Borski Fund will use this latest injection of capital to make follow-on and new investments in companies led by female tech entrepreneurs offering products and services for women.
The fund, named after influential 18th century Dutch banker Johanna Borski, was launched in October 2019 with an initial commitment of €21m to invest in female-founded or co-founded technology companies.
This latest investment, which brings the current fund size to €40m, is being made as part of Visa Foundation’s Equitable Access Initiative, which aims to invest $200m (€189m) over five years to help gender diverse and inclusive small businesses around the world access growth capital.
Najada Kumbuli, head of investments at the Visa Foundation, said the foundation had been “impressed by the [Borski Fund] team’s track record in investing in innovative, high growth and high impact women led businesses, while creating and fostering a thriving diverse entrepreneurial ecosystem in Europe.”
Since launch, the Borski Fund has made 10 investments in companies such as Closure, which supports families after the death of a loved one by terminating or transferring ongoing subscriptions and Inne, a healthtech startup that uses technology to help women understand their reproductive health.
Speaking to Impact Investor Simone Brummelhuis, co-founder, managing partner and fund director at Borski Fund, said that with this latest injection of capital the team were planning to make an additional 10 investments and were currently finalising an investment in an AI company in the aerospace industry.
She said: “As our mission is aligned with Visa Foundation, we will continue to build and manage our portfolio as we have in the past. The additional capital gives us the opportunity to make follow-on investments as well as several new ones.”
Brummelhuis confirmed that the fund was now closed to investment but said that the interest in the fund from Visa Foundation had attracted a lot of interest from other investors also. “Thanks to growing interest, we are now working on the strategy for fund two,” she added.
The Borski Fund’s investment thesis applies a triple-diversity lens with investments made by a predominantly female team into companies founded or co-founded by female tech entrepreneurs and a focus on products and services for women, such as start-ups in femtech and sustainability, which have a positive impact on the women for whom their products and services are designed for.
Gender funding gap in numbers
According to the State of European Tech 2022 survey, over the 10 months to 31 October 2022, 87% of all VC funding in Europe was still raised by men-only founding teams down from 88% for the full year 2018. By comparison, the proportion of funding raised by women-only teams had dropped from 3% in 2018 to just 1% in the first 10 months of 2022 with mixed-gender founding teams raising 12% of VC funding, up from 9% over the same time period.
Borski Fund also highlighted the findings of a study published in 2018 by the Boston Consulting Group which revealed that startups founded and co-founded by women were significantly better financial investments. According to the study, for every dollar of funding, these startups generated 151% more in revenue than their male-led counterparts.
Part of the problem also lies in the gender gap within venture capital itself. Pointing to a 2022 report published by European Women in VC, a community of more than one thousand senior female venture capital investors, which revealed that women make up just 15% of general partners at VC firms, Laura Rooseboom, co-founder and managing partner at Borski Fund, said: “Men generally invest in men, and male investors dominate the industry. If more women were involved in the investment decisions of banks and large investment funds, more capital would flow into ventures guided or inspired by women”.
Looking to the year ahead, Brummelhuis predicted that more funds would be launched in 2023 led by diverse teams with greater collaboration within the VC space to accelerate the closure of the gender funding gap, highlighting the work of European Women in VC, of which Borski Fund is a founding partner.
“Networks such as European Women in VC or Transact in the US play a vital role as they provide access to fund of funds and LPs, which would otherwise be tough to get in front of, especially for emerging fund managers raising their first or second fund,” explained Brummelhuis. “Most of us have small teams with limited resources, so collaborating with other female-led funds through the network will continue to be critical to accelerating our fundraising in the future.”