Female Founders Fund Closes $57M Third Fund

Female Founders Fund Closes $57 Million Fund III

Female Founders Fund (FFF) revealed on Tuesday the successful completion of fundraising for its Fund III, securing $57 million. This achievement establishes what the New York-based, seven-year-old early-stage fund identifies as the largest fund dedicated to seed-stage funding for female entrepreneurs.

Fund Backing and Investor Support

The fund experienced oversubscription and garnered support from prominent institutional investors. These include Goldman Sachs, Cambridge Associates, Pivotal Ventures – spearheaded by Melinda French Gates – Twitter, Plexo Capital, and the Doris Duke Charitable Foundation.

Furthermore, the fund attracted investments from notable individuals such as Anne Wojcicki, founder of 23andMe, Susan Wojcicki, CEO of YouTube, and Sima Sistani, co-founder of Houseparty.

Melinda French Gates on Investing in Women

“I maintain a strong conviction that we are overlooking potentially groundbreaking innovations by failing to adequately invest in women,” stated Melinda French Gates, founder of Pivotal Ventures. “My investment in the Female Founders Fund reflects the necessity of having women both as founders and funders to foster a more equitable and thriving economy for all. Truly novel ideas originate from diverse sources, and we must broaden our search beyond conventional avenues.”

Fund III and Total Assets Under Management

With Fund III, FFF’s total assets under management now exceed $95 million. This milestone has been reached since the fund’s inception in 2014, which was focused on investing in technology companies and lifestyle brands founded by women.

Anu Duggal, founding partner of Female Founders Fund, shared that 70% of the third fund’s portfolio has already been allocated to BIPOC founders – representing Black, Indigenous, and people of color – in a discussion with TechCrunch.

Fundraising During the Pandemic

FFF initiated the fundraising process for its third fund in 2020, achieving its initial close just prior to the widespread lockdowns caused by the global pandemic. Despite this challenging environment, Duggal successfully engaged with prospective investors, conducting meetings from her home.

She noted that the shift away from travel and in-person meetings actually expedited the process. Investors, she believes, shared this sentiment, as the period from March to June was largely dedicated to supporting existing portfolio companies.

Investment Strategy and Check Sizes

The new fund continues FFF’s established investment strategy, effectively doubling down on its commitment to female, women of color, and LGBTQ+ founders at the seed stage. A key distinction of Fund III is the increased check sizes, ranging from $750,000 to $1 million.

Duggal also indicated that half of the fund will be reserved for follow-on investments.

Momentum of Female-Led Companies

Duggal highlighted that the recent public offerings of female-led companies like Bumble, 23andMe, and Figs inspired investor confidence and contributed to the success of the fundraising efforts over the past 18 months.

Fund Growth and Investment History

Fund III’s $57 million goal represents a significant increase compared to FFF’s previous funds: Fund I was $6 million, and Fund II was $25 million. To date, FFF has invested in over 50 companies led by women across the nation.

Current Investments and Future Plans

FFF has already made investments in seven companies from Fund III, with several remaining undisclosed or in stealth mode. Duggal anticipates investing in approximately 25 companies through this fund.

Many of these companies are still in the pre-launch phase, and demonstrable successes are yet to emerge. However, one early investment was made in an at-home blood testing service developed by a female engineer from Facebook, with Anne Wojcicki joining as an angel investor.

Focus on Digital Health

“This investment exemplifies our focus on the consumerization of digital health,” Duggal explained. “The convenience of at-home blood testing, and the direct access to personal data, represents a significant improvement for consumers.”

Expanding Investment Areas

The Female Founders Fund is also actively exploring startups focused on the future of work, including tools for employees, small businesses, and content creators. Recognizing the widespread shift to remote work, the firm believes this trend will persist.

Additionally, two emerging areas of interest are climate change and education. Within education, FFF is identifying opportunities for technology to support continuing education and mental engagement among senior citizens.

In the climate market, the firm is seeking technologies to replace plastic food containers, promote refillable solutions, offer alternatives to meat consumption, and accurately track daily carbon usage.

Building a Powerful Network

“From the outset, our commitment has been to cultivate the largest and most influential network of female operators in the technology sector,” Duggal concluded. “We are grateful for the support of Anne Wojcicki, Susan Wojcicki, Houseparty, our founders, and Melinda French Gates. This demonstrates that we are building something truly unique and valuable.”