Mastercard (MA) is becoming the cornerstone investor in a new $100m (£73m) fund targeting female-led businesses.
Mastercard said on Monday it would be the lead investor in a new female-focused venture capital fund set up by Astia, a Silicon Valley-based non-profit. Astia works to address funding disparities in for high-growth startups led by women. The firm has its own proprietary system for eliminating bias in investment decisions.
“We’ve realised for quite a while that women founded companies are really underfunded,” Ann Cairns, executive vice chair of Mastercard, told Yahoo Finance UK. “They’re struggling all over the world.”
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Globally, just 2% of venture capital funding went to female-led businesses last year, according to Astia. Just 9% went to businesses with female representation in among leadership.
“There is a great deal of talk about inclusion and women within venture capital, but VCs need to do what they do best – invest,” Astia chief executive Sharon Vosmek said in a statement.
Cairns said she met Vosmek several years ago and was “so impressed by her company and their ethos”.
“Since then we’ve been talking about can we work together and can we come up with something that Mastercard feels comfortable investing in,” she said. “Hence this fund.”
Cairns declined to say how much Mastercard would be investing but indicated it would be significant. Other investors include former Goldman Sachs Asset Management chair Jim O’Neill and California-based B-corp Portola Creek Capital. Astia hopes to finalised the fund by the second quarter of this year.
“It’s not philanthropy, it’s just good business,” Cairns said.
“Absolutely there’s a financial motive. We know that we’re wasting trillions by having women not contribute to the world economy. From a Mastercard point of view, we recognise that women are incredibly important to our business because 85% of the day-to-day buying decisions are made by women.
“This is saying: look, we actually believe that women-led businesses are good investments and actually they’re performing very well during the COVID situation.”
Cairns said the fund was part of a range of initiatives Mastercard is running to help female founders. Others include a global women entrepreneurs index and efforts to connect 25m female-led small businesses to the global financial system in the next five years.
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