Beyond The Billion, a global consortium of venture funds and limited partner investors, have invested in almost 800 female-founded companies globally including nine women-led unicorns
WASHINGTON D.C, DEC 8, 2021—Beyond The Billion, whose first pledge campaign (launched as The Billion Dollar Fund for Women in 2018) mobilized a global consortium of venture capital funds (VC) and limited partner (LP) investors, today released Our First Billion Global Impact Report, assessing the results of that two-year campaign. Launched to address the gender venture funding gap where female founders were only receiving 2.2% of venture capital, the campaign was the first-of-its-kind global capital commitment campaign focused on gender-lens investing, a bold measure to inspire venture capitalists to pledge to invest more into female-founded companies. While the pledges made were not legally binding, the results demonstrate that participating funds have taken their commitment seriously.
This report, published with support from Pacific Western Bank, Mastercard, Bank of America and Motley Fool Ventures, found that the consortium deployed 61% of their pledged amount in just two years into almost 800 female-founded companies—nine of which were recognized as unicorns, with the remainder expected to be deployed by 2023. An additional analysis from a sample size of 479 of the deals tracked by the consortium’s data partner, PitchBook, showed that these portfolio companies with female founders, have gone on to raise over $4 billion within the timeframe of the 2018-2020 pledge campaign.
“Innovative female founders globally are solving some of the world’s most pressing problems and we at Beyond the Billion are excited to report that so many of them have now obtained funding in the last two years thanks to the capital deployed by our partner funds. Whether investing in digital health, medtech, online payments or technologies in other sectors, these savvy VCs are enabling women-led companies to scale with huge implications not just for their own returns but for a better world for all of us,” said Shelly Porges, Co-Founder & Managing Partner of Beyond The Billion.
Sarah Chen, Co-Founder & Managing Partner of Beyond The Billion added, “The results of our first billion dollars campaign is a testament to the collective power of a community of investors activated around a specific goal. Through an unexpected global pandemic, our partner funds have remained steadfast in their commitment not only to investing into female founders, but also to addressing real structural issues to close the gender venture funding gap. As the report demonstrates, our work is nowhere near done, but we are celebrating this important milestone and commend all our partner funds on their deployment.”
With the support of data partners, PitchBook and DealStreetAsia, this report reflects the aggregate performance of participating funds relative to their pledges and supplements current datasets on the gender venture funding gap at a global scale. It also provides a deeper look into these global trends via a microcosm of investors who have explicitly committed to investing incremental dollars into female-founded companies. The report addresses three core questions, namely, how much of what was pledged was deployed, what trends were observed, and what limited partners who invest into venture capital funds, and general partners managing those funds, can do to better fuel women-led innovation. The report features insights from over three dozen founders and funders on their experiences in raising and deploying capital to achieve their overall goals, including diversifying their portfolios; globally, outside of the usual confines of traditional venture markets.
Kay Parry, Managing Director, Venture Banking of Pacific Western Bank that sponsored this report added, “There is growing recognition in the venture industry that great ideas and successful entrepreneurs can come from anywhere, and the best returns are achieved with diverse teams. We have seen this play out in our business with an increase in the number of funds based outside of traditional large venture markets – the Valley & New York – and those that are led by women and/or other underrepresented groups. As importantly, this recognition extends to the LP community where we consistently hear that diversity within portfolios is now a part of their diligence process. We have also seen an uptick in the number of LPs with established dedicated allocations to funds led by women and other diverse groups, which is tremendous and should help great new funds come to market in the next few years. We are excited by the progress made in 2021 and remain committed to working toward the goal of a private investment industry that more fully reflects the breadth and depth of innovators and risk-takers in our country.”
Key Takeaways Uncovered by Beyond The Billion’s Our First Billion Global Impact Report
Despite an unexpected global pandemic, funds remained resilient:
- In under nine months, 86 funds with assets under management of more than $12 billion pledged just over $1 billion to be deployed by December 31, 2020. 61% of this capital or over $638 million was deployed by December 31, 2020.
- Close to 800 companies with female founders received investments. Of these, 69% were mixed gender teams, and 31% were all-female founder teams.
- As tracked by PitchBook, a subset of 479 of the women-led portfolio companies of pledged partner funds went on to raise more than $4 billion within the timeframe of the pledge campaign (2018-2020). Pledged partner funds also reported investment in nine female-founded unicorns at the time of publication.
- This amount was deployed across 13 different sectors, with the top three invested sectors being E-commerce, Software-as-a-Service (SaaS) and Fintech.
- This amount was deployed across five regions, with the top three being North America (>$374M), Europe (>$121M) and Asia (>$82M).
- LP investors, even those committed to investing in diversity, must re-engineer their processes to increase the diversity of their portfolios. A mismatch exists between legacy LP structures and expressed goals to diversify portfolios showing that systemic bias requires systemic solutions. Despite the best of intentions to back both diverse fund managers and those who invest into diversity, LP investment profile constraints such as check size and track record requirements hinder the ability of emerging fund managers to attract capital.
- The issues faced by general partners (GPs) mirror the issues of LPs with systemic barriers representing as much of a challenge as personal ones. There is no “pipeline problem” when it comes to funds seeking female founder dealflow. Rather, fundraising is by far, one of the biggest challenges faced by fund managers investing into female founders. Almost half of all funds (48%) that were part of this pledge campaign shared how they greatly underestimated what it took to raise their funds; especially if they were deemed to be within the Emerging Manager category (which many LPs define to be Funds I,II, or III). Despite the fund manager’s experience in brand name firms and robust deal flow of female founders, many were hindered from timely deployment due to delays on the fundraising end.
- Fundraising while a female founder, is still an experience mired in systemic bias. Female founders interviewed shared how they had experienced biased lines of questioning and noted how the vast majority of investors’ examples of past patterns of success were almost exclusively referencing male founders. They were encouraged by encountering investors who recognized the opportunity to invest in female founders as a chance to improve their returns and who had committed to this as part of their investment strategy.
To download the full report, click here.
About Beyond The Billion
Beyond the Billion’s (BTB) first pledge campaign was launched as The Billion Dollar Fund for Women at the World Bank meetings in Bali in October 2018 with an audacious goal of catalyzing $1 billion into the hands of female founders globally, addressing the gender venture investment gap where women were receiving only 2.2% of all venture capital funding. In less than a year, BTB mobilized a global consortium of more than 80 venture funds committed to investing $1 billion in women-founded companies. Building on this momentum, founders Shelly Porges and Sarah Chen launched Beyond The Billion’s second pledge cohort to catalyze capital deployed to and with these venture funds, and ensure continued investment by mobilizing limited partners (LPs) and connecting them to general partners (GPs) who invest in venture-backable companies founded by diverse women.
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About Pacific Western Bank
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Anna Snider, Managing Director and Head of CIO Due Diligence, Bank of America:
Diverse fund managers tend to allocate more capital to women and diverse founders than non-diverse allocators. At Bank of America, the diversity of our investment managers and whether they allocate capital to women and diverse founders is an important focus. Our clients, both individual and institutional, are demanding greater transparency about how their capital is being allocated, and we are committed to meeting their needs. We have incorporated diversity, equity and inclusion criteria into our investment conviction in the managers in whom we entrust client capital.
Ann Cairns, Executive Vice Chair, Mastercard:
Despite past year’s challenges, there was no doubting the wealth of opportunity for burgeoning entrepreneurs to create businesses which met the needs of a changing world. From new products and services, to adapting to an increasingly digital status quo, we’ve witnessed female-led businesses show even more resilience in the face of the global economic downturn. It is not news that businesses that incorporate diversity throughout their business, from senior leadership right through to entry level roles, outperform those that don’t.
And this is why at Mastercard, we’re committed to supporting 25 million women entrepreneurs by 2025 as part of our broader financial inclusion goal. We help women entrepreneurs get paid, get capital and get digital, because they drive global growth and innovation. As part of our ongoing investment into and support of women innovators and their funders, we are the lead investor in Astia’s early-stage venture fund, a BTB Partner Fund, as well as of BTB itself, aimed at addressing the extraordinary disparity in funding for companies that include women in founding or executive roles. We want to lead the charge in reshaping the way our world is designed, coded and constructed by bringing diverse perspectives to the table to help unlock capital and powerful ideas that open up our industry and the world’s possibilities to women.
Ollen Douglass, Managing Director, Motley Fool Ventures:
Our fund continues to benefit from the talent and success of our women-led companies. We’re proud that in total, we have placed approximately 35% of our invested capital into their businesses and continue to reap the returns. In 2021 alone, public companies acquired two of our women-led startups:
- Citus Health, led by CEO Melissa Kozak, was acquired by Brightree, a cloud-connected medical device subsidiary of ResMed.
- Affectiva, led by CEO Rana el Kaliouby, Ph.D., was acquired by Smart Eye, a global leader in eye-tracking solutions.
These acquisitions underscore the value being created by our founders and their ability to grow world-class technology companies.
We believe there are still a large number of highly qualified, VC-backable, female-run companies seeking funding and we look forward to working with them and creating partnerships to generate outstanding returns for our Limited Partners, and help make our portfolio reflect our best vision for our future.
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