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Venture capital firms set aside $1 billion for women-led startups. Here’s how it’s going

December 9, 2021, 4:22 PM UTC

It all started with a proposition.

At the World Bank meeting in Bali in Oct. 2018, two women proposed to venture capitalists, private equity firms, and other institutional investors that they focus their attention on one thing: Investing in women.

It sounds like a simple ask, but, given the numbers at the time, it clearly wasn’t. Only around 2.2% of venture funding was going to startups led by a woman founder—and only 12% to mixed gender teams. As you could expect, those numbers get increasingly slim for startups run by women of color. 

The two women presenting—Shelly Porges and Sarah Chen, who were launching an initiative to bridge the gender funding gap—wanted a firm commitment: They asked for funds and investors to send $1 billion towards startups led by women. Within nine months, 86 funds took the challenge.

We’re starting to see the outcomes of such initiatives, which are happening around the globe: Accelerator programs, funds, programs, and quotas all targeted at addressing the disparities in funding. In many cases, the efforts are only a few years old, and as we all know, change takes time.

But Porges and Chen say the initial data has been encouraging. In the case of their initiative, Beyond the Billion, now a full-strung consortium of funds, $638 million in funding had been deployed by the end of last year. Some 479 of those portfolio companies subsequently raised an additional $4 billion in funding during that same two-year period, according to PitchBook data.

“Women have been underfunded for so long,” Chen tells me. “When they get the funding, the exponential growth that they can achieve and what they can produce, the outperformance that we see—it’s really testament from the results that we’ve reported.”

There are a series of ways to tackle the gender disparities in funding, and the problem doesn’t sit solely on the shoulders of venture capitalists. In some cases, VCs are struggling to get funding from limited partners for their women-focused funds, as many of them are new, Chen says.

Then there’s the deep-rooted issue of the ivy league networks where women have historically been shut out. “There are a lot of secret handshakes,” says Lauren Washington, co-founder of Fundr, a platform for angel investors aimed at eliminating biases. “You get to play this game, but the rules of the game, we’ll really not tell you.”

Some funds are re-thinking the way they structure their teams and the way they conduct day-to-day business. For one, Chen says, re-thinking the pitching process, or in some cases, removing it altogether.

We still have a ways to go. Out of the 957 unicorns, only some 100 of them are female-founded, according to Crunchbase data. Of course, the other way to look at that is that’s a lot of female-founded companies and given the chunk of change being set aside for women right now, there’s more startups headed that direction.

Headed to the exchange: Nu Holdings, the holding company for neobank NuBank, raised $2.6 billion yesterday from investors for its public debut today in the U.S. and Brazil. That’s no small sum, but it’s a far cry from their plans to raise up to $3.6 billion in early November, per their IPO filing at the time. Some of their shareholders had planned to sell around 43.4 million shares, but it looks like they changed their minds somewhere along the way last month—probably around the time the company realized it wouldn’t be able to give shares the price tag it had hoped for.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com

Correction: An earlier version of this newsletter misstated the number of female-founded unicorns.

VENTURE DEALS

- Claroty, a New York-based industrial cybersecurity platform for highly automated production sites, raised $400 million in Series E funding co-led by SoftBank and was joined by investors including Bessemer Venture Partners, Schneider Electric, ISTARI, Team8, and Standard Investments. The company also agreed to acquire Medigate, a New York-based healthcare IoT security company, without disclosing terms.

- Mambu, an Amsterdam-based SaaS cloud banking platform, raised €236 million ($265.7 million) in Series E funding led by EQT Growth.

- Robotic Research, a Clarksburg, Md.-based autonomous mobility and robotics software company used by the U.S. Army, raised $228 million in Series A funding from SoftBank, Enlightenment Capital, Crescent Cove Advisors, Henry Crown and Company, and Luminar Technologies.

- Braintrust, a decentralized Web3 talent network, raised $100 million in a private token sale led by Coatue and was joined by investors including Tiger Global, True Ventures, Blockchange Ventures, HashKey, and others. 

- Afero, a Los Altos, Calif.-based IoT and Paas solutions company, raised $50 million in Series C funding led by Crosspoint Capital Partners and was joined by The Home Depot.

- Intellihot, a Galesburg, Ill.-based tankless water heating system manufacturer, raised $50 million in funding led by Aegon Asset Management and the Avenue Sustainable Solutions Fund.

- GitGuardian, a Paris-based digital authentication credentials platform, raised $44 million in Series B funding led by Eurazeo and was joined by investors including Sapphire, Balderton, BPI, and Fly Ventures

- Paradigm, a New York-based institutional liquidity network for derivative traders, raised $35 million in Series A funding co-led by Jump Capital and Alameda Ventures

- Blickfeld, a Munich-based light detection and ranging (LiDAR) sensing technology developer, raised $31 million in additional Series A funding led by New Future Capital and was joined by investors including Bayern Kapital, Continental, Fluxunit, and others. 

- Palm NFT Studio, a creative services company for NFT artists and rights holders looking to establish NFT marketplaces, raised $27 million in Series B funding led by M12, and was joined by investors including Griffin Gaming Partners, RRE, Third Kind Venture Capital, Sfermion, LAO, Warner Bros, and SKTelco

- Union, an Austin, Tex.-based hospitality engagement platform for restaurants, raised $22 million in Series B funding led by Clerisy and was joined by Roth Capital and Aquila Capital Partners, NEA, Wellington, Fiserv, and former WorldPay CEO Tony Catalfano.

- Limbix, a San Francisco-based mental health disorder prescription therapeutics company, raised $15 million in a second Series A round led by GSR Ventures, and was joined by investors including DG Daiwa Ventures, Storm Ventures, Bixink, and DN Capital

- Fable, a Palo Alto, Calif.-based motion design platform for creators, raised $15 million in  Series A funding led by Redpoint Ventures and was joined by investors including Collaborative Fund, SIP Global Partners, Harrison Metal, Third Kind Venture Capital, and LightShed Ventures. Annie Kadavy of Redpoint will join the Board. Less than one year after raising its seed round, this round brings Fable's total funding to $22.4M. The company will use this new capital to expand its team and grow its product offering.

- Perchwell, a New York-based real estate listings provider, raised $15 million in Series A funding led by Founders Fund and was joined by investors including Lux Capital, Matterport, and California Regional MLS

- First Resonance, a Los Angeles-based manufacturing software platform for factory operations, raised $14 million in Series A funding led by Craft Ventures and was joined by investors including Blue Bear Capital, Fika Ventures, and Stage VP

- Bloom Science, a San Diego-based microbe-based neurological disorder therapeutics developer, raised $12 million in Series A funding led by Leaps by Bayer and the ALS Investment Fund and was joined by investors including Apollo Health Ventures and Joyance Partners.

- Proov, a Boulder, Colo.-based urine progesterone test strip and women’s reproductive health company, raised $9.7 million in Series A funding led by Hambrecht Ducera Growth Ventures and was joined by firms including SteelSky Ventures, WCC Partners, Lightship Capital, GingerBread Capital, and Portfolia.

- Zeta Markets, a DeFi futures and options exchange built on Solana, raised $8.5M in a private token sale led by Jump Capital and was joined by investors including Race Capital, Electric Capital, DACM, Airtree Ventures, Amber Group, Wintermute, Sino Global Capital, Genesis Block Ventures, QCP Capital, Alameda Research, Solana Capital, MGNR, 3kVC, Orthogonal Trading, LedgerPrime, and SkyVision Capital

- NextVivo, a Palo Alto-based immune organoid technology development platform, raised $7.9 million in funding led by Khosla Ventures, and was joined by investors including Alexandria Venture Investments and Wilson Sonsini

- HelloHero, a New York-based online therapy and mental health company, raised $7.7 million in seed funding by Silverton Partners and was joined by investors including Correlation Ventures, Achieve Partners, and Service Provider Capital New England Fund.

- Datasembly, a Tysons, Va.-based data analytics platform for real-life decisions, the leading provider of real-time product pricing, raised $7 million in funding led by Valor Siren Ventures and was joined by investors including Craft Ventures, Twenty 5 Twenty, Evan Brown, and Launch Capital

- Pontoro, a Mountain View, Calif.-based digital asset securitization and liquidity platform, raised $6 million in seed funding led by Ulu Ventures, and was joined by investors including Franklin Templeton, Neva Sgr., Illuminate Financial, Adit Ventures, Fin Venture Capital, Viking Maccabee Ventures, Bloccelerate Ventures, Nevcaut Ventures, and Quest Venture Partners

- Fayre, a global NFT club for creators, brands and fans, raised $3.4 million in funding led by Outlier Ventures and was joined by investors including Protocol Labs, X21 Digital, Titans Ventures, China Polka, BMW Capital, Insignius Capital, Oddgems, Dutch Crypto Investors, and Macro Chain.

PRIVATE EQUITY

- Francisco Partners and individual investors invested $100 million in NZXT, a Calif.-based PC gaming hardware and services company.

- American Pacific Group acquired Interwest Distribution Company, Littleton, Colo.-based automotive and building films distributor. Financial terms were not disclosed.

- Jumio, backed by Great Hill Partners, agreed to acquire 4Stop, a German KYB, KYC, compliance and fraud prevention company. Financial terms were not disclosed.

- REEF Technology, backed by Mubadala Investment Company and SoftBank, agreed to acquire 2ndKitchen, a virtual food-serving company for hotels, offices, buildings, or bars without kitchens. Financial terms were not disclosed.

- Spectrum Equity agreed to acquire a majority stake of PresenceLearning, a New York-based teletherapy and software for special education and mental health providers in K-12 schools. PresenceLearning acquired Global Teletherapy, a Pikesville, Md.-based local therapy referral service for students. Financial terms for both deals were not disclosed.

- Sverica Capital Management invested in ShadowDragon, a Cheyenne, Wyo.-based threat intelligence software provider focused on OSINT data. Financial terms were not disclosed.

EXITS

- Monument Microcap Partners acquired San Benito Shutter, a Hollister, Calif.-based premium shutter component distributor, and Lewis Cabinet Specialties, a Tremonton, Utah-based custom cabinet component manufacturer, from LongWater Opportunities. Financial terms were not disclosed.

OTHER

- McCain Foods invested $55 million in Strong Roots, a Dublin-based vegan snacks company.

- L’Oréal agreed to acquire Youth to the People, a Los Angeles-based plant extract and active ingredient skincare brand inspired by superfood extracts. Financial terms were not disclosed.

- City of Hope agreed to acquire Cancer Treatment Centers of America, a Boca Raton, Fla.-based oncology hospital and outpatient care center network, for $390 million.

- fuboTV acquired Molotov SAS, a Paris-based TV streaming company and operator. Financial terms were not disclosed.

- Zencity, backed by Salesforce Ventures, M12, and other investors, acquired Civil Space, a Vancouver-based community engagement platform. Financial terms were not disclosed.

IPOS

- Nu Holdings, a holding company for Brazilian neobank Nubank, raised $2.6 billion in a dual offering in the U.S. and Brazil of 289.2 million shares priced at $9 per share. The company reported $737 million in total revenue in 2020 and a loss of $172 million. Sequoia Capital, DST Global, Tencent Holdings, and Tiger Global back the firm. 

- Jahez, a Saudi food delivery company, is seeking a valuation as high as $2.4 billion from an IPO in the Middle East, per Bloomberg.

- HashiCorp, a San Francisco-based cloud workflow platform, raised $1.2 billion in an offering of 15.3 million shares priced at $80 per share. The company posted total revenue of $222 million in the year ending in Jan. 2021 and reported a net loss of $84 million. Mayfield, GGV Capital, Redpoint Ventures, and True Ventures back the firm.

SPAC

- Grove Collaborative, a San Francisco-based sustainable household products company, plans to go public via a merger with Virgin Group Acquisition Corp. II, a SPAC backed by Sir Richard Branson. A deal values the firm at $1.5 billion.

F+Fs

- Corazon Capital, a Chicago-based venture capital firm, raised $134 million for its new fund.

- Whitecap Venture Partners, a Toronto-based venture capital firm, raised $110.4 million for its new fund.

- Flint Capital, a Cambridge, Mass.-based venture capital firm, raised $103 million for its second venture fund that will invest in European and Israeli high-tech companies entering the U.S. market. 

PEOPLE

Mission BioCapital, a Cambridge, Mass.-based venture capital firm promoted Cassidy Blundell to principal.

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