Base10, the San Francisco early-stage venture firm founded by a pair of entrepreneurs and investors, today is unveiling its first fund, a $137 million vehicle that nearly doubled its initial $75 million target.
Limited partners in the fund include university endowments, foundations, large family offices and funds of funds, such as Neuberger Berman.
Other LPs include founders and executives from Salesforce, Instacart, Dropbox, Yelp, Coatue Management, Meritech Capital, Greenoaks Capital, IVP and NASA.
What’s attracting the LPs is a firm that aims to make seed and Series A investments in companies that automate processes.
All 10 of its initial portfolio investments follow this thesis of backing companies using AI and machine-learning technologies to analyze data and use it to automate old-school industries, such as transportation, HR, construction and logistics.
“We know AI, but we’re not an AI fund,” said Managing Partner Adeyemi “Ade” Ajao, who co-founded the firm last year with Managing Partner TJ Nahigian.
Ajao said it’s not about losing jobs to a robot, but rather using AI technology to serve an industry and move it forward.
“AI is a great tool,” Ajao said. “But our fund is more broad than machine learning and artificial intelligence. It’s about automating industries in the real economy.”
Examples of the company’s portfolio include Ethos Lending, a San Francisco company that focuses on the mortgage-lending business and aims to simplify the paperwork and signing required of loans; and Pill Club, a Redwood City, California, ecommerce site that automates the process of individuals obtaining access to birth control.
Other companies in the portfolio include Grin and Yellow, which are focused on automating transportation; Shipwell and RoadSync, which work in logistics; and Wonolo and Reflektive, which are in the HR category.
Base10 aims to lead its investments, with early-stage checks ranging from $500,000 to $5 million. Ajao said about one-fourth of the fund has already been deployed. He declined to say when the firm would seek a second fund.
So far, six of the firm’s first 10 investments have gone on to raise follow-on funding. Ethos Lending has since raised more than $23 million in funding and Pill Club has secured about $20 million in financing.
Base10, named as homage to the mathematical base 10 numbering system, is data-driven. The firm says it has built a Base10 Partners Program to work with industry-focused firms, such as Fifth Wall Ventures in real estate, Owl Ventures in education and Bessemer Venture Partners in SaaS to research how automation is affecting particular industries.
But Ajao says the firm uses a mix of data and leveraging his and his co-founder’s network to find entrepreneurs who are looking to automate their industries.
Ethos Lending, for instance, was launched by a former mortgage banker who wanted to reduce the volume and long process of signing loan documents.
Ajao and co-founder Nahigian have years of experience as investors and entrepreneurs themselves.
The Spanish-born Ajao, who is half Nigerian, was the co-founder and CEO of Tuenti, a Spanish version of Facebook that Telefonica acquired in 2010 for $100 million. He also co-founded Identified, which applied AI in HR and was acquired by Workday in 2014.
After the acquisition of Identified, Ajao launched Workday Ventures, which focused on applied AI in enterprise software.
His first investment through that was Jobr, a mobile job platform. Ajao said he invested in 10 companies through the corporate VC arm and has personally backed more than 50 companies, including Instacart, Dollar Shave Club and Cabify, the largest ride-sharing company in Latin America.
His investment in Jobr led him to Nahigian, who was co-founder and CEO of the company, which Monster.com bought in 2016.
Prior to Jobr, Nahigian was an investor at Coatue, where he helped the firm make late-stage investments in such deals as Snap, Lyft and Wish, among others. Prior to Coatue, he was an investor at Accel Partners.
Though there are a number of black-led VC firms, such as Cross Culture Ventures, Backstage Capital and Precursor Ventures, and black angel investors, such as Erik Moore, Ajao said Base10 is the first black-led VC fund to raise more than $100 million for its debut fund.
He cites an NVCA study that only 3 percent of venture investment professionals are African-American. Though Base10 invests in all startups, not just black founders, Ajao notes that he volunteers with CODE2040, which promotes and offers resources for black and Latin engineering talent.
The fund’s launch with more than $100 million “is a milestone but also a responsibility to make sure we make the case for a more diverse Silicon Valley,” he said.