Machismo, poverty and polarization : Latin America is known for being one of the most unequal regions in the world. But a paradigm shift is underway as ethical technology is being used to reduce bias in polarized and exclusive societies. We had the amazing opportunity to speak with Santiago Álvarez, co-founder and managing partner of Alive Ventures. It is a new type of Latin American fund manager that puts generating impact at the forefront of what they do. Santiago shares his experience investing in and working with social entrepreneurs and extraordinary cases of how social entrepreneurship is using technology-based solutions to close the gaps in the region are becoming tangible.
At Alive Ventures, it’s about finding companies that share the same passion for generating positive change – and that have the impact gene in their DNA. Alive Ventures provides these companies with capital – called ‘early growth’. They support companies that have already had some traction in the market, testing a product, testing a thesis that will be viable in the future but need capital to continue to grow and more importantly to go international with their model. Not only do they provide these companies with capital but they also give them access to markets, access to contacts, to different knowledge as many entrepreneurs struggle in these areas. Santiago explains that they have been building a portfolio of eight companies, five of which are in the area of technology-based education and also what we call Network Tech, which are companies, for example, that are helping to systematize recruitment processes.
To give a concrete example, a few years back they invested in a company called Levy, it is a Brazilian company, but it is expanding to Colombia and Mexico. They have created an automated the basic personnel selection process: For large corporations, the selection and retention of this type of workers is a very big challenge due to the large turnover. Through automating the selection process and collecting large amounts of data, Levy have successfully been able to identify the best variables for predicting the retention of this type of worker. And as a result of this they have managed to change the paradigm. Normally, in a resume education comes first, then your previous experience, etc.. Consequently, biases and judgements are formed through these conceptual frameworks that we have in our heads. But with this automated tool, variables can be identified : One of the best predictors of retention for this type of worker is the distance from home to work – something you won’t find on any resume. It’s an excellent example of how technology can remove barriers for minorities and women, for displaced people, who were previously filtered out negatively because of these implicit issues that we all have, but now through this automation process they are granted access to opportunities they previously did not have. This is an example of how intelligent, ethical and responsible algorithms can also be created with the inclusion of minorities, which is something that is generally not taken into account at all when we think about artificial intelligence.Santiago explains how every day both the company and all of us continue to learn how to improve their algorithms, how to make a very responsible use of technology and of the inputs that are also given to these different tools to make their processes.
It is a natural improvement processes, we are using a responsible philosophy of trying to eliminate barriers, biases and to generate access, even though they are not perfect at the moment, the results are far better than the alternative, for example the selection process done by humans in the traditional way.
When Alive Ventures was born, their mission was to support initiatives that helped reduce poverty and inequality in Latin America – a region where gender inequality is deeply rooted and macho culture is very strong. Alive Ventures wanted to eliminate gaps, poverty, but without consciously tackling the gap in gender inequality, it means consciously leaving one of the major components of gender inequality out of the equation. So they decided to take a new approach and loot at their investment process through a ‘gendered lens’. But what does that look like in practice? It means that every time they decide to make an investment from the due diligence process, they look at how the issue of gender equality or inequality is impacting that level of investment, of the value chain. They seek to support companies, entrepreneurs and founders who have a commitment and awareness to try to reduce these gaps. Of course it must be pointed out that they are not proposing to only invest in companies led by women or where the young people are women. If they were to take that approach they would be leaving out 99.9% of the potential market – due to the entrepreneurial sector being dominated by males.
What we want to do is to try to support the transformation of current companies that have generated an awareness of the gender inequality that exists and that have to go down a path and implement practices to reduce these gaps.
Once they invest in a company, they then carry out various exercises with them in order to try to understand where the main gender equality gaps are, within the company and its ecosystem. They also work closely with Value for Women, experts on the subject, who work hand in hand with the company to generate action plans that allow the company to improve its processes and its value chain over time. Its about a comprehensive approach because it is not about discriminating against other groups. Just because an organization is not led by women does not mean that the impact it is having on the issue of women’s inclusion is super positive. So that is what is meant by a gendered lens, a concrete action plan to improve the gaps in our portfolio and hopefully in the value chains in which they operate. The easiest way is to go to our website www.alive-ventures.com – there is access to information about the type of investments we make, how we support and there is a contact form to contact the team directly, either because you are an entrepreneur, an ecosystem actor and you think we can work together or also because you are an investor and you think that the work we are doing may be interesting for your thesis.
