Rethink Impact Closes $182M Fund II, Making it the Largest, U.S. Venture Capital Firm Investing in Female-Led Tech Companies Tackling Global Challenges
Rethink Impact, the largest impact venture firm in the U.S. dedicated to investing in female tech entrepreneurs, announced today 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.
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 (News - Alert) Foundation, the W.K. Kellogg Foundation, university endowments, and significant financial institutions such as UBS.
"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).
"There is much to be done, and the investment community - and society as a whole - are missing out by not incorporating broader points of view into which ideas get funded, which problems get solved, and which communities benefit (or don't)," said Heidi Patel, Managing Partner at Rethink Impact. "Rethink Impact has placed a real stake in the ground by investing institutional-scale capital into primarily Series A- and B-stage companies led by women. Beyond the diversity of our leadership teams, our portfolio companies are also addressing major market gaps by bringing innovative solutions and improving affordability in the healthcare, education, sustainability and financial services sectors."
Rethink Impact has backed companies such as Rachel Carlson's Guild Education, the first female-led impact unicorn that achieved a $1BN valuation by helping upskill frontline workers (Forbes), Sallie Krawcheck's Ellevest, an investment platform for women that has uilt the largest social media following of any financial services company in the country (Inc.) and Helen Adeosun's CareAcademy, which just closed an oversubscribed Series A round to help onboard and train 1 million home healthcare workers over the next few years, improving quality and efficiency in the $103BN U.S. homecare industry (Business Insider).
Quotes about Rethink Impact's $182M Fund II:
"When we look at the data, we know companies that embrace diversity are more creative and more profitable. Yet, the tech industry does not at all reflect the diverse communities we live in. This has to change," Melinda Gates, Founder of Pivotal Ventures, said. "If we want to expand women's power and influence in tech, one of the best actions we can take is invest in female entrepreneurs, which is why organizations like Rethink Impact are so critical. Ultimately, creating a more inclusive tech industry will not only lead to more innovation, but a society that benefits everyone."
"We are thrilled to partner with Rethink Impact in supporting women-led impact entrepreneurs," said Roy Swan, Director of Mission Investments at the Ford Foundation. "For too long, female entrepreneurs have been overlooked by traditional venture capital firms, starving the world of the innovation that comes from their diversity of thought. Equitable access to capital is an essential building block to an inclusive economy and a just society. Rethink Impact's focus on high-impact female entrepreneurs brings us one step closer to that goal."
"We are delighted to build on our existing investment in Jenny, Heidi, and their team," said Andrew Lee, Head of Sustainable and Impact Investing at UBS Global Wealth Management. "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."
"While it is shocking how little has changed in terms of capital allocation since my own mother started one of the first funds investing in women more than 20 years ago (Washington Post)," said Abramson, "given the significant financial data supporting the value of inclusive investing and the opportunity that this moment in our history provides, our team couldn't be more grateful to accelerate this work."
"We are humbled by the incredible work of our portfolio executives and the innovations they are scaling in the market," said Patel. "If recent months have demonstrated anything, it is that backing diverse leaders and their approaches to tackling our biggest social and environmental challenges is more critical now than ever."
About Rethink Impact:
Jenny Abramson, Founder and Managing Partner (@abramsonjenny), is a tech CEO turned venture capitalist. She is a proven executive and entrepreneur having held a range of leadership roles across the tech and impact space-in education, personal data, and media. She has been covered in Forbes, in The New York Times, and in The Washington Post, featured at SXSW (News - Alert), at the United Nations, at a G7 event, and on Capitol Hill, and was named one of Entrepreneur's 100 Powerful Women and a DC Tech Titan. She received a BA and an MA from Stanford University, an MBA and the Dean's Award from Harvard Business School and was a Fulbright Scholar at The London School of Economics.
Heidi Patel, Managing Partner (@HeidiPatelSF), is a seasoned venture investor and former President of New Island Capital, an institutional-scale, impact investment advisor to a single ultra-high net worth individual, Director at Pacific Community Ventures, an impact-focused private equity firm, founding member of AOL Time Warner (News - Alert) Ventures, with additional experience in investment banking. She also worked with D.light Design as an Acumen Fund Fellow based in India. She has been covered in Forbes, NPR's (News - Alert) Market Place, Project Entrepreneur, and TechCrunch and was named a Wall Street Journal "Woman to Watch" in venture capital in 2018. Heidi earned an AB from Princeton and an MBA from the Graduate School of Business at Stanford University, where she co-teaches (and co-created) the course on impact investing.
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