The acceleration of VocTech investing - March to March Reflections

By Alex Bishop, Investment Manager

At Ufi Ventures, we invest between £150k and £1m in seed-stage companies that are building digital technologies to give people and businesses the skills needed for work, now and in the future. We have spoken directly to more than 175 companies in the last 12 months, with the growth of VocTech - that is technology that sits between HR Tech and Ed Tech, to support adult vocational skills – moving into the mainstream. The VocTech market has certainly received increased attention from a consumer and investor perspective over the past year. The number of individuals seeking skilling opportunities skyrocketed as unemployment boomed, and private capital flowed in.

At the start of the first lockdown last March we’d just published our first investment thesis. This talked of the record levels of employment in the UK but highlighted the on-going inequalities in the employment and training market such as places in the east midlands and north east with high rates of zero hour contracting and persistently high unemployment despite the national trend. We were concerned that the big trends in the future of work such as increased gig-working, automation of roles, and ever more concentrated power in the hands of data-owners such as big tech companies could in the long term increase the challenges people faced in accessing and progressing in work. We were looking for VocTech ventures that could address some of these challenges, but we did not see the acceleration of the future of work that COVID has brought about.

A core part of our investment thesis is focused on supporting VocTech that develops the essential skills needed for work. The importance of funding VocTech ventures in this space was only further amplified by the pandemic and the ongoing crisis within the labour market. Within this is the startling number of workers in the UK with low levels of literacy. We identified Learning Labs, a company that had historically been grant funded by Ufi as a solution to make impact in the space of language learning. FlashAcademy® enables users to learn English from 45 different home languages and is operational in schools, training settings and workplaces.

Over the spring we looked at technologies that could support jobseekers in building the skills needed for work and support them within the recruitment process. Off the back of this work, we made an investment into Sonic Jobs, an award-winning digital recruitment app that helps candidates in blue-collar sectors develop their careers and apply for relevant jobs. We continue to be astounded by the growth and performance of the company over the last 9 months, when you consider the.

At the same time, we continued to pay close attention to the soft skills training market. We had been eager to invest in a soft skills training venture for some time – as sectors are transformed with automation such as retail or transport, companies increasingly depend on employees’ soft skills to add operational value. This work resulted in our investment in Bodyswaps, a Virtual Reality (VR) learning platform and content library to provide soft skills training similar in performance to expert coaching and role-playing. Rapidly developing the soft skills of the large workforces is critical, and we think Bodyswaps’ technology and learning model will massively deliver this.

Also of critical importance to our impact mandate is supporting skills needed for work in key sectors in the UK. As we moved towards the winter months, we approached this by looking for solutions that were removing barriers to roles in sectors with high demand for new talent, such as cybersecurity. We spoke to several companies looking to develop training and upskilling solutions in the cyber space, resulting in our recently announced investment in CAPSLOCK. CAPSLOCK has recently enrolled its first cohort of learners on to their cyber programme, based on real workplace scenarios. The company remove barriers to VocTech learning by offering their programmes to learners for no upfront payment, with the student only having to start making payments when they have secured a professional role.

As we shift towards the next twelve months, we continue to carry out deep dives into trends within VocTech, such as providing quality work experience for young learners and re-trainers, supporting upskilling and career transition in sectors under transformation such as retail as well as the importance of providing a variety of training solutions for health care workers.