Female Founders Fund announced Tuesday the closing of its Fund III after raising $57 million to create what the seven-year-old New York-based early-stage fund considers “the largest fund for seed capital specifically for female founders.”
The oversubscribed fund is backed by institutional investors including Goldman Sachs, Cambridge Associates, Melinda French Gates’ Pivotal Ventures, Twitter, Plexo Capital and the Doris Duke Charitable Foundation. It also includes investments from 23andMe founder Anne Wojcicki, YouTube CEO Susan Wojcicki and Houseparty co-founder Sima Sistani.
“I firmly believe we are missing out on transformational ideas by not putting resources behind women,” said Melinda French Gates, founder of Pivotal Ventures, in a statement. “I’ve invested in the Female Founders Fund because we need women founders and funders at the table if we want to build a more prosperous and inclusive economy for everyone. New and innovative ideas come from everywhere; we can't keep looking in the same old packages.”
Fund III brings FFF’s total assets under management to over $95 million since it was formed in 2014 to invest in female-founded technology companies and lifestyle brands. The third fund’s portfolio is already 70% invested in BIPOC founders, which stands for Black, Indigenous and people of color, Anu Duggal, founding partner of Female Founders Fund, told TechCrunch.
FFF began raising its third fund in 2020, making its first close just before the global pandemic locked everything down. That didn’t slow down Duggal’s ability to meet potential investors, which she said was done from her kitchen table.
“It was an incredible testament to how fast so much can be done without the flights and in-person meetings, which does take a bunch of time,” she said. “I think investors felt the same because March through June was preoccupied with making sure portfolio companies were in a good spot.”
The new fund is a continuation of FFF’s existing strategy — essentially doubling down on investing in female, women of color and LGBTQ+ founders who are building companies at the seed stage. The biggest differentiator with the third fund is that FFF will be able to increase its check sizes to between $750,000 to $1 million, Duggal said. Half of the fund will go to follow-on funding.
While fundraising over the past 18 months, Duggal said she was inspired by the momentum of female-led companies going public, including Bumble, 23andMe and Figs, which also drove investor backing of the new fund, she added.
Fund III’s fundraising goal is in line with the transition from FFF’s previous funds: Fund I was $6 million and Fund II was $25 million. So far, FFF has invested in more than 50 female-led companies nationwide.
To date, FFF has invested in seven companies from Fund III, including a few that haven’t been announced yet or are in stealth mode. Duggal expects to be able to invest in 25 companies from this fund.
Many of the companies are pre-launch, so there aren’t early successes quite yet, but one of the first investments was in an at-home blood test created by one of Facebook’s female engineers, she said. FFF was able to bring in Anne Wojcicki as an angel investor.
“One of our themes is consumerization of digital health, and this is a great example,” Duggal said. “It can be annoying to have to go get blood drawn, and this is putting the experience and the data in the hands of the consumer.”
The Female Founders Fund is also looking at startups focused on the development of the workplace — tools for employees, small businesses and creators. Most everyone had to adjust to a pandemic working lifestyle, and the firm doesn’t see that ending soon.
Two newer areas of focus are climate change and education. Within education, FFF sees a trend in opportunities for technology to enable senior citizens to remain mentally engaged through continuing education. The firm is also looking at the climate market for technology to replace plastic food containers, refillable solutions, alternatives to meat and ways to record carbon usages on a daily basis.
“From day one, we have been committed to building the largest and most powerful network of female operators in technology,” Duggal added. “We are happy with the support we have received from Anne Wojcicki and Susan Wojcicki, Houseparty and some of our founders, as well as Melinda French Gates. This shows that we are developing something that is unique.”