Artesian Venture Capital has attracted cornerstone investment of $45 million for a Female Leaders VC Fund which is targeting raising $100 million.
The fund is being raised by Artesian in partnership with Melbourne-based female-focused angel investor group Scale investors.
Initial commitments have come from industry super funds Hostplus and legalsuper.
The Female Leaders VC Fund will invest in Series A and B capital raising rounds by female-led ventures across the Asia Pacific region.
Announcing the launch of the fund, Artesian said it and Scale recognised that talent was evenly distributed across male and female founders, as well as investors, employees and board members. Despite this, there remained material inequality between opportunities available for male and female founders in the start-up ecosystem.
For example:
- Startups with male-only founders receive more than 85% of global VC funding
- 97% of VCs are male
- Male founders and employees own 89% of total start-up equity
- Start-ups with female-only founders receive less than 3% of global venture capital funding
- The average deal size of female-founded start-ups is less than half that of male-founded start-ups
- female founders and employees own only 11% of total start-up equity
This inequality has resulted in assymetrical capital distribution and a relative value pricing opportunity.
Artesian says The Female Leaders VC Fund will address this market failure and target strong returns by providing financial and strategic support to the unique perspectives, unexplored business opportunities and under-invested talent of female founders in Australia, New Zealand, and the broader Asia Pacific region.
Artesian has developed a proprietary gender diversity assessment score (GDAS) which will be used during the sourcing and deal pipeline process to establish which startups are eligible for potential investment from the fund. Artesian hopes that the GDAS will be adopted more broadly, across the ecosystem, to benchmark gender diversity in early-stage companies, provide greater transparency, and serve as a means to measure future impact and progress.
Artesian is the investment manager for the Female Leaders VC Fund while Scale Investors is leading the fund’s community engagement mentorship and education for female founders and investors across Australia.
The fund has a predominately female investment team including Artesian partners Mei Lee and Vicky Lay, as well as portfolio managers, analysts and legal/operations staff including Ali Clunies-Ross, Melody Zhang, Fiona Zheng, Carol Lu, Channing Chen, Kate Robinson, and Jenny Chu.
The fund’s portfolio manager, Ali Clunies-Ross, said: “Female-led start-ups suffer under-investment not due to a lack of talent, but from the lack of opportunities caused by cognitive biases and pattern recognition in an industry where 97% of VCs are male.
“Artesian has recognised the chance to invest in an opportunity hiding in plain sight – female-led start-ups raising Series A and Series B funding. Artesian relishes our role as first-movers and ecosystem builders and believe that you do not have to sacrifice market leading returns while delivering transformational change.”
Scale Investors was co-founded in 2013 by Susan Oliver, Annette Kimmitt and Carol Schwartz. The group’s day-to-day operations are run by co-chief executives Samar Mcheileh and Chelsea Newell and a board chaired by Catherine Robson.
The group’s angel syndicates have participated in more than 23 female-founded start-up investments, including Trademark Vision in which generated a 30x exit in 2020.
“Since 2013, Scale Investors have been activating investment activity for early-stage female-founded companies to close the entrepreneurial gender gap,” Robson said. “We are committed to building innovation skills in Australia. Our work today is creating the jobs and companies of the future. The need for women to participate and to succeed is critical to deliver real equality. The Female Leaders VC Fund is an extension of our efforts and provides later stage funding for the best female-led start-ups here and across the region.”
Hostplus chief executive David Elia said his fund’s $25 million commitment recognised “the compelling investment opportunity presented by the fund and sent a strong signal regarding Hostplus’ commitment to female economic empowerment”.
Hostplus had been a major supporter of the start-up and innovation ecosystem in Australia since 2015 and had helped the renaissance of Australian venture capital by backing firms including Blackbird, Square Peg and Artesian across multiple funds.
Elia said investment in the Female Leaders VC Fund would be complementary to Hostplus’ existing venture capital exposure, capturing opportunities that are sometimes under-represented or overlooked.
“We believe that the Female Leaders VC Fund can become a beacon for the best female founders across the region and a platform to encourage engagement, mentorship and education for female founders, investors, management and board members” he said.
Chief Executive of legalsuper, Andrew Proebstl, said the fund had a unique understanding and connection with the legal community which enabled it to hone its support, services, and product offerings to meet members’ unique needs. The fund had very high female membership, 71%, and was a member of Women in Super – an organisation advocating for a super system devoid of gender-based inequality.
“Addressing financial security for all our members is critical,” Proebstl said. “We recognise that currently women in Australia are retiring with almost half as much as men, despite their longer life expectancy. Closing this super pay gap requires addressing a range of inequalities including the wage gap, unequal caregiving burden, flexible work options and economic participation of women in the workforce.
“Our investment in the Female Leaders Fund reflects the compelling financial opportunity while also recognising the necessity to address gender imbalance at founder, investor, management and board levels in venture capital and the broader investment ecosystem”.
Image: Female Leaders VC Fund portfolio manager Ali Clunies-Ross.