Dealflow | October 11, 2022

Amazon Catalytic Capital to invest $150 million in underserved founders

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, October 11 — Amazon has launched Amazon Catalytic Capital to invest in at least 10 venture capital funds, as well as accelerators, incubators and venture studios. Amazon will deploy the capital over the next year to support more than 200 early-stage startups led by Black, Latino, Indigenous, women and LGBTQIA+ founders.

“We’ve seen incredibly innovative ideas from entrepreneurs – from companies offering inclusive health services for women to startups helping companies mitigate climate impact for underserved communities,” said Amazon’s Peter Krawiec. “We want to ensure that these companies and their founders have the same access to capital as anyone else.”

The Amazon initiative has backed four funds to date, including Black-owned Collide Capital and Energy Impact Partners’ Elevate Future Fund, which invests in underrepresented founders with low-carbon solutions for underserved communities. Elevate will partner with Amazon’s Climate Pledge Fund to invest in emerging climate tech companies.

Returns on inclusion

Amazon Catalytic Capital is the latest initiative from the e-commerce giant targeting early-stage entrepreneurs from underrepresented backgrounds.

Amazon in April launched AWS Impact Accelerator with $30 million to support early-stage startups led by women and minority founders. Last year, Amazon committed $150 million through its Black Business Accelerator to help Black business owners succeed as sellers on its online store.

First-time fund managers

First-time impact fund managers tend to outperform more experienced peers. MassMutual is looking to invest $100 million in first-time Black, Latinx and Indigenous fund managers via its First Fund Initiative. The insurance company launched the program last year with $50 million. Investments include funds from Latino-owned venture firm L’Attitude Ventures and Black woman-led Impact America Fund.

MassMutual also launched a $50 million MM Catalyst Fund last year to catalyze capital from other institutions in Black-led businesses based in its home state of Massachusetts.