When Mellody Hobson first met Sallie Krawcheck at a dinner during one of Fortune‘s Most Powerful Women conferences more than a decade ago, Hobson was the newly-minted president of Ariel Investments, and Krawcheck was a big-shot financial analyst, who’d just appeared on the cover of the magazine.
Both women remember the evening remarkably well. They bonded over fashion, among other topics (“I wore a white blazer that night—I still have it, I can’t bear to throw it out,” says Krawcheck) and a connection was forged.
“She was like a superstar. It was impossible not to be aware of her and notice her,” recalls Hobson.
Fast-forward to 2016, when Hobson has become a boldface name in her own right, and Krawcheck has moved on from her stints at Citigroup (C) and Bank of America (BAC) to launch her own business. That startup, Ellevest, a digital investment platform focusing exclusively on women, on Thursday announced a second, $9 million funding round. (The company raised a $10 million Series A last September.)
Ellevest is a robo-advisor that works much like more-established players such as Betterment and Wealthfront, but with a few feminine twists. It’s goal-based, rather than centered on the performance of a particular product or portfolio, and the algorithms factor in women’s superior longevity—about five years longer than that of men—and the fact that they tend to earn less than men over the course of their careers. Krawcheck declined to share details on how many women now use the platform, which launched to the public in May.
Hobson isn’t the only high-profile female investor participating in the round. She is joined by tennis pro Venus Williams, who is credited with helping lead the fight for equal pay among male and female tennis players. Williams says her focus on women’s financial equality sparked a kinship with Krawcheck. “I feel like we’ve had so many parallels in our lives,” says the athlete. “This is really me believing in her.”
Other prominent investors include Aspect Ventures (lead by partner Theresia Gouw), Ulu Ventures (led by co-founder Miriam Rivera), Menlo Ventures general partner Sonja Perkins, and former Redwood Bioscience CEO Karen Boezi, among others.
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The investment in Ellevest can also be seen as a vote of confidence in the thesis that prompted Krawcheck to start the company: Women now control enough wealth—$5.1 trillion according to Ellevest—to need dedicated investment management services.
“Women are beginning to put their money where their mouths are,” says Krawcheck. “All of a sudden you have women stepping into their financial power.”
She also believes that there’s a shift in how women are looking at helping each other succeed. “Before, you knew there were only one or two seats open for a woman—so you had to fight for those one or two seats,” says the former Wall Street titan. “Now it’s like, if a woman gets funded, everyone recognizes that’s a good thing.”
It’s a good thing for many reasons, but chief among them may be pattern recognition—a method many venture capitalists use to make investments. “The more female founders there are, and that are successful, the more people will invest,” says Krawcheck.
At the moment, only 7% of VC dollars go to women.
“We’ve created our own network, our own club just as men have been doing for years,” says Aspect Ventures’ Gouw, who has invested in other high-profile women-run startups such The Muse, Birchbox, and The RealReal. “As women are amassing more wealth, they like to pay it forward, invest in [other women’s] startups.”
That’s not to say that female investors will invest in companies just because they’re woman-run. As Gouw notes, “Sallie has had an amazing career in finance and investments,” and “knows everyone—men and women.” Non-female-run investors in Ellevest include Khosla Ventures and Morningstar, Inc., which led the company’s Series A.
Hobson also sees her financial stake as an investment in Krawcheck, and a sizable one at that: It’s the largest amount she’s invested outside of Ariel.
“This is obviously a big area that someone needs to crack the code on,” says Hobson. “I believe she can do it.”
