Gender Smart Investing is Just That - Smart, and Here’s Why

The UNICEF Venture Fund was set up to make equity-free financial and mentoring investments in Open Source technology solutions with the potential to deliver social impact for children and their communities worldwide. In 2019, we launched the Smart Investing initiative to ensure that the Fund held a diverse and gender-balanced portfolio of startups. 

While we’ve calculated that last year women-founded companies received just under four per cent of investment capital globally, analysis of the Fund’s data highlights the outsized financial returns and social impact of gender lens investing. This is particularly noteworthy in emerging markets, making our case for further exploration of tech-enabled solutions that improve gender equality.

Diverse teams deliver superior returns

Research consistently shows that women-founded companies generate a higher return on investment, calculated at 35 per cent on average, alongside 12 per cent higher revenues. 

We found that among the Fund's 12 growth funded companies, five (42 per cent) women-founded or -led generate 62 per cent of the entire growth cohort’s revenue, while accounting for 90 per cent of beneficiaries and 92 per cent of children reached by the cohort. In early-stage investments, women-founded or -led companies received 43 per cent of investments and 64 per cent of follow-on funding, while reaching 41 million beneficiaries. 

Increasing the diversity of teams including with female leaders has positive impact on business outcomes as evidenced by a European Investment Bank report. These companies stimulate virtuous cycles, with women-led companies employing more women; being more innovative and investing more in staff training; while scoring higher on environmental, social, and corporate governance indicators.  

Strengthening a pipeline of women-led tech innovation in emerging markets

Over the years, our experience and data has debunked the myth that there's a scarcity of women-founded tech companies in general, and in emerging markets in particular. Rather, these company founders struggle to access initial funding and resources, as well as innovation networks and ecosystems.

An International Finance Corporation study of over 8,000 startups applying for accelerator funding in emerging markets revealed that nearly half had a woman co-founder. However, this dropped to 13 per cent at the post-accelerator stage, highlighting the systemic and unconscious barriers women face in securing early funding.

To address this, we created more opportunities for women entrepreneurs, while identifying and reducing structural barriers. The Fund collaborated with regional organizations, engaged outreach ambassadors, adopted more inclusive marketing language and imagery, removed bias from sourcing and selection processes, and developed online training. As a result, the share of women-founded and -led startup applications grew from 30 per cent in 2019, to 67 per cent in 2024.

The Road Ahead

The UNICEF Venture Fund’s experience over the past five years has demonstrated that investing in women-founded and -led companies drives economic growth and delivers social impact. Further exploration will unlock the potential of untapped talent in emerging markets, where women are twice as likely to pursue entrepreneurship, compared to more developed markets.

With five years left to meet the 2030 Sustainable Development Goals, the next frontier of the UNICEF Venture Fund is the opportunity to turn possibilities into realities. Ongoing development of frontier technologies such as blockchain, artificial intelligence (AI) and the internet of things (IoT), creates opportunities to pace social impact at the rate of technological evolution, in an industry with a valuation forecast of over $9.5 trillion by 2030.

With catalytic funding, the Fund will double down on past achievements, while capitalizing on our experience of smart investing that delivers globally meaningful diversity, equity and inclusion (DEI). This includes ensuring diversity amongst company founders and leaders, including of ability, age, location, and gender. While also making tech solutions inclusive by design, meeting the needs of the underserved and under-resourced, including those with disabilities, women and girls.

We’ve already taken initial steps through the Gender Responsive Innovation Challenge (GRIC), launched in collaboration with GITEX in Africa, Asia and the Middle East. The Fund focuses on three key areas: investing in diverse and underrepresented founders (especially women founders); increasing the availability of digital products and services that can solve the specific unmet needs of vulnerable and underrepresented populations (such as children, women, people living with disabilities and refugees); facilitating inclusive user design in the development of innovation, to reduce bias and increase accessibility for underrepresented populations.

UNICEF remains committed to harnessing the vast potential of innovation, by testing and adopting the tech frontiers that offer the best chance to address persistent social challenges affecting children’s lives worldwide.

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