October 12, 2021
How Sama is Proving Impact is a Strategy for Business Success
Last week, our portfolio company Sama secured $70M in Series B funding. The largest round for a female-led AI infrastructure in history and the second round of equity financing for the company. This marks the transition from solidifying product-market fit to truly taking the business and impact to scale.
On the road to Series B, Sama has received many recognitions for its innovative technology and impact sourcing model, including inclusion on the Forbes AI 50 and Fast Company’s World Changing Ideas lists.
That said, getting to this milestone has not been straightforward. The team had to overcome the ‘valley of death’ and bust many myths along the way. One by one. A few of them we highlighted below, cementing the viability of purpose-driven companies and hopefully inspiring others to bust myths on their path to purpose and profitability.
Myth #1: Diversity is a pipeline problem
We have all seen the data in one shape or form: white men get the lion’s share of investor funding. Despite the movements calling for diversity, women-led startups account for just 2.2% of the $150 billion invested in companies by VCs annually. Many have argued that the lack of diversity is caused by a pipeline problem, that there simply are not enough qualified investment opportunities – especially as it regards tech businesses. With the Series B raise, Sama paves the way for busting the myth once and for all.
Female-founded and led
Sama is a female-founded and led tech company that is deploying an impact sourcing model creating opportunities for marginalized communities, with over half of Sama agents intentionally being women. Founded by late Laila Janah and now led by CEO Wendy Gonzalez, the company has achieved responsible hyper-growth, and consequently, for the second year, a spot on the Inc. 5000 list as one of America’s fastest-growing private companies. The data speaks for itself.
The largest round for a female-led AI infrastructure in history
As mentioned before, Sama’s Series B raise represents the largest round for a female-led AI infrastructure in history. The round is led by CDPQ’s Equity253 fund that targets companies that leverage diversity and inclusion as a vector of development. The fund is put in motion because studies clearly validate that diversity in companies fosters better decision-making and has a positive impact on innovation, risk management, productivity, and financial performance.
Myth #2: Impact requires a trade-off between purpose and profit
Although impact investing has become more mainstream over the past decade, the notion that there is a trade-off between impact and financial return is still very much alive — despite academic evidence pointing to the opposite. While purpose-driven companies may integrate impact in their business models in different ways, Sama’s Series B raise solidifies the fact that there is no trade-off between purpose and profit as you grow, when impact is inherent to your value proposition and product.
Workforce from low-income backgrounds
The company partners with big corporations—Google, NVIDIA, Walmart—to provide them with quality data to train their machine learning models. Sama provides high-quality annotated text, images, and videos for a range of use-cases, powering robot-assisted surgery, autonomous vehicles, personalized online shopping experiences, and more. Sama hires over 90% of its workforce from low-income backgrounds and marginalized populations in Kenya and Uganda, training them and granting them employment in the digital economy. Sama is also an anti-ghost work company. Each of its employees is hired ethically and receives fair compensation and benefits.
For over 10 years, Sama has partnered with leading global brands. Their stellar commercial performance has been achieved as they continue to scale opportunities for underserved individuals through the digital economy. Sama was one of the first AI companies to become B-Corp certified and has helped over 56,000 people lift themselves out of poverty. Its training and employment program was recently validated by an MIT-led Randomized Controlled Trial, confirming the effectiveness of its impact sourcing model by demonstrating that individuals that received both training and inclusion in Sama’s hiring pool exhibited lower unemployment rates and higher average monthly earnings.
Or as David Atkin, Professor of Economics, MIT describes it: “Sama’s openness to evaluate the impact of their programs with the rigor of a randomized control trial was refreshing and shows that they’re a leader in the movement toward ethical practices within the AI industry.”
Myth #3: Impact does not fit the venture capital model
Sama started as a non-profit organization because no one believed it could ever be a business. When late-founder Laila Janah pitched venture capitalists on Sandy Hill Road, the impact sourcing model was disregarded as it ‘did not fit the typical parameters of hyper-growth and capital efficiency’. On the opposite side of the spectrum, grant givers did not believe that impact sourcing could meet the basic needs of the marginalized communities.
Sama proved both groups wrong. The company was ahead of its time, but luckily the landscape has changed a lot since then, and with the Series B raise, Sama is showcasing that impact is fit for staged financing. Since 2015, with Wendy Gonzalez on board, the company has focused on building a repeatable and scalable business model. From 2016 and onwards, Sama sustained itself on earned revenues and transformed in 2019 an impact driven for-profit AI technology company. Shortly after that Sama completed their USD 14.8M Series A funding with venture capital Ridge Ventures leading the round supported by Rubio Impact ventures (fka Social Impact Ventures), Bluecrest Limited Capital, Salesforce Ventures, and Bestseller Foundation.
The time is now
Today, Sama has taken the next step in its journey with the Series B raise that will take its purpose and profitability to new scales. In 2021, the landscape of impact investing looks different with the proliferation of many asset classes that are embracing an impact lens, covering the whole investment lifecycle. The time for launching an impact business is ripe and a big recognition goes to founders like Leila Janah, who ahead of her time proved the viability of purpose-driven businesses.
Let us bust more myths together, one by one!
** This post was jointly authored with Amanda Durepos, Sama article and BESTSELLER FOUNDATION. **