By Jen Banks
Co-operatives UK is launching a seed fund and roadshow to build platform co-ops into a viable alternative to big corporations such as Amazon, Uber and Airbnb.
The launch coincides with the publication of Platform Co-operatives, Solving the Capital Conundrum – a report from Nesta and Co-operatives UK that found that better access to capital investment is the key to platform co-ops’ growth.
A platform co-op is a digital platform that offers a service or product and is collectively owned and governed by the people who depend on and participate in it.
The report is the result of research exploring the potential for platform co-ops to create a fairer digital business model and provide long-term social and economic benefits. It outlines the conditions necessary for platform co-ops to become viable alternatives to the big tech corporations that monopolise the market. And it proposes an investment model based on community shares – a popular approach to raising finance unique to co-operative societies, where investors become co-owners of enterprises.
Ed Mayo, secretary general of Co-operatives UK, said: “Web-based platforms dominate our daily lives, offering new customer-friendly services cheaply and conveniently. But the standard platform business model often relies on the monetisation of user data and disregards privacy and workers’ rights. It’s time for an alternative.”
Geoff Mulgan, CEO of Nesta added: “We have to find a way to help platform co-ops scale up. An investment model based on community shares can provide an alternative to the venture capital and angel backed start-up models.”
Author of the report, Co-operatives UK’s development lead Simon Borkin, said: “Capital raising and support for burgeoning platform co-ops is vitally important. So we are delighted to announce a programme of support worth over £120,000 funded by Open Society Foundations, to create a seed fund to help platform co-ops to start and grow, including an important institutional investment in Equal Care Co-op, which will help us develop real-world support for other platform co-ops.”
Co-operatives UK is also running a roadshow to share the learning from the research and encourage emerging platform businesses to scale co-operatively, as part of its platform co-op start-up programme UnFound, funded by The Co-operative Bank and in partnership with Stir to Action.