In today’s diverse business landscape, startups come in all shapes and sizes, each with a unique mission and purpose. From pet product subscription services to innovative drone delivery solutions and user-generated content gaming platforms, startups exemplify creativity and innovation.

However, beyond pets, drones and gaming, what if startups could go further and support marginalized communities? What if they could directly combat poverty and its adverse effects on society? There is ample opportunity for startups with social impact.

Significance of Startups

Before diving into this topic, it’s essential to understand the significance of startups and how they function. Startups are entrepreneurial ventures primarily focused on bringing a product or service to the market. The ventures often lack a fully developed business model or adequate capital to proceed to the next stage. Typically, startups are funded by their founders and later investors.

The growth of startups relies on public interest, trust and support for the product or service. The importance of startups lies in filling gaps in the business landscape by identifying unmet needs or underserved markets. Startups with the potential to disrupt the status quo are created by transformational entrepreneurs who aim to establish vibrant companies, generate employment and offer new goods or services to previously neglected markets.

Identifying unmet needs and targeting underserved demographics naturally lends itself to providing a product or service for those in need, including the working poor, people living in poverty and marginalized communities. This identification creates space for startups with social impact.

Opportunity in Underserved Communities

Marginalized communities can be found in various settings across countries, industries and communities. Some examples of underserved communities include:

Low-income individuals depend heavily on public transportation, especially in cities where car ownership is expensive and impractical for many. Relying on public transportation can be unreliable and complicated, affecting workers, commuters, school children and more. 

Rural laborers in developing economies, who mainly operate in the informal economy, lack access to essential protections like maternity leave, trade unions and compliance with labor laws. Work deficits are prevalent in rural areas, leading to employment challenges and insufficient social protection, resulting in the exploitation of low-income workers, child laborers, pregnant women and mothers and migrants.

Workers face gender disparity in job opportunities and wages, especially in developing countries. With approximately 2.4 billion women facing unequal economic opportunities, many countries still do not guarantee equal pay for equal work. Women face job restrictions in various forms, including formal training, job opportunities, representation in specific industries, compensation and proper health and maternity benefits. Specifically, women in Latin America and the Caribbean have less than three-quarters of the legal rights in the workplace than men.

Individuals lack financial literacy and participation, specifically in developing economies. Financial literacy plays a crucial role in poverty reduction. People struggle to make informed financial decisions without a basic understanding of financial concepts. Financial ignorance results in higher transaction fees, larger debts and higher interest rates on loans. It also prevents individuals from investing, saving for retirement and making the most of their money. For marginalized individuals with limited resources, this lack of financial literacy exacerbates the challenges they face, making it difficult to meet basic living needs on top of low and unstable incomes.

Venturing Beyond the Norm

To address the needs of marginalized communities and underserved markets, several startups with social impact have emerged as pillars of change. The startups below are taking proactive steps to combat poverty and provide equitable opportunities to the very issues previously examined.

Treepz

Treepz is a TransitTech solution modernizing public transit in Nigeria and expanding throughout Uganda, Ghana and other African countries. Treepz makes transportation more equitable and reliable and improves accessibility for underserved communities. In Nigeria’s largest city, Lagos, Treepz is building strong communities, addressing transit deserts and enhancing the quality of life. Treepz CEO is quoted saying, “We wanted to give people a better way to commute with predictability, where they can know when the bus will get here, the certainty that they will have a seat on the vehicle, that it’s a decent vehicle and a safe one.”

Karya

By providing ethical digital work opportunities to rural Indians and sharing profits with the workers, Karya seeks to lift rural communities in India out of poverty while emphasizing fairness and equitable compensation. India has 230 million people living in poverty, with no clear path out. Karya has now provided more than 30,000 rural workers in India with fair compensation for data collection.

Laboratoria

An initiative empowering women to pursue careers in technology and bridging the gender gap in the Latin American tech industry, ensuring that more women have access to opportunities in this sector. Laboratoria was started in Peru, as women comprise less than 10% of the technology industry. Laboratoria has helped more than 3,300 women in Brazil, Chile, Colombia, Mexico and Peru; about 85% of those have landed jobs in the past two years. 

Pluang

An app designed to help Indonesians diversify their investments and increase financial literacy, providing first-time investors access to financial education and asset class diversification. Indonesians scored only 38% in the latest financial literacy assessment, and less than half have formal savings accounts. Now, Pluang has more than 3.5 million users and is working to remedy these financial limitations.

Championing Change

These startups address marginalized communities and play a vital role in combating poverty and offering equitable opportunities for all. As noted, these startups would not be as successful without widespread need, public interest and support. Dedication to positive social impact is becoming increasingly important. Founders and investors are backing up words with actions by creating and supporting these conscious business ventures and startups with social impact. While there are various needs that startups can fill, from pet products and gaming to affordable nutrition and increasing financial literacy, it’s exciting to see transformational entrepreneurs making efforts toward social good. 

–Kailey Schwinghammer
Photo: Flickr