Gender-Smart Investing: More than two dozen new funds investing with a gender lens



ImpactAlpha, October 17 – I’m getting calls regularly from people who are starting new funds or who want to reshape the funds they already have to include a gender lens. Many of the funds featured in Project Sage last year have raised a lot more capital.

Catalyst At Large and the team at Wharton Social Impact Initiative are starting work on Project Sage 3.0, our ongoing global scan of private equity, venture capital, and private debt funds that incorporate a gender lens in their investment strategy.

Already, we’ve tracked at least two dozen new funds, which will be part of the new Project Sage report next spring. Here’s a sneak peek at a selection of the exciting and innovative new funds emerging in the field of gender-smart investing. Note: These are not recommendations, and do not reflect any preferences among funds that will be featured in next year’s report.

Bumble Fund

The female-focused dating app Bumble’s corporate VC fund focuses primarily on businesses founded and led by women of color and those from underrepresented groups. The company points out that the percentage of venture capital that flows to all-women teams has stagnated around 2% (and far lower for women of color). But this isn’t due to lack of founders to fund: the number of women-owned businesses grew 58% between 2007 and 2018, and the number owned by black women grew by 164%. Tailored to early-stage founders seeking seed or Series A funding, Bumble’s average check size is $25-50,000.

Housing Fund For Vulnerable Women

U.K.-based Big Society Capital is teaming up with Resonance and Patron Capital to create a housing fund for vulnerable women as part of a broader investment strategy to tackle Britain’s affordable housing. The decision to create a fund specifically focused on women was based on research showing that many women’s sector organizations lack suitable and affordable housing, which can limit their ability to deliver vital services to victims of domestic violence and other vulnerable women. 

More than two dozen new private gender-lens funds launched in 2018

Ilu Women’s Empowerment Fund

A collaboration between impact investment firm Deetken Impact and women’s empowerment organization Pro Mujer, the Ilu Fund was created to support women entrepreneurs in Latin America and the Carribbean. Created with support from OPIC and others, the partnership is unique because Pro Mujer is not just a recipient of capital, but embedded into the investment management as an equity partner, with input into investment sourcing, due diligence, and decision-making. Portfolio investments include financial institutions that provide services for low income women, as well as gender-smart investments in renewable energy, affordable housing, and social enterprise.

Japan Impact Investment II Limited Partnership 

Bringing together the resources and expertise of Shinsei Impact, Mizuho Bank, and Japan’s Social Impact Investment Foundation, the Japan Impact Investment II Limited Partnership is focused on childcare, nursing care, and new work style-related businesses, investing JPY100 million to JPY500 million in early-to-later stage companies. The fund completed its first closing at JPY2.2 billion (more than US$20 million) and aims to improve knowledge about impact investing in Japan, positioning it as an “economic country solving social challenges” while securing both economic and social returns.

Renew 

Ethiopia-based impact fund Renew has announced a new $500,000 “mini-fund” investing exclusively in early-stage, women-led companies. The fund was created to meet the unique needs of African women entrepreneurs, who outnumber their male counterparts and equal them in efficiency and growth-orientation, but who have a harder time accessing banking and supplier relationships. The fund is a public-private partnership between Renew and Global Affairs Canada, which is providing grant funding to lower the transaction costs for investors.

SAP.iO No Boundaries 

SAP’s corporate venture fund SAP.iO has committed to set aside 40% of its investable capital in business software start-ups led by women and founders of color. Their goal is to help at least 200 start-ups around the world in the next five years. As part of this effort, they are scaling up eight global “foundries,” cohorts of founders working with a social impact lens. The first foundry launched in New York in January 2019. 

Six sources of ‘gender alpha’ and other takeaways from Agents of Impact Call No. 5 (audio)

Serena Ventures

Founded by tennis champion Serena Williams and with a mission to “ignite change,” Serena Ventures has invested in more than 30 companies, including The Wing, Lola, Daily Harvest, and Mahmee. Serena Ventures looks for companies that embrace diverse leadership, individual empowerment, creativity, and opportunity, mentoring the young founders they invest in to take them to the next level. (In April, Serena was featured as ImpactAlpha’s Agent of Impact on Instagram). 

TEJA Ventures

TEJA’s investment strategy aims to leverage the economic potential of women in Asia – valued at US $8 trillion in 2020 – as a demographic across the entire value chain of investment. It combines traditional investment criteria alongside a gender lens methodology focused on organizational diversity, economic impact, and woman-focused products.

The Twenty65 Fund

Led by Abyah Wynn, a vocal advocate for women and people of color, Twenty65 is a new fund from an existing GP, Trimantium. Recognizing the enormous purchasing power of Black and Hispanic consumers and the demand for products and services that meet the needs of those communities, the fund is committed to democratizing access to venture funding, from investors to entrepreneurs. 

WaterEquity

Focused on access to safe water and sanitation, WaterEquity has been around for a quarter-century. Their move to bring an intentional gender lens to their work is newer, in recognition of the disproportionate impact the issues they address have on women and girls. As climate change intensifies, by 2050, one in four people globally will be living in a country affected by severe water shortages. And as the people most often tasked with collecting water, safe water and sanitation correlate strongly with girls staying in school and women’s ability to participate in paid work. 

We Are Jane

Belgian-based, BeNeLux-focused venture fund We Are Jane bills itself as “an investment fund by women, for women.” Led by an all-woman management team with 50% of investment capital coming from women investors, We Are Jane provides growth capital to businesses with a female owner or CEO and proven track record of success – companies must have a 1.5 million Euro turnover and at minimum break even. https://impactalpha.com/investments-vehicles-that-benefit-women-are-proliferating-across-asset-classes/

Female fund managers make the case for ‘gender alpha’ in emerging markets

This is just a small slice of the innovation and energy in the gender-smart investing field. Here are a dozen-and-a-half more new or new-to-us funds that we’re exploring. 

1863 Ventures

Ada Ventures 

Altra Fund III 

The Artemis Fund 

Aruwa Capital Management

Cleo Capital

Disruption Ventures

Fierce Capital 

Firebird Fund Managers 

JumpStart Evergreen

Macro

Manna Tree Partners

MAS Equity Fund IV

NCIF 

Outlines Venture Group

New Voices Fund

Pier 70

Spero Ventures

Six sources of ‘gender alpha’ and other takeaways from Agents of Impact Call No. 5 (audio)


Suzanne Biegel is the founder of Catalyst at Large and co-producer of the Gender-Smart Investing Summit

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