BBG Ventures has raised a new $60 million fund. The firm is expanding its focus beyond just female founders. It will now invest in startups launched by diverse founders across various races, ages, and income levels.
BBG Ventures was founded in 2014 by Nisha Dua and Susan Lyne. At that time, investors were starting to see the potential of female founders. Over the past decade, the firm has backed many successful women-led businesses.
With the new fund, BBG Ventures now manages $130 million in assets. It has made over 100 investments so far. The firm’s first fund required all companies to have at least one female founder.
About 70% also included a founder of color. In contrast, only 3% of venture capital funding in 2023 went to women-only teams. The second fund has major backing from investors like State of Michigan Retirement Services, Illumen Capital, and the George Kaiser Family Foundation.
New investors include Fairview, Pivotal Ventures, California Endowment, and Mizuho. The fund has already made seven investments. These include a recruiting platform for hourly workers and an infant formula brand.
Funding diverse founders across demographics
So far, 14.7% of the fund’s capital has been deployed. BBG Ventures’ strategy shift reflects the changing market and demographics.
As founders and consumers have become more diverse, the firm sees big opportunities. It wants to back founders who understand varied and intersecting consumer identities. “We believe the opportunity for founders who look different is bigger than ever,” explained Dua.
“It’s more of a reflection of the world evolving. Gender is not the only difference. Race is not the only difference.”
The firm’s research highlights important demographic trends.
These include a growing wealth gap, an aging population, and Gen Z becoming the first “majority-minority” generation. BBG Ventures’ new approach aims to invest in founders with unique insights into their target markets. However, this does not mean the firm is moving away from female founders.
“We are still going to be investing in women in a big way,” Lyne affirmed. Instead, it is adapting to a broader, more inclusive market. BBG Ventures plans to use the diverse backgrounds of founders to its advantage.
It wants to ensure its portfolio companies are ready to succeed in today’s rapidly changing environment.
