Adeyemi Ajao’s VC Firm Base10 Partners Doubles Size Of Latest Fund To $250M
The venture capital world is known for being mainly white and male, but a VC firm named Base10 Partners is out to change all that. Managing partners Adeyemi Ajao and TJ Nahigian are going down unpaved roads to find investments outside of Silicon Valley venture firms and they have announced a major move.
Base10 says it has raised $250 million from investors in its second round — almost doubling the size of its previous round. Already the largest Black-led venture fund, this latest move will allow the firm to increase its commitments to promote Black representation. Base 10 has committed to giving 1 percent of the firm’s and general partners’ profits to organizations that support such causes, Business Insider reported.
Base10 has a much more Black representation than the typical venture firm, according to Ajao. In fact, 60 percent of the founders that Base10’s $137-million fund backed are Black people, people of color and women.
Ajao is considered one of the most successful VCs on the scene. Of Nigerian descent, he grew up in Spain and came to the U.S. 12 years ago.
“We’re now more visible, and we do think that with more visibility comes more responsibility,” Ajao told Business Insider.
Two-thirds of venture firms didn’t have a single female partner and only 3 percent of all partners are Black, according to 2018 data from the National Venture Capital Association. Just 1 percent of venture-backed founders are African American, and 9 percent are women, according to a 2019 report from RateMyInvestor and Diversity VC.
The equality movement sparked by the death of George Floyd means the VC industry has to step up, Ajao said.
“If there’s ever a time to step forward, it’s now,” Ajao told Bloomberg. “For years, we’ve been hoping to prove that investing in diversity was good business, and we thought that would be our contribution, but it has become clear in recent weeks that that is not enough.”
Base10 takes a different approach to find Black founders, founders of color and women, Ajao said.
“The firm’s overarching investment thesis is that automation is in the process of transforming the so-called real economy — industries like agriculture, trucking, and restaurants,” Business Insider reported.
“We look at large, old-school industries—I don’t like to use the word ‘unsexy,’ but it is those industries that Silicon Valley isn’t really into, like real estate, construction, and retail,” Ajao told Crunch Base. “We see the need for automation, and the conversation has gone to essential services.”
To date, the company has backed nearly 30 companies.
San Francisco-based Base10 does extensive research in particular industries and then decides whether the time is right to invest and tries to find the best companies in the space. The firms in its portfolio are based everywhere from Atlanta to Sao Paulo, Brazil. One is the startup RoadSync, was founded by a Black man and has a woman CEO.
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“Our underlying thesis is we’re going to have to find founders where they’re at, and that is easier when you don’t actually rely on networking,” Ajao told Business Insider. “Our guess is they are everywhere, and that’s going to lead to more diversity.”
He added, “We just want to make good financial returns. We believe that investing in diversity will lead to good financial returns.”