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JFF’s Impact Investing Pays Off in Many Ways

July 12, 2022

At a Glance

Companies in the ETF@JFFLabs portfolio have had a positive impact on the lives of 15 million people, and the fund sees trillions of dollars of new opportunities for investments in technologies built to help talent-hungry employers train, upskill, recruit, and hire workers.

Contributors
Yigal Kerszenbaum Managing Partner
Practices & Centers

Today’s societal and economic realities have exponentially increased the scale and depth of the needs of people doing low-wage work. Millions who lost their jobs and faced unprecedented physical and mental health challenges at the height of the pandemic are now grappling with rising inflation and prolonged economic uncertainty. Among those facing the greatest challenges are individuals who identify as people of color, recent immigrants, and women of any background.

Our workforce and education systems may be falling short of meeting the needs of those workers, but at Jobs for the Future (JFF), we see an enormous opportunity to bridge the gaps with innovative new technologies. Toward that end, our impact investment fund, ETF@JFFLabs, is partnering with a diverse group of entrepreneurs who are building technology solutions that unlock economic advancement for all workers.

Opportunity Amid the Challenges

Despite these challenges, we believe that the labor market is rife with opportunities for people in low-to-middle-wage jobs. Millions of people have retired early or taken time out of the labor market over the past two years, resulting in what has been dubbed “the great resignation.” This has caused demand for talent to come soaring back at a historic rate. In this climate, employers are rethinking how they identify, hire, train, and retain employees at all levels to stay competitive.

A 2021 report from Accenture and Harvard Business School encourages employers to hire “hidden workers”—people who are looking for jobs and who possess, or could develop, the skills employers are seeking but are overlooked because hiring policies and screening tools focus on the degrees and credentials they don’t have. A February 2022 Harvard Business Review article indicated that doors may be opening for those workers because skills-based hiring is on the rise and employers are increasingly choosing to forgo degree requirements for many jobs. We believe that this shift will yield more equitable outcomes if accompanied by a new educational model called “skills-first learning”—an approach to credentialing that focuses on what people know and what they can do, not on the amount of time they’ve spent in classrooms.

Against this backdrop, we see a multi-trillion-dollar market opportunity for technologies and services built to help talent-hungry employers train, upskill, recruit, and hire the workers they need. Formed in 2017 as the Employment Technology Fund, (ETF), ETF@JFFLabs is prepared to take advantage of that opportunity. An early-stage fund, ETF focuses on supporting startups that are harnessing the power of technology and entrepreneurship to improve career opportunities for people in low- and middle-wage jobs.

In the ETF@JFF Labs 2021 Annual Impact Report, our team of impact investing professionals illustrate how an active entrepreneurial environment combined with high liquidity in the capital markets translated into a remarkable degree of investment activity last year.

Compared with 2020, we saw significant increases in deal activity, size, valuations, and in the speed at which deals closed. And alongside an increase in the number of players interested in the employment technology market, there was an upsurge in interest in our ETF@JFFLabs fund among mission-aligned entrepreneurs. Recognizing our niche expertise in workforce development and the future of work, multiple entrepreneurs opened closed rounds to include ETF.

15 New Investments, 15 Million Lives Impacted

We invested in 15 companies last year, exceeding our annual investment target. These new additions to our portfolio include a company that uses machine learning and predictive analytics to build recruiting and talent development applications that support skills-based hiring (AdeptID) and another that offers a mobile platform that employers can use to support and train members of the “deskless workforce” (Anthill). The lineup also includes a Certified B Corporation that runs a global hackathon league to help students build computer science skills (Major League Hacking) and a company that trains people to maintain electric vehicle charging stations (ChargerHelp!).

We are honored to report that our portfolio companies have had a positive impact on the lives of more than 15 million people in 12 states.

We also celebrate the caliber, commitment, and diversity of our founders. People who identify as women founded 59 percent of our 29 portfolio companies, and 69 percent of ETF company founders are individuals who identify as people of color. These statistics differentiate our portfolio from those of most venture capital firms.

We’re proud of our fund’s performance, and we believe that our work proves that investing in technologies to benefit workers in low-to-middle-wage jobs can be financially viable and profitable while also having a positive social impact.

We entered 2022 with cautious optimism. We believe that our focus on technology-driven workforce development solutions, our understanding of the needs of people doing low-to-middle-wage work, and our awareness of the priorities and practices of employers put us in a position to offer a unique array of services and support to early-stage companies working to address the challenges of today’s education and workforce systems. At the same time, we must also acknowledge that our country is in the midst of profound societal and economic change, which means we need to act with rigor to ensure that workers from populations that are most likely to be negatively impacted by these changes have opportunities to advance economically.

We’re ready to accept that challenge, and we’re eager to double down and get to work.

ETF@JFFLabs Annual Impact Report
Read more

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