By Joe Ludlow, Impact Investment Director, Ufi Ventures
Welcome to an update on VocTech investing from Ufi Ventures. We’re aiming to provide a regular digest of activity and trends in the VocTech market, alongside updates on our investments, and our views on the field.
Ufi Ventures is the team at Ufi that makes early-stage investments in companies that develop digital technologies to give people and businesses the skills needed for the future of work. Over the next three years, we’re aiming to build a portfolio of around 20 companies which help adults to access and progress in work, help businesses to improve their performance through developing their workforce, and to demonstrate VocTech is an attractive investment sector.
Investing in VocTech innovations sees us working at the intersection of the HRtech and EdTech markets, from the perspective that vocational technology has historically been overlooked by investors looking at these two sectors. As an impact investor, Ufi Ventures aim to focus on ventures whose activities meet underserved needs or significantly improve outcomes for workers and businesses beyond what is available.
The past six months have been extraordinary by any measure and the hugely challenging impact of the pandemic for billions of people can’t be easily summarised in a few sentences here. As we come through the period of initial crisis, and begin to look forward beyond 2020, we’ve reflected below on the rapid changes and acceleration of some longer-term trends that the Covid-19 shock has driven in VocTech. Meanwhile, we’ve continued to be active investors in seed stage VocTech companies.....
Recent New Investments: SonicJobs and Learning Labs
Technology is rapidly changing the way people work, and the way employers recruit, retain and develop their workforce. Covid-19 has accelerated this whilst simultaneously seeing many more people seeking new jobs with job search on mobile devices growing fast. In this context, workers need tools which help them articulate their skills, find high-quality roles, and chart a course to developing their career.
SonicJobs is focussed on helping candidates in blue-collar sectors build their careers, which includes finding a job, but also goes beyond that in helping its users to identify their skills, learn new skills, and share knowledge.
SonicJobs use highly innovative technology to help jobseekers to recognise the skills that they have, to find and apply for relevant high-quality jobs, and to develop new skills to improve their employability and career progression.
Discover more about SonicJobs at SonicJobs.co.uk
The UK needs to radically improve access to high-quality essential skills training as it seeks to rebuild the labour market after Covid-19. There are 9m workers in the UK with low literacy, limiting their access to work now, and to further training for the jobs of the future. Learning Labs is the UK’s leading developer of technology for learners of English as an additional language in schools, training, and workplaces and we’re very pleased to join them on their growth journey.
Learning Labs’ FlashAcademy product is a combination of lessons, games, flashcards, tutor videos, and object translators to support people in becoming more confident in using English where it is not their first language. The FlashAcademy Workplace product was initially developed with Ufi’s grant funding to help employers provide health and safety training and core technical role vocabulary from over 30 different home languages. With this funding round the business is seeking to rapidly grow its workplace customer base, alongside further growing its work in schools.
Explore more about Learning Labs at Learning-Labs.co.uk
Updates on the Ufi Ventures Portfolio
Kinderly has been working really hard providing webinars and activity lists to support their nursery and childminder customers throughout the lockdown. They’ve been shortlisted in the Teach Early Years awards and have made some great progress working with the government of United Arab Emirates. Kinderly.co.uk
Learnerbly has been hugely busy onboarding new clients and building on the appointment of Jonny Day who joined as Chief Revenue Officer in March. They ran a really great offer during lockdown to provide access to the platform for furloughed workers, and CEO Raj Dey has spoken frequently about engaging employees through learning and development, especially as more people are working remotely. Learnerbly.com
Fluence has beta launched Fluence Discovery, a new product leveraging their technology to support business intelligence, including the discovery of competitors and prior art in Intellectual Property. They were selected for the Google for Startups programme and graduated from that in July, won the West Midlands Tech Awards, and have been shortlisted for the TechNation Rising Stars award too. FluenceWorld.com
VocTech Market Intelligence
To support our understanding of the VocTech market and inform where best we can invest to achieve our aims, in autumn 2019 we partnered with Tyton Partners on a programme to develop our market intelligence about VocTech, including an annual assessment of the state of the market to inform our investment thesis and a quarterly review of the significant activity in the field.
We hosted our second market intelligence roundtable this summer; of course it was a virtual meeting. The discussion focused on how investors can and should respond to the crisis, in light of unprecedented government intervention. Please do let us know if you’d like to join a future roundtable – our next one is in early November.
As we looked at the early data emerging post the pandemic striking the UK in March, we observed a number of trends and issues.
Obviously, the pandemic has had an unprecedented, devastating effect on work and workers. Over 30M workers in Europe have received support from the state for wages, including 1/5 of the workforce across UK, France, Italy, Germany and Spain. In the US the damage on labour market has been historic, leading to 20M lost jobs and reversing more than 10 years of job gains. Resolution Foundation highlighted the disproportionate negative impact of the pandemic on key workers and those in shutdown sectors – who are typically lower paid, young or female. So as we consider our investment focus for the rest of 2020, we are considering how impact led investors such as Ufi can respond to the employment and development needs of these most affected groups especially.
Amidst the crisis, we’ve observed early indicators of what we consider the be the acceleration of some long-discussed future-of-work trends which have polarising impacts on workers - potentially good for some people, bad for many others.
We are seeing an ever greater emphasis on the achievement of job outcomes in further and higher education, addressed through the emergence of new training providers who combine novel teaching and learning formats (e.g. bootcamps), with access to finance and job outcome guarantees; but our observation and concern is that these models are focused on learners, skills and roles already well served (e.g. STEM graduates moving into technology roles).
The increased acceptance, indeed necessity, of remote and flexible working as a result of the pandemic appears to offer wide benefits to people in work. However, we are concerned these benefits accrue mostly to higher paid, knowledge workers and those who have fewer care-giving responsibilities. In addition, increased acceptance of flexibility may also accelerate reduced job quality in lower paid service and production roles (many of which can’t be delivered “from home”) as flexibility is tied to practices such as piece work pay or zero / minimal-hours contracting.
We’re keen to explore how technologies are being used to enable remote and flexible working practices for a wide range of roles, including trainee and junior roles where learning through work alongside others is crucial to development.
In January 2020 we published our investment thesis, including four scenarios - drawing heavily on work from RSA and WEF. We’ll undoubtedly be refreshing our view of the VocTech investment landscape at the end of what will undoubtedly be considered a defining year in the future of work and workforce development. We’d welcome hearing your thoughts as we begin to update our thesis.
A couple of recent episodes of the VocTech podcast are well worth a listen as they reflect on some of the present challenges we're thinking about:
Early Careers Market
With internships, apprenticeships, and traditional volunteering opportunities all closing down to some extent; what opportunity is there to support young people better, and through the use of technology? What is going wrong and how can the early careers market do better? Who is responsible for funding and supporting this early careers market as it evolves? We discuss this and more. You will hear from investors, entrepreneurs and graduate interns all interested in innovation around young people, skills development and employment in the age of Covid-19.
Build Back Better
This episode is about building back better and takes its starting point from a World Economic Forum article on five ways to reset labour markets after coronavirus recovery, which you can find shared on our show notes. Plus, a few listener messages from WISE and Education Technology.
Our Focus For The Rest Of 2020
To the end of the year, we’re particularly looking at VocTech ventures who can help address skills needs in the care sector and help drive increased recruitment and retention in that sector. We’re also exploring further solutions to providing high quality work experience and first jobs – both from the perspective of supporting young people into their careers, and also those changing careers and sectors.
Ufi’s Week of VocTech (2nd to 6th November 2020) will feature some of our portfolio, and we’ll be holding a further roundtable discussion on some of the emerging VocTech market trends in the second half of 2020. Please do connect with us if you’d like to participate, or collaborate with us in other ways!