Five VC Funding Firms Focusing on Women-Led Startups

By: WE STAFF | Friday, 23 October 2020

Women in current India are not just competing or working shoulder to shoulder with their male counterparts, but are even excelling in their domain with their ideas and executions techniques. Accept is not, but it’s a fact that when a woman decides to achieve a certain goal, there is nothing that can stop her. One may have heard this quote before ‘Women can do anything that men can do, but women can do it with heels ’; and in the current era they are justifying the aforementioned quote with their dedication and raw talent. Though, the status of female employment and leadership in India has been the subject of much debate of late in the national fora, due to its intrinsic relationship with female empowerment and gender imparity. However, time has now changed. The world is witnessing drastic changes and indeed this change in perception is because of the fact that many Indian women today are pioneering across a gamut of industries by leveraging the best of their prowess in various segments. The country is now witnessing that women in India are rich of talent, but what they really need is a platform for the talent to showcase along with just a little push and opportunity to flourish and excel in the society. Here is where the role or Venture Capitalist (VC) comes into the light.

As per the Sixth Economic Census, conducted in 2014 by the Indian government, only 14 percent of Indian women own or run businesses in India. Another report by Trifecta Capital titled ‘Human Capital In The New Economy – Benchmarks And Best Practices 2019’ noted that women make up for only 22 percent of the total workforce in Indian startups, accounting for just one-fifth of the workforce. The report also added that gender diversity tends to slightly improve from Series A stage to Series B. There are reports that also inclines towards women entrepreneurship, such as according to research (worldwide) performed by First Round Capital, founding teams that include men and women produce dramatically stronger valuation growth than all-male founding teams. Also, a study published in Venture Capital Journal reveals that startups founded by all-male teams are four times more likely to receive funding from venture capital funds as compared with female founders. The numbers don’t lie, but as the scenarios are changing, a new hope has taken birth in the business eco-system. Now new-age VCs are surging ahead with a commitment of building a system that is more supportive of businesses run by women.

Though the startups led by women aren't in the majority and the entrepreneur space is largely dominated by men in India. Talk of equality is mostly lip service, however, there are still few VCs that are willing to take a chance by keeping faith on the women leaders. These five VCs should be on every women founder's radar.

Kalaari Capital: The firm is an early-stage, technology-focused venture capital firm with $650 Mn in assets. Not content with being one of the first homegrown VC firms in India with a steadily growing list of startups in its portfolio, Kalaari launched Kstart, a seed fund initiative, in 2016. Kstart focuses solely on seed-stage funding and differs from other funds in that it doesn’t set a valuation at the time a startup is raising funds from it. It does so in the subsequent rounds of funding, and the valuation is set by external investors. Founded by a true leader Vani Kola, Kalaari Capital is a leading VC that strives hard to help founders succeed and flourish in the business world. Vani is referred to as The Mother of Venture Capitalism in India, and there is a reason behind it. As Managing Director at Kalaari Capital, over the years, she has built a reputation for picking the best young minds and mentoring them to build successful enterprises, some prime examples being Myntra, Urban Ladder, Zivame, Power2SME, YourStory, and Bluestone, among others.

LetsVenture: Founded in 2013, LetsVenture enables startups and investors to discover and connect with each other. There are 12000+ startups and 2200+ investors on the platform. LetsVenture works with startups and investors on discovery, syndication and closure. This involves managing due diligence and paperwork closure. LetsVenture has enabled more than 100 startups to raise over $40mn. Founded by Shanti Mohan LetsVenture is an online platform that connects Indian startups with angel investors. The Bengaluru-based platform, which counts Testbook, DailyNinja, Wishberry, MyUpchar, and Ketto as part of its portfolio, has 3,700 members. Since its inception in 2013, LetsVenture has facilitated over $100 million in investments. LetsVenture's 195 startup-strong portfolios are now valued at $1.07 billion (as of November 2019), has raised over $150 million in funding.

Qualcomm Ventures India: Qualcomm Ventures founded in the year 2000 is the $1 billion venture capital arm of global tech giant Qualcomm, and the arm is highly optimistic on India’s technology-driven startup ecosystem. The firm aims to help connect entrepreneurs to the resources, relationships and deep industry expertise they need to succeed in the entrepreneur journey. The firm believes in diversity and encourages different points of view, which is valuable for any company. In an endeavour of becoming the part of a change, Qualcomm Ventures also established a summit last year. The firm held a Female Founders Summit in San Francisco to shine the spotlight on ten cutting-edge startups with at least one female founder. Companies that participated represented the present and future of artificial intelligence, IoT, virtual reality, and mobile technology sectors that are not just of particular interest to us but that also currently lack female representation.

Saha Fund: Bangalore-based Saha Fund is a venture capital & private equity firm headed by Ankita Vashishta, Founder & CEO. Saha Fund is India’s (and Asia’s) first venture capital fund that promotes women entrepreneurship. The firm is dedicated to investing in women-led companies across different sectors. Added to this, the fund is keen on companies that use technology to scale. Some of the companies Saha has backed include - Fitternity, Kaaryah, Stelae Technologies and Joulestowatts. Fitternity founded by Neha Motwani is a one-stop-destination for fitness enthusiasts looking to find and book fitness activities. It is supported by credible fitness content, community platform and an e-store. Stelae Technologies, founded by Aruna Schwarz is a software vendor providing an automated conversion solution for multiple categories of content. According to Saha Fund large companies with more woman in leadership perform significantly better financially, achieving 41 percent higher ROI and 56 percent better-operating results. Also, the firm believes that woman-led private Technology companies achieve a 35 percent higher return on investment, and when venture-backed. Hence, in order to bring a change in the society, Saha Fund endeavours to discover and leverage the untapped women talent available in the market and bring it to the forefront.

She Capital: The firm was founded with a belief to help the next generation of phenomenal female-led businesses scale to their maximum potential. According to research conducted by She Capital, when women business owners pitch their ideas to investors for early-stage capital, they receive significantly less - a disparity that averages more than $1 million - than men. Yet, another study from Boston Consulting Group shows a new dimension to a growing body of research showing what many have long suspected: Women-run companies have many attributes that make them good investments. Better, perhaps, than male-led companies. Hence, in order to encourage more women to participate in the Indian startup ecosystem and take on the boys’ club in the Indian unicorn ecosystem, Founder and former CEO of Mydala, Anisha Singh launched early-stage venture capital fund, She Capital, to facilitate fundraising for Indian women entrepreneurs. She Capital especially focuses on Pre-Series A and Series A startups working in the consumer services tech space. Earlier this year, for its initial fund, She Capital also decided to invest an average ticket size of Rs. 3 crore to Rs. 5 crore in 12-14 female-led early-stage businesses. The organization aims to trigger a domino effect in the Indian entrepreneur community by inspiring more women to overcome their apprehensions and come forward to start their own businesses.

Conclusion

These are by no means the only VC firms that provide funds to female entrepreneurs. Thankfully, there is a growing movement among investors to recognize and support female-led startups. However, the aforementioned VCs are the one who believes in trailblazing, and their efforts are really commendable. But, to be fair, if the nation wants to witness the actual potential of the women leaders then the nation needs more such leading VCs in the business and startup ecosystem. The truth is today most of the women entrepreneurs in India are struggling with the dearth of investors who can support and encourage them. The ratio of male and female investors in India is sadly of 10:1. A lot has been written about the male-dominated startup culture in India, but when it comes to female investors and Venture Capitalist, there is a conspicuous amount of absence. This imparity needs to be wiped out, and the only way is to trust and support women in our country.