The workplace as we’ve known it for the past decades is history – and that’s a fact. The current trends and challenges have given way to the notable rise of WorkTech. But what exactly changed, and how these changes will impact the WorkTech industry, is still subject to debate. Rubio, a Venture Capital firm investing into impact-driven scale-ups, is actively investing in the WorkTech industry. Led by partner Ilonka Jankovich, Rubio sees opportunities to invest in impact-driven scale ups in theWorkTech sector, since it is a very dynamic industry with promising opportunities to improve the current challenges of the job market. Female x Finance spoke to Eline de Haan, Impact Investment Analyst at Rubio, to dive deeper into her take on the latest trends in the industry, as well as the opportunities and challenges of impact investing in WorkTech.
First, let’s talk more about what exactly WorkTech is. In a nutshell, WorkTech relates to technology tools that help employees carry on with their tasks more efficiently. You’ve probably heard of Zoom, Slack, or Equalture! But it’s much more than that – think of recruitment chatbots, applicant tracking systems, training or development platforms, mental health platforms, etc. The WorkTech industry is expanding rapidly, and companies are being founded to tackle current and future problems in the labor market. This gives an impact VC like Rubio the reason to dive deeper into this sector.
The WorkTech market
Current trends and developments
Eline highlighted the most important developments that currently influence the job market, affecting the WorkTech market as well.
- Remote work vs. deskless workers: Companies have embraced remote work, but are struggling to keep employees engaged. The divide between deskless, frontline workers and those who can do their job remotely has become more clear.
- A high demand for psychological care: In post-COVID times, more people are (open about) struggling with their mental health.
- Diversity and inclusion: Awareness has increased to have diverse and inclusive hiring policies. Also driven by quotas to increase diverse representation in management.
- Pay transparency: With the high inflation, a competitive labor market for top talent and a need to achieve equal pay, we see a growing need for pay transparency and some start-ups active in this field are growing quickly.
- Shortage of frontline workers: only expected to increase in the upcoming years.
- Changing expectations of employment: this differs according to generation.
Where there’s a challenge, there’s an opportunity. Many start-ups focusing on the WorkTech sector have started to fill the gaps that the current job market dynamics have created, and at the same time, impact investors such as Rubio seized the opportunity for new, exciting investments as well.
Start-ups seek and find opportunity
As mentioned above, start-ups in Europe and beyond have seized the opportunities that arose with the current trends, and developed innovative solutions to address ongoing challenges, as Eline explains.
For example, US-based Clipboard Health is addressing the shortage in healthcare staff through their platform that allows accredited healthcare providers to book shifts which fit their schedule.
Moreover, addressing new employee demands is US-based Maven, who provide a family health and benefit platform which employers buy to support their employees with their (future) family care. Looking closer to home we see OpenUp, who are tackling the mental health benefit demands of employees. This is in high demand and as the problem is becoming larger, Rubio decided to invest earlier this year.
A lot of new initiatives also arise to tackle diversity and inclusion challenges: “we see many tools being designed to aid employers in facilitating an unbiased selection process and platforms focussed on specific diverse communities.”
Next to that, the global workforce is changing and the types of jobs that are needed in the future do not fit the skills that many employees have or are taught today. To mitigate this large and growing skills gap, companies are starting to develop smart ways to map the skills individuals have, or creating accessible education opportunities to reskill or upskill the workforce. Rubio aims to accelerate companies pursuing this impact which led to their investments into Skilllab, Microverse and Winc Academy.
The billion dollar question
Considering the general market conditions, this industry seems promising. But what are Eline’s predictions as to how it will continue to develop?
- “Increased attention to upskilling/reskilling of workers to transition to jobs where more workforce is needed.”
- “More innovation on how to accelerate the learning curve for these workers. Interesting to see how VR can play a role in this.”
- “The war on attracting and retaining (diverse) talent will push employers to be flexible and cater to the different needs of their workforce. The role of the employer will be more prominent in an employee’s broader life.”
- “A part of the next generation entering the workforce is earning on the side through a hobby or digital business which could change the ‘traditional’ labor market, for instance by more people leaving or working part time.“
With this industry expertise, it is exciting to see which predictions will turn to reality in 2023 and beyond. Who knows, perhaps one of them will become the “billion dollar answer”.
Rubio’s approach
Rubio invests into three impact themes: Circular Solutions, Healthy Systems and PeoplePower. Within People Power, WorkTech is one of the sectors they invest in along with EdTech, WellbeingTech and Fair supply chains. As Eline says “we don’t consider all WorkTech to be impact”. For Rubio, it’s important to understand “who the beneficiaries are of a solution, which problem the company is tackling and how much their solution is contributing to solving this problem”.
Among the companies that Rubio invested in within their People Power theme, there is OpenUp, a mental health platform for employees; Sama, an AI development platform with a human-in-the-loop component for which they train and employ disadvantaged young people from Africa.
Measuring the impact that these companies have can be difficult, as there are often a lot of factors to be taken into account that are simply not easily measurable. However, Rubio does have certain parameters to help them establish whether a company is successful or not:
“We take different parameters which are linked to the company’s core activities to measure the impact of a company. Each quarter the company reports on their impact KPIs next to their financial KPIs and every year we publish our annual impact report.
“At Rubio, we focus on investing into PeopleTech solutions that have a positive impact on an underserved community. We invest into companies that have the potential to change the system and create a new status quo.”
In the end, it all comes down to who you’re trying to help.
“We like to say PeopleTech and not just WorkTech, because it makes it clear it is about the person you are trying to help. In that we see that some solutions are more catered to those in society who struggle more, and others are nice to have or for people who already have a high degree of access to opportunities.
Some investments we recently made which increase access to education and employment include Winc Academy and Skilllab. Winc Academy teaches digital skills to adults that are unemployed or at risk of future unemployment, making the careers of these people ‘future-proof’. Skilllab’s skills-mapping technology is used by their customers to capture skill sets of marginalised job seekers and understand how they relate to professions and education.”
Clearly, impact investing in the WorkTech industry is challenging, but equally exciting. The rapid changes we have seen in the past two years are creating a dynamic market in which innovation can thrive. And Rubio is right in the middle of it.
