Did you know women led 49 percent of new businesses started in the U.S. during 2021?
That stat, drawn from a survey conducted by human resources software company Gusto, is even more astounding when you consider the infinitesimal amount of venture capital that entrepreneurs of the female persuasion typically pull in annually — a mere 2 percent, according to ongoing research by Pitchbook.
Of course, VC money is just one form of finance, but the reality remains that capital and investment flows to businesses are nowhere near gender-balanced for many, many reasons. While women are integral to entrepreneurship — not just in the United States but globally — they aren’t benefiting equitably from the system that backs it.
And that also goes for the world for climate finance. Even though women are disproportionately affected by climate change — in the form of droughts, floods and other disasters — and so have firsthand perspective on how to address it, they aren’t often on the receiving end of the money to find and scale solutions. Hence my colleague Leah Garden’s recent Dolly Parton-inspired series on female founders in climate tech. (You can read those articles here, here, here and here.)
This financing gap is the inspiration for a new call to action coordinated by GenderSmart, the Women in Finance Climate Action Group and 2X Collaborative. And it’s also the impetus for a new $53 million commitment by Amazon centered specifically on supporting female founders working on climate solutions. That investment will come in several forms, including $3 million to support the new Climate Gender Equity Fund, a public-private partnership established by the U.S. Agency for International Development (USAID). Amazon’s money will be matched with another $3 million from USAID.
The ability to make connections and have access to mentoring and other resources are equally as important for addressing the gender gap as money.
The other $50 million is part of the Climate Pledge Fund: Amazon will dedicate that money to women-founded and women-led climate tech companies, as well as incubators and accelerators that support initiatives centered on gender equity, such as Greentown Labs and Elemental Excelerator. "As an important step in solving climate change, we must address the gender inequalities that persist in climate finance, and ensure female entrepreneurs have an equal seat at the table and access to the funding, networks and technical support they need to scale climate solutions," said Kara Hurst, vice president of worldwide sustainability at Amazon, in a statement.
Because, let’s be clear, the ability to make connections and have access to mentoring and other resources are equally as important for addressing the gender gap as that aforementioned money.
When I chatted with Leigh Anne DeWine, director of social responsibility for Amazon, it became clear that many governance details for the public-private partnership — such as how the funding will be allocated, the timeframe for the partnership to play out, the regions that will be prioritized and how progress will be reported — are still being worked out. And there isn’t currently a racial diversity component being applied to the strategy.
"We are working directly with USAID to outline how it will work, governance, how the funds will be distributed, targeted recipients, and also how other companies will join," DeWine said.
To the latter point, she noted that signatories to the Climate Pledge will be encouraged to apply a gender lens to their own funding commitments.
When it comes to the $50 million in funding that will come from the Climate Pledge Fund, Amazon intends to consider leads from all categories but will be particularly focused on female entrepreneurs doing work in transportation and logistics; energy generation, storage and utilization; manufacturing and materials; circular economy; and food and agriculture.
That amount is a drop in the bucket compared with the overall size of the fund, $2 billion. As of the end of 2021, the Climate Pledge Fund had backed 13 companies. No firms added to the portfolio last year were led or co-founded by women; the same is true for the other seven publicly announced investments through Dec. 31.
The new female-centric climate funding commitment dovetails with several other recent Amazon pledges related to promoting equity. Particularly sizable is the $150 million Amazon is putting into the Amazon Catalytic Capital initiative, which is specifically meant to support VC funds, accelerators, incubators and other programs aimed at funding entrepreneurs — particularly those at an early stage — from "underrepresented backgrounds."
The company promised in early October to support at least 10 funds and more than 200 companies over the next 12 months. The specific focus of Amazon Catalytic Capita is on women, founders that identify as LGBTQIA+ and individuals that are Black, Latino or Indigenous. But there isn’t an explicit priority for climate tech.
Among the funds that have already received money are:
- Collide Capital, a Black-owned seed and pre-seed venture capital fund founded by two Black men younger than 35
- Elevate Future Fund, the effort led by Energy Impact Partners (check out my coverage of that effort here)
- Share Ventures, a fund focused on "human performance"
- Techstars Rising Stars Fund, which puts pre-seed money into underrepresented founders of color
The importance of this focus cannot be overstated. Consider this perspective from Carmelle Cadet, founder and CEO of fintech firm Emtech, funded by Collide Capital: "Emtech discovered a unique value proposition in rebuilding central banking infrastructure for the Web3 era. As a Black woman-founded tech company, having Collide getting excited about our vision was critical to our journey. We are better with them as partners, and I am excited to see how Amazon is supporting them to help even more entrepreneurs like me."