The new fund is focused on early-stage startups that aim to improve the lives of workers in sectors with low pay and insecure employment, using data and technology.
The Resolution Foundation has launched a new fund focused on early-stage startups that use data and technology to improve the lives of workers in sectors with low pay and insecure employment. The foundation secured £6.75m (€7.8m) in funding at first close, with a total fundraising target of £9m.
The WorkerTech fund, which the Resolution Foundation said is the first impact fund of its kind in the UK dedicated to technology seeking to improve low-paid labour, is backed by investors including the Resolution Trust, Big Society Capital, Joseph Rowntree Foundation, Ufi VocTech Trust and Friends Provident Foundation. The Resolution Foundation defines workertech as innovative technical solutions to the problems of low-paid and precarious work.
New technologies are changing the way companies manage their workforce, with some workers experiencing significant upheaval and even displacement. The WorkerTech fund wants to help workers benefit from this transition by supporting startups that are using technology to boost pay, address power imbalances, make training more accessible and provide pathways to progression and better prospects.
“We invest in fund managers who combine the right values and expertise to back a diverse range of impact start-ups. We are excited to see how this new fund can scale the number of companies they support that deliver meaningful impact for workers across pay, power, prospects and wellbeing. These ventures have the potential not only to change people’s lives through the products they deliver, but also to scale rapidly and reach more workers by drawing on the Resolution Foundation’s research and insights,” said Matthew Jenner, investment manager at Better Society Capital.
Boosting living standards
Founded in 2005, the Resolution Foundation is a UK-based independent think-tank focused on improving the living standards of those on low-to-middle incomes. There are currently eight million low-to-middle income families in the UK, including 12 million adults and nearly seven million children.
The new fund, which was developed by the foundation’s ventures team, builds on five years of investments in workertech firms by the Resolution Foundation that have reached more than 358,000 workers across the UK. These include start-ups that use tech to provide transparent information about hourly pay, which has been a contentious issue in the gig economy for a long time.
Portfolio companies include Organise, which brings workers together to collectively seek better terms and conditions and last year secured night-shift workers at multinational security firm G4S an annual pay rise of more than £2,107. The foundation also invested in legal tech platform Valla, which helps workers resolve workplace issues without the need for legal representation, and TaskHer, an online platform that connects skilled tradeswomen with homeowners who prefer to book women for their jobs.
To date, more than 20,000 workers are using services from its existing portfolio companies, while more than 5,600 have seen “transformational” improvements in their pay, prospects, worker power or wellbeing, the foundation said.
First exit
The Resolution Foundation made its first workertech exit last year, when its portfolio company Breakroom – an online employer review platform – was bought by US online employment platform ZipRecruiter. This deal showed worker-focused start-ups can build sustainable businesses while creating lasting social impact, the foundation said.
The fund plans to make up to 50 investments in the next five years, targeting pre-seed and seed-stage ventures of between £75,000 and £200,000 with the potential to positively impact hundreds of thousands of UK workers.
“We wanted to create a fund that prioritised positive social impact, that welcomed founders from all backgrounds, and that could seek out great ideas that could benefit workers as well as having a strong business model,” said Louise Marston, the foundation’s director of ventures.
