Supply Chain
New Venture Fund Aims to Rapidly Scale Ethical Supply Chain Technologies

On January 30th, Humanity United, a California-based foundation and leader in supply chain advocacy, announced the launch of a $23 million venture fund to invest in ethical supply chain innovations. The Working Capital Fund is unique in that it will not issue grants, but rather make real investments in companies with the goal of accelerating the process of building scalable solutions to improve labor practices in the global supply chain.

“[The fund] has an impact-first lens to it, which means our first priority is to identify innovations that will mitigate labor rights risks and ultimately benefit worker welfare,” said Ed Marcum, Managing Director of Working Capital Fund. “The focus of the fund is to provide the right kind of capital … to help [companies] scale and meet the demands of large-scale, sophisticated global supply chains.”

The fund is supported by a wide variety of initial investors, from the British Government; philanthropic institutions such as the C&A Foundation and Open Society Foundations; and companies such as Walt Disney and Apple. A key supporter is the Walmart Foundation, the philanthropic arm of the country’s largest retailer, which, by definition, means it is connected to vast, complex global supply chains. The organization is eager to invest in tools that could be used not only by its namesake company, but by other industries as well.

“The long-term vision of success is that the scales of these tools can be adopted widely across a number of actors and lead to dignity in work truly becoming the norm,” said Karrie Denniston, Senior Director of Sustainability at the Walmart Foundation.

The fund’s focus is on tools and solutions aimed at tackling various transparency and ethical labor challenges associated with complex supply chains. It will invest in emerging technologies such as blockchain, machine learning, artificial intelligence, digital identity and Internet of Things (IoT) solutions.

Working Capital is already investing in two promising projects. The fund’s first investment was in Provenance, a UK-based blockchain startup developing data-driven tracking tools. Provenance has already tested its technology to track tuna fisheries in Indonesia, and with the support of Working Capital, expects to soon expand into other industries.

“Provenance’s blockchain traceability software enables various supply chain stakeholders to act and improve working conditions along supply chains,” said Dan Viederman, Managing Director of the Working Capital Fund. “Provenance could also reduce the cost for multinational corporations [to trace] their products.”

Working Capital has also invested in Ulula, a tool that works with the mobile phones workers already have to gather data on working conditions across supply chains. Working Capital is now exploring the potential of companies developing algorithmic sourcing platforms, labor risk assessment tools that use big data and machine learning, and tools designed to protect digital identity, provide safe contracts, or lower-cost digital payments.

“We’re very excited to hear from entrepreneurs with new and innovative ideas that can help tackle systematic supply chain challenges, and we hope we will be in a position to support them,” Viederman said.

This, Viederman hopes, is just the beginning. One of the most exciting aspects of the venture fund is that both private sector and nonprofit organizations, such as The Retail Supplier Roundtable and The Responsible Sourcing Network, are eagerly awaiting the tools Working Capital is investing in.

“The corporate commitment is there, what they lack are the tools,” said Viederman. “If we can generate the tools at a level of technological sufficiency through our support, there is a large market ready to adopt them.”