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In brief: Colorful Capital to channel funds to LGBTQ+ business leaders 

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Published: 17 June 2022

VC firm launched to bridge financing gap in LGBTQ+ led businesses. Plus, Beyond the Grid Fund Africa moves to implementation phase, and SUSI Partners’s latest energy efficiency and transition fund

Colorful Capital: Research found that as well as having less access to early-stage capital, LGBTQ+ founders faced discrimination when fundraising | Photo by Alxey Pnferov on iStock

Venture capital firm Colorful Capital has been launched in the US in response to the financing gap in LGBTQ+ led businesses. 

Founded by Megan Kashner, professor of sustainability and social impact at the Kellogg School of Management at Northwestern University, and William Burckart, CEO of TIIP (The Investment Integration Project), Colorful Capital hopes to raise awareness among the investor community of the structural fundraising hurdles LGBTQ+ founders face, as well as the overlooked opportunities presented by their businesses. 

VC firm Backstage Capital estimates that LGBTQ+ founders receive less than 1% of VC funding and according to the Startout Pride Economic Impact Index, raised just $13bn (€12.5bn) in venture capital, compared to $1.8tn (€1.7tn) raised overall. 

Colorful Capital’s own research on the LGBTQ+ experience in venture funding backs these findings. It found that as well as having less access to early-stage capital,  LGBTQ+ founders faced discrimination when fundraising, frequently find themselves outside the circles of connection and acceptance among VCs with the path to raising venture capital often blocked when no investor steps forward to lead a funding round. 

“The research shows that investors can achieve outsized returns from diverse teams—whether it’s improved risk management, amplified IRR or increased valuation,” said Kashner. “We’re bringing that investment thesis to companies led by LGBTQ+ founders that have been routinely underestimated by mainstream capital providers. It’s an investment opportunity whose time has come.” 

Beyond the Grid Fund for Africa moves into project implementation phase

The Beyond the Grid Fund for Africa (BGFA) programme, a multi-donor results-based financing programme for supporting the scale-up of energy access in six sub-Saharan African countries, is progressing to its next phase as project implementation has started in Burkina Faso, Liberia and Zambia. 

The first contracts under the BGFA programme in Burkina Faso, Liberia and Zambia were recently signed, supporting the establishment of over half a million off-grid energy connections.  

“We are very happy to announce that we have signed a framework agreement with the international consultancy company NIRAS to establish a local footprint supporting the implementation of the BGFA programme together with our long-standing partner REEEP. We are really excited to move into the next phase of the programme and, with support from our two project implementation partners, monitor and assist the progress of our financed projects in all BGFA countries,” said Ash Sharma, head of Beyond the Grid Fund for Africa and vice president of Green Transition Special Funds at Nefco. 

BGFA will work with NIRAS, a multi-disciplinary engineering consultancy company operating globally and with a strong presence in Africa, to strengthen its local capacity and presence in all the project countries. 

SUSI Partners launches energy efficiency and transition credit fund  

Zurich-based SUSI Partners have announced the launch of the SUSI Energy Efficiency and Transition Credit Fund (SEETCF) to invest in energy efficiency measures, on-site production of clean energy, and solutions enabling clean energy use through its asset-based structured financing solution.  

Compliant with Article 9 of the EU’s Sustainable Financial Disclosure Regulation, SEETCF aims to contribute towards climate change mitigation while supporting the long-term development of economies through the buildout of sustainable infrastructure and the provision of affordable and clean energy.  

The 15-year vehicle with a target size of €400m will focus on European countries while opportunistically investing in other OECD markets, according to a company announcement. 

While SUSI’s credit platform originally focused on traditional energy efficiency measures such as LED streetlighting and building retrofits, its structured financing solution has proven applicable to a far broader array of energy transition infrastructure themes including self-consumption solar photovoltaics, heat pumps and smart metering. 

SUSI’s credit team, which has also delivered the firm’s first two energy efficiency funds, has deployed close to €500m into nearly 3,000 single projects across more than 70 transactions since 2015. 

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