Gender Equity Investing

Innovations in Venture Capital Gender Lens Investing

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Amid the economic disruptions of the pandemic and subsequent downturn, the uneven impact of COVID-19 on women has been clear. This includes increased burdens in the unpaid care economy, disproportionate job losses, and the prevalence of women in low-paying essential roles. A women-focused recovery requires creative solutions—as well as gender lens venture investors to support them.

Springbank Collective: Gender Lens Investing Innovators

Led by three women partners, Springbank Collective invests in early-stage companies with a focus on the care economy and the future of inclusive work. Investee companies must fit into one of three gender lens investing categories within that framework: career, care, or consumer.

Springbank’s special purpose vehicle (SPV) structure brings together different types of investors to make a single investment into a company during seed and seed extension financing rounds; in the future, Springbank plans to raise a committed capital fund to sit alongside the SPV. The firm seeks scalable business models in North America and Europe with proven product-market fit, paying customers, and revenue traction.

With a belief that its target categories represent a half-trillion-dollar market opportunity, Springbank views gender inequality as a structural problem that requires a systems solution.

“We prioritize diversity on founding teams, but we do invest in all kinds of teams, not only women-founded companies,” says partner Elana Berkowitz of the firm’s innovative approach. “That said, more than 80% of our founders are women. More than 40% are people of color. That is very important to us. We are still seeing very low percentages of venture capital funding going to women and BIPOC founders and we hope to help change that.”

The share of venture-funded US startups with at least one female founder jumped from 12.6% in 2010 to 23.8% in 2019, according to Pitchbook. Female CEOs of startups nearly doubled from 6.8% in 2010 to 13.5%. However, women-led startups still only received 2.7% of total venture capital dollars in 2019.

Rather than relying on gender requirements for founding teams, however, Springbank promotes gender equity by investing in women-focused solutions. “We want to see more women on corporate boards, an initial core focus of gender lens investing,” Berkowitz says. “But it is not enough. How do we get meaningful changes for women and families? How do we build the currently missing infrastructure to support working women?” Springbank aims to close the structural gaps facing working women so they can thrive in the workforce long term.

Gender inequality is a structural problem that requires a systems solution.

Investing in Solutions to Support Unpaid Caregivers

The care category of Springbank’s investment portfolio includes platforms and services for high-quality and accessible care options, technology solutions for senior care, women-focused health solutions, and wellness for caregivers. The pandemic laid bare wide structural gaps for caregivers in the US economy; Berkowitz and her team see women as the canaries in the coal mine for the future of work.

“If there is a silver lining, it is that the pandemic made visible the depth of unpaid caregiving burdens,” she says. “Women are trying to hold onto their jobs and benefits. It is very clear to us that the millions of unpaid caregivers in this economy need help.”

Springbank’s interest in looking beyond a focus on female founders can reveal opportunities that others might miss. In the care category, this has led to an investment in women-focused physical therapy provider Origin as well as case management and benefits solution Wellthy.

According to Crunchbase, venture and seed funding in elder and home healthcare peaked at $490 million in 2018. The first three-quarters of 2020 saw at least $368 million in investment, not including 85 early-stage companies. Crunchbase research points out that more of this funding must go toward home health services rather than toward nursing homes and related providers, where only a small percentage of older adults live.

Looking ahead, the Springbank team believes there will be greater innovation in how employers can supplement caregiving solutions, including services for aging-in-place and increased access to medical specialties. Communications solutions for intergenerational households are growing to help replicate the stark loss of caregiving villages during the pandemic. The team also sees significant growth opportunities in telehealth solutions.

Investing to Help Women Thrive at Work

Springbank’s portfolio in the career category includes professional support networks, providers of services that boost gender equity through flexible work arrangement solutions, anti-bias software, and solutions for shift and hourly workers. Chief is a private network of corporate women at the senior vice president or C-suite level that targets keeping women in leadership positions. Catch provides a benefits and tax management app for a fast-growing sole proprietor and gig workforce. Berkowitz points out the company’s female founding team and notes high growth in the number of women-owned sole proprietors, “single-shingle,” and small LLC companies.

The e-commerce direct-to-consumer (DTC) segment dominates consumer-related venture funding, with peak growth in DTC brands from 2010 to 2015. Internet retail accounts for the most venture investment, with $2.5 billion in 2019, followed by specialty retail at $682 million. During the pandemic, DTC has seen outsize growth as consumers turned to online shopping and at-home deliveries.

Consumer products and services in the Springbank portfolio center on supporting working parents, providing women-tailored financial solutions, and finding products that serve the unique needs of professional women. Combining the consumer and care categories, Milkstork is a company that provides breast milk shipping services for women traveling away from home. The company has also provided in-kind samples to researchers testing breast milk for COVID-19 antibodies. It and others like it exemplify the power of a women-focused recovery led by women.

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