In 2017, a mere 2.2 percent of all venture capital (VC) funding in the U.S. went to companies founded solely by women, according to PitchBook. That’s up from 2016, when female founders raised just $1.4 billion—or 1.9 percent of total VC funding.
But get this: Plenty of data shows that startups led by women outperform their male-founded counterparts. They grow faster and produce more revenue, Bumble reported.
It will come as no surprise that VC investments in businesses founded by women of color fared far worse. For instance, black women—the most educated and most entrepreneurial demographic in the U.S.—received 0.2 percent of all VC funding last year. Rates are unreported for Native female-led startups.
“The gender gap in venture capital is staggering, particularly for women founders of color. With an 85 percent female workforce, we want to be a part of the solution,” tech company Bumble, creators of the popular dating app, announced Wednesday.
The newly formed Bumble Fund will focus on early-stage investments for female-founded, female-led businesses, with a focus on racial diversity. The company is investing between $5,000 to $250,000 in each company, honing in on those dedicated to serving women. So far, the fund has committed more than $1 million, Forbes reported.
“We’re launching Bumble Fund to invest in women ignored by the establishment. We’re promising businesses and founders support,” Bumble stated.
Sarah Jones Simmer, Bumble’s COO who will be leading the VC fund, told Forbes: “We want to give more than capital. We are in a privileged position of having built a legacy of experience over the last four years. And so much of what we are tackling is what other founders are facing on a day-to-day basis.”
Bumble—founded by Whitney Wolfe Herd in September 2014 with equality in mind—has invested in two female-focused investment funds: Female Founders Fund and Cleo Capital. Bumble, which was valued by Forbes in July at about $1 billion, has also committed money to BeautyCon, Mahmee and Sofia Los Angeles.
Within Indian Country, Gabrielle Scrimshaw, a member of the Hatchet Lake First Nation and recent Harvard Kennedy graduate, aims to start an investment firm for tribal businesses, First Nations businesses and indigenous entrepreneurs. Learn more about her vision here.