercial activities, BigML is playing an active role in promoting Machine Learning in education around the world through its rapidly expanding ambassador program thanks to active participation from top universities in diverse geographies such as North America, Europe and Africa, making real BigML's motto: "Machine Learning made beautifully simple for everyone". Please visit www.bigml.com for further details.
Jane Del Ser
+34 608 375 760
Marisa Orellana Sanz
Telefónica Open Future_
+34 639 042 131
Maria Jesús Alonso
+34 669 073 346