New research released today (19 February 2019) by Co-operatives UK and Nesta outlines the conditions necessary for platform co-operatives to become viable alternatives to the Big Tech corporations that monopolise the market, such as Facebook, Amazon, Google, Uber and Airbnb.
A platform co-op is a digital platform that is designed to provide a service or sell a product - that is collectively owned and governed by the people who depend on and participate in it. The research has seen groups of experts and pioneering practitioners exploring the potential for co-operatively owned and operated platforms to create a fairer alternative and provide long-term social and economic benefits.
The findings have been complied into a report launched today ‘Platform Co-operatives – solving the Capital Conundrum’ that reveals a critical barrier to platform co-op development is accessing the capital investment needed to scale up. An alternative investment model is proposed based on community shares - a popular approach to raising finance unique to co-operative societies, where investors become co-owners of enterprises.
This research is launched at an event in London attended by practitioners and champions from across the sector, including the founders of two emerging platform co-ops, member-owned music sharing solution, Resonate Co-op, and Equal Care Co-op, which seeks to provide a co-operative solution to home-based care. An expert panel will discuss the research findings and share a new programme of work to establish new funding models for platform co-operatives in 2019, supported by Open Society Foundations.
“Web-based platforms dominate our daily lives, offering new customer-friendly services cheaply and conveniently. But the standard platform business model relies on extractive financing, the monetisation of user data and often disregards privacy and workers’ rights. It’s time for an alternative.”
Ed Mayo, Secretary General, Co-operatives UK
“If we are serious about creating viable co-operative alternatives to Big Tech companies then 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 entrenched venture capital and angel backed start-up models.”
Geoff Mulgan, CEO Nesta
“We’ve learned that capital raising and support for burgeoning platform co-ops is vitally important. With this in mind 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.”
Report author Simon Borkin, Co-operatives UK
Co-operatives UK is also running a roadshow of events across the UK to disseminate the learning from this 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. In 2018, eight platform co-ops received mentoring and support through this accelerator programme.
Click here to download a copy of the full report ‘Platform Co-operatives – solving the Capital Conundrum’.
If you or your organisation are interested in investing in the Platform Co-op Fund, then please fill out this short form and someone from Co-operatives UK will be in touch very soon.