BBG Ventures has raised a new $60 million fund. The firm started in 2014 with a focus on backing female founders. Now, it is expanding its mandate to support a broader range of underrepresented entrepreneurs.
“This is not about abandoning women, but expanding our mandate to back a diverse founding team,” said Susan Lyne, co-founder of BBG Ventures. Despite the shift in strategy, female founders remain a significant focus for the firm. BBG Ventures is excited to support strong, underrepresented founders across various sectors.
These sectors include healthcare, fintech, and artificial intelligence (AI). In the first half of 2024, Black-founded U.S. startups received just $228 million in funding. This accounted for only 0.3% of the nearly $79 billion invested in U.S.-based startups.
The figure represents a 60% drop from the first half of 2023. In 2019, BBG Ventures raised a $50 million fund. This marked the first time it attracted capital from institutional investors.
Some of these investors include the State of Michigan Retirement Services and Illumen Capital.
Backing female and diverse founders
Some of BBG Ventures’ notable investments include genAI startup Topline Pro and skincare company Starface.
Co-founder Nisha Dua mentioned that these institutional investors returned to back their latest fund. They even increased their commitments. BBG Ventures’ new fund has already supported several startups.
These include UpWage, an AI recruiting startup for hourly workers, and Nara, a startup that offers FDA-approved organic whole milk formula. Despite some focus on AI, Dua emphasized that the firm is not becoming AI-centric. “Some funds are building a portfolio of just AI companies,” she said.
“That’s not us.”
The venture capital landscape remains challenging, especially for sub-$100 million funds. “The vast majority of VC funding this year goes to a very small pool of funds. Sub-$100 million funds have a tougher time raising,” said Lyne.
However, BBG Ventures’ latest fundraising success is seen as a validation of their thesis. The firm believes that broadening access to capital for underrepresented groups is impactful. For BBG Ventures, the future involves continuing to support diverse entrepreneurs.
These entrepreneurs can drive innovation across different industries.
