The Brief: VCs betting on AI for workers

Greetings Agents of Impact! 

In today’s Brief: 

• Betting on AI for workers
• Supporting local food in Africa 
• Methane monitoring

Featured: Impact Tech

These VCs are betting on AI to upskill workers and expand pathways to good jobs. The advent of generative artificial intelligence isn’t all doom and gloom for employees. Played right, AI could open pathways to higher-skilled jobs for millions of workers who have been shut out of the middle class. Artificial intelligence tools that augment human capacity can enable many more people to perform high-skilled jobs. With skilled workers at a premium, venture capitalists see opportunities in technologies that can upskill workers in high-demand fields. The technology “has the ability to address ethical challenges that already exist in our education and workforce development systems,” says Rohan Wadhwa of Lumos Capital Group.

• Customized training. Lumos led an investment round last year for Mumbai-based Disprz, which uses AI to customize training for diverse workforces at companies like Thrasio, Amazon and Mint Dentistry. Among the other opportunities are AI tools that lower the cost of education, widen access to expertise, offer personalized learning, and provide predictive wraparound services for frontline workers, incarcerated youth, people with disabilities, and others with barriers to career opportunities. 

• Rapid adoption. Boston-based AdeptID uses AI to help companies like Walmart unlock the potential of their massive workforces. JFF Ventures backed AdeptID in 2021 from its predecessor JFF Employment Technologies Fund. “Imagine the number of frontline workforce Walmart has,” says JFF’s Sabari Raja. “If generative AI can help employers like Walmart uncover who these people are at the frontline, it’s a win win for everybody.” Google has adopted the use of an AI tutor from Kapor Capital portfolio company Edlyft, a Black women-led service providing  students from diverse backgrounds with group tutoring in computer science.

• Mitigate harm, maximize benefit. AI is a catalyst for efficiency, not a replacement for teachers, argues Rethink Education’s Matt Greenfield in a guest post on ImpactAlpha. Rethink portfolio company Magicschool.ai, for example, is helping teachers with lesson planning and other administrative needs. Impact investors can mitigate the harm and maximize the benefits of AI by thinking deeply “about the education system’s jobs other than preparing people for the workforce,” he says. Read Greenfield’s full post.

• Go deeper at SXSW. ImpactAlpha’s Dennis Price will lead a discussion at SXSWedu in Austin, “An investor talk on AI: All-in or all-hype?” The panel, set for Monday, Mar. 4, includes Rohan Wadhwa of Lumos Capital Group, Sabari Raja of JFF Ventures, and Brian Dixon of Kapor Capital.

• Keep reading, “These VCs are betting on AI to upskill workers and expand pathways to good jobs,” by Dennis Price on ImpactAlpha.

Sponsored by AlphaMundi Foundation

Gender inclusivity offers Africa’s circular economy ventures a competitive advantage. Nairobi-based Mr. Green Africa tapped new suppliers for its recycling business with safety measures and training focused on women in a male-dominated industry. Sustainable furniture maker Moko, also in Nairobi, increased women’s satisfaction with the company through targeted initiatives around recruitment, workplace safety and customer engagement. The two investees of AlphaMundi Group have found that centering women in East Africa’s circular economy makes their businesses more competitive and resilient. 

• Better business. With support from DEG Impulse’s develoPPP program, AlphaMundi Foundation and Value for Women worked with five AlphaMundi portfolio companies to build workforce empowerment and inclusivity initiatives. Mr. Green Africa grew its base of female suppliers from 24% to nearly 40% within two years. Moko advocates for women to be “involved at every level of decision making.”
  
• Read new case studies on Mr. Green Africa and Moko. Catch up with AlphaMundi Foundation’s case study featuring Asili Agriculture in Uganda.

Dealflow: Gender Smart

WIC Capital invests in a local snack food company in Senegal. Most African markets are heavily dependent on imported food products, despite the fact that most Africans depend on agriculture or food production for their livelihoods. ACASEN is a 30-year-old family business in Senegal that makes snack foods from nuts, potatoes and wheat. Women-led investment firm WIC Capital backed the company to support more locally-made food options. WIC previously backed Les Ateliers de Corinne, a woman-led bakery in Dakar. “The expansion of the agri-food industry, driven by the deliberate effort of adding value to local raw materials and the economic impact on local farmers, is a pivotal sector for the growth of African economies,” said WIC’s Evelyne Dioh.

• Growth equity. ACASEN was started in the 1990s by Monique Soglohoun as a simple business that sold roasted peanuts and cashews. It has “gradually grown and formalized over time,” observed Dioh. WIC’s funding will help the company boost production capacity. The investment firm is pairing its capital with technical assistance from its WIC Académie program, which is supported by USAID.
  
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Kairos Aerospace scores $52 million to help oil and gas companies reduce methane leaks. Restricting leaks of methane, a greenhouse 80 times more potent than CO2, was a key focus at the COP28 climate summit in Dubai last year (for background see, “The case for climate optimism”). The US Environmental Protection Agency in December released rules to prevent an estimated 58 million tons of methane from being released over the next 15 years. Sunnyvale, Calif.-based Kairos, which uses small aircraft and sensors to collect data and pinpoint large methane leaks, is working with the EPA to address anticipated demand from fossil fuels companies. The EPA’s rules call for a phase out of methane flaring, reductions in methane emissions, and emissions monitoring using EPA-approved technology. Laggards will be fined. 

• Methane management. Kairos will rebrand as Insight M to reflect its focus on helping oil and gas companies manage their methane emissions. DCVC backed the round. Funds managed by BlackRock, Hartree Partners, Climate Investment and Energy Innovation Capital also participated.
  
• Check it out.

Dealflow overflow. Investment news crossing our desks:

• India’s online seafood vendor Captain Fresh raised $48 million in an extended equity round, with $25 million from British International Investment and strategic investor Nekkanti Seafoods Group. (The Economic Times)
  
• Nigeria-based Arnergy, which sells small solar systems for homes and businesses, secured $3 million from Shell-backed All On, Breakthrough Energy Ventures, ElectriFI and Norfund. (TechCrunch)
  
• Fever Energy, in Sweden, clinched €10 million ($10.8 million) in seed funding from General Catalyst, Norrsken VC and other investors to develop a network of virtual power plants throughout Europe. (Fever)
  
• Edtech venture BridgeCare raised $10 million to provide data and software to government and nonprofits in order to make early childhood education more equitable and accessible. (BridgeCare)
  
• Milestones. The New York State Common Retirement Fund reached its goal of investing $20 billion in climate and sustainability-aligned private equity, bond, infrastructure and real estate assets. It’s looking to double its investment in green assets by 2035. The pension fund also announced that it’s restricting investments in eight oil and gas companies, including ExxonMobil. (Office of the New York State Comptroller)

Agents of Impact: Follow the Talent

Wanjiru Kamau-Rutenberg, previously an executive in residence at Schmidt Futures, joins Ford Foundation as a senior fellow… The Inter-American Development Bank is recruiting a nature-based solutions consultant in Washington, DC… Also in DC, LISC seeks an investor relations analyst. 

Mastercard is hiring an ESG reporting manager in New York… The Center on Rural Innovation is looking for a venture associate… Symbiotics has an opening for a financial copywriter… Investing for Good is on the hunt for an innovative finance senior advisor in the UK… Also in the UK, Save the Children Global Ventures is hiring an innovative finance associate director. 

VIWALA seeks a senior investment analyst in Mexico City… Krutham is looking for an impact investing research manager in Johannesburg… The Netherlands Advisory Board on Impact Investing is recruiting a program officer… Villgro has an opening for an inclusive livelihoods and entrepreneurship associate in Bangalore.

👉 View (or post) impact investing jobs on ImpactAlpha’s new Career Hub.

Thank you for your impact!

– Feb. 20, 2024