Gender Equity Investing

Project Sage 2.0 Tracks the Continued Growth of Gender-Lens Investing


A year since creating a baseline snapshot of the gender-lens investing landscape, Project Sage has followed up with its second report and concluded that the space remains on the rise. According to Project Sage 2.0: Tracking Venture Capital with a Gender Lens, gender-lens funds increased in number from 58 to 86 since last year’s report, and they’ve raised more than $2.2 billion.

Overall, the report describes an investing sector that’s growing quickly but still young, with the majority of funds included having raised less than $10 million. And though more investors employ a gender lens, the way they define and approach the field varies greatly.

Project Sage 2.0 shows that the volume—and rate—of capital being deployed with gender lens investing strategies is increasing,” coauthor and Wharton Social Impact Initiative senior director Sandi M. Hunt writes in the report. “It also suggests that the specific impact on women being targeted by firms’ gender lens investing remains very broad.”

Facing Definitional Challenges

As more investors begin incorporating gender-related factors into their analyses, many have taken an expansive view as to what types of investments qualify and even as to what investing in women means. The Project Sage researchers gave funds five options from which to select a definition of “gender-lens investing,” and half of the funds included in the report chose all five of the following:

The report’s authors note that though the lack of consensus made it more difficult for them to compile an all-encompassing list this year, the widening definition ultimately marks a positive shift. “More investors . . . seem to be thinking about gender lens as part of their analysis,” they write, adding that they may need to change the design of Project Sage going forward in order to capture all the funds using gender a lens.

The increase in investors has also meant an increase in the space’s diversity—both in terms of the geographic regions and sectors that receive gender-lens investment.

Marking Growing Diversity

The increase in investors has also meant an increase in the space’s diversity—in terms of both the geographic regions and the sectors that receive gender-lens investments. With 40% of investments, North America remains the region with the greatest targeted investment. However, its dominance has declined significantly since the 2017 report, where 80% of investments targeted the United States. Technology still remains the leading industry for gender-lens investing, but overall the distribution among sectors is more evenly spread than it was last year. The second and third top sectors are again healthcare and clean tech.

Women continue to hold leadership roles in the funds making gender-lens investments. More than half of the limited partners in firms represented in the report were female, along with 72% of venture partners and 69% of investment committee members. Funds are looking at other forms of diversity as well. One in 5 reported factoring racial and ethnic diversity criteria into investment decisions, while 8% said that they include LGBTQI criteria.

“The diversity of strategies, actors, and geographies in Project Sage 2.0 is so exciting to see,” says report coauthor Suzanne Biegel, Wharton Social Impact Initiative senior gender-lens investing adviser and founder of Catalyst at Large. “The market is clearly evolving and the ability for investors with different priorities to deploy capital into these vehicles is getting sharper and sharper.”

Keeping a Low Profile

Some of the funds included on the list have opted to avoid public comments about their gender-lens investing strategies, leaving mentions of such approaches out of their main fund descriptions. Three-quarters of funds in this category said that they don’t see a need to explicitly state their strategy since it’s obvious in their work. A minority of respondents also stated that they sidestep strategy discussions to limit liability to “gender discrimination” lawsuits. More than 60% are wary of turning off investors who don’t have a defining interest in gender-lens investing.

That said, Project Sage 2.0 suggests that plenty of investors are interested, and that there may be more to come if current trends continue.

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