ImpactAlpha, November 26 – It took four years for Dolma Impact Fund to raise its $37 million first fund. It only took two years to achieve its first exit.
CloudFactory, a U.K.-based startup that hires Nepalese workers to “train” data for artificial intelligence applications for large companies, raised $65 million from FTV Capital and Weatherford Capital. Dolma invested in CloudFactory’s $7.3 million round in 2017 and earned a 56% internal rate of return, Dolma’s Tim Gocher told ImpactAlpha.
Private investors have been wary of Nepal’s history of political turbulence. Several years of stability, coupled with the global tech boom, have spurred entrepreneurship and investment. The land-locked South Asian country ranks among the poorest in the world; average income is less than $1,000 per year.
“CloudFactory was a small company when we invested in 2017. Now it has global venture capital firms coming in,” Gocher says. “The poorest country in South Asia’s workforce enabled that.”
Data for impact
CloudFactory is among a raft of data companies fueling artificial intelligence and machine learning with an army of human workers to cull and annotate large volumes of data.
It differentiates itself with a mission to create “meaningful” and well-paying jobs for emerging market workers (see, “Samasource raises $14.8 million to connect tech giants with Africa’s data talent”).
Scaling with integrity
Communicating the link between impact mission and business success is crucial as companies grow and secure non-impact funding. “Impact capital has to come into contact with mainstream capital in order for social enterprises to scale,” Gocher says. “We have to be able to defend our impact positions in commercial terms as that happens.” (See, “Managing mission drift and driving impact in emerging markets“.)