Rethink Impact Closes $182 Million Fund II To Invest In Female-Led Tech Companies

By Amit Chowdhry • Jul 13, 2020
  • Rethink Impact — the largest impact venture firm in the U.S. dedicated to investing in female tech entrepreneurs — announced recently that it closed the new $182 million Fund II

Rethink Impact — the largest impact venture firm in the U.S. dedicated to investing in female tech entrepreneurs — announced recently that it closed the new $182 million Fund II. This brings the total assets under management to nearly $300 million.

Ever since the company launched in 2016, Rethink Impact backed over 25 companies that are focused on gender diverse teams helping to solve the world’s greatest challenges. And 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 known as the most diverse in the venture industry. The Fund’s investor base is 65% female and hails from nearly 40 states. Plus it includes Pivotal Ventures (the investment company founded by Melinda Gates), the Ford Foundation, the W.K. Kellogg Foundation, university endowments, and significant financial institutions like UBS.

Even though there has been a significant increase in gender lens and impact investing, the venture capital industry still does not come close to mirroring the world. A minuscule portion of venture dollars have been going to female founders and less than 0.1% goes to black female-led startups. However, research has shown that female and diverse founders are known to drive more revenue per dollar invested. And companies led by females tend to achieve faster exits.

Rethink Impact has backed companies like Rachel Carlson’s Guild Education, Sallie Krawcheck’s Ellevest, and Helen Adeosun’s CareAcademy.

Key Quotes:

“An unfortunate side effect of the COVID-19 pandemic has been the decline of diversity efforts in the venture industry. 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.”

“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). 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.”

— Jenny Abramson, Founder & Managing Partner at Rethink Impact

“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). 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.”

“We are humbled by the incredible work of our portfolio executives and the innovations they are scaling in the market. 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.”

— Heidi Krauel Patel, Managing Partner at Rethink Impact

“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. 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.”

— Melinda Gates, Founder of Pivotal Ventures

“We are thrilled to partner with Rethink Impact in supporting women-led impact entrepreneurs. 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.”

— Roy Swan, Director of Mission Investments at the Ford Foundation

“We are delighted to build on our existing investment in Jenny, Heidi, and their team. 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.”

— Andrew Lee, Head of Sustainable and Impact Investing at UBS Global Wealth Management