The rising social and economic power of women venture is global mega-trend that venture capital is beginning to notice.
Suzanne Biegel, a longtime gender lens investor and advisor, and the team over at the Wharton Social Impact Initiative have pulled together one of the most comprehensive lists of private equity, venture capital and debt funds explicitly investing with a gender lens.
Project Sage is a roundup and analysis of nearly five-dozen venture funds strategically investing in women. The funds have a combined targeted fund size of nearly $2 billion. To date, the funds have raised $1.3 billion and backed more than 650 companies.
A gender lens can mean different things to different investors. Included: Women-led companies, companies that improve the lives of women and girls, and “companies, funds, and investment vehicles with a focus on women throughout value chains, products and services, or leadership,” according to the report. Not included: investments into companies or investment vehicles that only incidentally impact women, like a micro-finance institution without an overt gender focus.
A billion or so from private funds and another $560 million invested with a gender lens in public equities and debt, still pales against the opportunity: $28 trillion. That’s what the McKinsey Global Institute estimates the potential addition to global GDP by 2025 if women participated equally in the global economy.
Still, venture capital seems to be taking notice. Three dozen of the 58 Project Sage funds are first-time funds; an astounding 21 were launched this year alone. Tech and health companies dominate Project Sage portfolios. Only a dozen are located in emerging markets.
Women are largely running gender lens-explicit funds. Nearly six in 10 Project Sage funds have all women partners. That’s a shocking fact, considering women’s representation in the broader venture capital space. A Crunchbase study from last year found only 7% of the top 100 venture funds had a women partner. (This too might be beginning to change; see, “Venture capital starts to woman up”).
Women’s leadership in gender lens investing comes with a caveat, say the report’s authors. There’s an inverse correlation between fund size and the proportion of women fund partners. “The more women at the top, the less capital raised,” write the authors.
The funds in Project Sage’s impressive database range in size from the $1 million pilot fund from Next Wave Ventures (and co-managed by Portfolia), a network of women angel investors, to the $400 million third fund from DBL Partners, led by Nancy Pfund, which has backed seven women-led companies (out of 12 investments).
Other notable funds include funds I and II from Backstage Capital (which did not provide the fund sizes), founded by Arlan Hamilton, which has backed nearly 60 U.S. companies with founders who identify as women, people of color, or LGBT.
The $2 million Patamar Investing in Women Fund, part of the $45 million managed by Patamar Capital (formerly Unitus Impact) with a mixed team of men and women led by CEO Geoff Woolley. The fund is looking to invest in six to eight highly scalable women-led businesses to ride economic growth and the rising middle class in Southeast Asia.
The $15 million Saha Fund, an Indian venture capital fund, has backed eight fintech, education and healthcare companies that promote gender parity and increase women’s participation in the workforce as employees, leaders and entrepreneurs.
Why bet on women? ImpactAlpha’s “Women Rising in India” package provides a guided tour: