Summary:
BBG Ventures raises a $60 million fund to support diverse entrepreneurs.
The fund expands its focus beyond just female founders.
Pivotal Ventures, California Endowment, and Mizuho join as new investors.
The funding landscape remains tough, especially for Black-founded startups.
BBG plans to invest in sectors like healthcare, fintech, and AI.
BBG Ventures Raises $60 Million Fund
New York-based BBG Ventures has successfully raised a new $60 million fund aimed at investing in both female founders and entrepreneurs from diverse backgrounds. This expansion comes with new institutional investors, including Pivotal Ventures, California Endowment, and Mizuho.
A Shift in Focus
Founded by Susan Lyne and Nisha Dua in 2014, BBG Ventures initially focused exclusively on backing female founders. However, after a decade, they are broadening their mission to include a diverse range of entrepreneurs.
"This is not about abandoning women, but expanding our mandate to back a diverse founding team," Lyne stated.
The Current Landscape
The decision to diversify comes amidst a funding slump in the venture capital space, especially affecting Black-founded startups, which received a mere $228 million in the first half of 2024 — only 0.3% of the total venture capital funding.
Notable Investors and Past Successes
BBG Ventures has previously invested in successful companies like Spring Health, which is currently valued at $3.3 billion, and KiwiCo. Their latest fund also sees returning investors like Nordstrom, Verizon, and Bank of America, showing confidence in BBG's new strategy.
Focus on Underrepresented Founders
Dua emphasized that while female founders remain a focal point, they are excited to support underrepresented founders across various sectors, including healthcare, fintech, and AI. The fund has already backed an AI recruiting startup called UpWage.
Challenges Ahead
Lyne pointed out that raising funds as an emerging fund manager is increasingly challenging, with sub-$100 million funds facing tougher competition. Despite these hurdles, the successful fundraising for this new fund is seen as validation of their thesis that impact investing can broaden access to capital.
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