Base10 Partners today announced the launch of a $137 million fund to invest in early-stage startups that will use AI to change industries by empowering workers instead of automating them out of jobs.
The prime directive of the debut fund will be to back companies in industries like real estate, construction, waste management, and logistics — what managing partner Adeyemi Ajao calls “automation for the real economy” and “solving problems for 99 percent of people.”
Base10 Partners was created in 2017 by Ajao and cofounder TJ Nahigian, a company spokesperson told VentureBeat in an email. With Ajao as managing director, Base10 is one of the first venture-backed funds with a black managing director to raise more than $100 million in its first fund.
Prominent investment funds recently created by people of African descent include the $100 million New Voices Fund from Richelieu Dennis and Arlan Hamilton’s Backstage Capital, which raised $36 million earlier this year to back underrepresented founders, particularly black women. Only 3 percent of venture capital partners today are black, according to analysis of about 1,500 investors by Equal Ventures partner Richard Kerby.
The initial Base10 fund will not focus on investment that supports African or Latino founders as a primary directive, but it will be informed by a managing director of Nigerian and Spanish descent who believes Silicon Valley has an elite bias.
Ajao has created a number of companies in Spain and Silicon Valley and as an investor backed companies like Latin American ridesharing app Cabify. In his time building startups as a founder, Ajao said he’s been part of data-driven endeavors with startups that fail to take into account the communities and stakeholders they impact, and he believes that’s the wrong approach to engineering and design.
“I think that the ‘technology-first‘ versus ‘what problem am I solving first‘ is a very real bias that Silicon Valley has,” he said. “We build too much and too much in a box and too much in the lab because we are so smart.”
Base10 Partners will make early-stage investments of between $500,000 and $5 million. The firm will not seek to invest in technology-first companies, an approach that could mean missing out on some investment deals, Ajao said, but he insists that technology-first businesses builds the wrong kinds of companies.
Instead, the goal is to back teams that have spent time learning about an industry and its inner workings and who fully understand the problems they want to solve before ever writing a single line of code. When bringing automation to old industries, knowing things like how truckers get paid or how train system operators read instructions is more important and influential than simply applying the latest machine learning techniques.
“I just don’t see a lot of automation companies whose superpower is going to be ‘I have better algorithms’,” Ajao said. “I see a lot of companies, or I hope to see a lot of companies, whose competitive advantage is that I’ve spent the last six months in warehouses, I know this inside out, I’ve been doing it myself, and now I know the workflow and the people, and I know how to talk about it.”
Limited partners in the fund include executives from companies like Salesforce, Dropbox, and Instacart, as well as a number of university endowments and foundations.
Base10 has made a total of 10 investments thus far, primarily in companies in Silicon Valley but also in transportation companies in Brazil and Mexico.
Previous investments include Shipwell and RoadSync, startups looking to automate logistics, and birth control delivery company The Pill Club.
Base10 Partners is headquartered in San Francisco and currently has four employees, a company spokesperson told VentureBeat in an email.