Rethink Impact, the largest impact venture firm in the U.S. dedicated to investing in female tech entrepreneurs, announced the closing of a new $182M Fund II, bringing its total AUM to nearly $300M. Since launching in 2016, Rethink Impact has backed over 25 companies focusing on gender diverse teams helping to solve the world’s greatest challenges. With this new Fund, the firm will provide additional access to funding with a continued focus on the leaders who need it most.
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“For any company, diversity in leadership and employees is critical to diversity of thinking and ultimately business success and sustainability. We and our clients are pleased to support diversity-focused investments that address pressing societal challenges.”
Rethink Impact’s backers are among the most diverse in the venture industry. The Fund’s investor base is 65% female, hails from nearly 40 states, and includes Pivotal Ventures, the investment company founded by Melinda Gates, the Ford Foundation, the W.K. Kellogg Foundation, university endowments, and significant financial institutions such as UBS.
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“An unfortunate side effect of the COVID-19 pandemic has been the decline of diversity efforts in the venture industry,” said Jenny Abramson, Founder & Managing Partner at Rethink Impact. “Q1 2020 saw a 40% year-over-year decrease in the percentage of female-led, VC-funded deals (PitchBook). While admittedly, it’s hard to break into networks that make up the venture landscape during this quarantine environment, the result is that female founders are being left out at a time when their ideas are needed most. We believe there is tremendous opportunity to use private sector tools to drive positive, inclusive change and now is the time to address these market blind spots and double down, not lean out.”
Despite a significant increase in gender lens and impact investing, the venture capital industry still does not come close to mirroring the world around it, with just 2.7% of venture dollars going to female founders in 2019 (PitchBook) and only .06% of venture dollars going to black female-led startups (Project Diane). This is despite the research that shows that female and diverse founders drive more revenue per dollar invested (BCG, IFC, and McKinsey) and female founders achieve faster exits than their peers (PitchBook).
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