Smart Investing: Targeting 50% of New UNICEF Innovation Fund Companies to be Female-led in 2019

UNICEF Innovation Fund launches initiative to build diverse portfolio of investments

Milja Laakso, UNICEF Innovation Fund Portfolio Collaborations
Smart Investing MasterClass Cover Photo
UNICEF Innovation
16 January 2019

2019 Reality Check: We are failing to spread our funds equally between men and women.

At its core, the UNICEF Innovation Fund is designed to work with -- and provide solutions for -- traditionally underserved markets and people. Two years on from our first investments, we've honored this commitment in geography, industry sector, and technology. But in supporting a diverse group of founders? There, we've fallen short.

In 2019, we are going to fix this -- we’ll support more women-led companies; continue to champion equal representation within the start-ups we fund, and hold the Innovation Fund team at UNICEF to this same standard.

Enter: Smart Investing -- UNICEF Innovation Fund’s initiative to invest in a diverse portfolio of startups: from 2019 onwards. Through the Smart Investing initiatives, we commit to improving diversity, so that half of the new portfolio companies we bring in every year have a female lead.  In the longer term, our goal is to grow the share of female-led companies in our overall portfolio from 30% to 50%.

Team working in table
UNICEF Innovation Fund portfolio: Thinking Machines - the team at work.

Why invest in women? Supporting female-led companies is not just a nice thing to have, it’s better business and is smart investing. 

Research has shown that women in top leadership positions of a company are linked to better financial results -- McKinsey was among the first to show the correlation almost 10 years ago, and subsequent studies have validated the findings. Several studies show that investing in female-led startups shows stronger return on investment compared to predominantly male-led companies. Similarly, top VCs are making the same finding within their portfolios -- companies with a female founder outperform male founded teams by high numbers.

“A coach told me there were a lot of women that tend to mix personal context and emotions with business. The coach helped me to understand that being emotional can be useful for the project - that made me keep fighting for the project and to continue.  Personal commitments can be beneficial - when you have to keep on going because of your family, you have more strength than anyone." Andrea Oviedo, CEO & Founder, Pixframe Studios.  
Team members from Atix Labs, a UNICEF Innovation Fund Portfolio member which is building Circles of Angels - a blockchain platform that matches enterprises to funders. ©AtixLabs
Some of the team members from Atix Labs, a UNICEF Innovation Fund Portfolio member which is building Circles of Angels - a blockchain platform that matches enterprises to funders.

So why is this still a problem?

“It’s always hardest in the beginning, when no one believes in you. Once you have a couple of proof points, everything is easier. Angel investors are very important. They are very used to investing into a specific set of entrepreneurs and men fit that box more easily: technically competent, almost arrogant, wild vision (think “Elon Musk”). Fewer women fit that role. That first person who believes in you is so important, and for women that first person is less often there.” Stephanie Sy, CEO and Lead Data Scientist, Thinking Machines.

UNICEF’s Innovation Fund is not alone in facing this challenge. According to data, only 2% to 10% of VC funding goes to female-led companies globally. What else (have we heard) is going on?

  • Small pipeline … or a power problem -- many VCs quote that the gap is because the number of women- founded tech companies is still low compared to male-led companies, and thus the pipeline to choose from is smaller. However, as the researcher Sheila Herring argues, it’s not a pipeline problem, it’s a power problem. In emerging markets, too few female-led companies are accessing first stage financing:  a study covering over 8,000 startups that applied to accelerators in emerging markets found that nearly half of the businesses had a female co-founder. However, at the post-accelerator stage, the numbers had dropped drastically:  only 13 percent of the companies had female leadership.
  • Unconscious bias, coupled with the fact that most VC funders are still male. A Kauffman Fellows study found that women tend to invest more in female-led companies than men do, however, the percentage of women in angel investors is still low. Women and men also get asked different questions by VCs, forcing women to focus more on safety, responsibility, security, and vigilance in their pitches, ultimately affecting how much funding they get.
  • Lack of mentors, role models and networks in the field for female business leaders.
Female stats

Our goal: From 2019 and onwards, 50% of our new portfolio companies will be female-led.

UNICEF Innovation Data Scientist, Elisa Omodei mentors startups
During a 3-day Data Science Cohort workshop in New York, UNICEF Innovation Data Scientist, Elisa Omodei mentors startups working on Data Science solutions.

UNICEF’s Innovation Fund is a venture fund set up to invest in startups building early stage frontier technology solutions in emerging and developing economies. Since its incubation, the fund has aimed to build a diverse portfolio and to address existing inequities through its investments.  While the UNICEF Innovation Fund’s investing team is largely female, this is a challenge we haven’t been able to crack.

As ex-Facebook product manager, Bo Ren wrote, “If diversity were a product that launched 2 years ago it would be considered a failure.” We at the UNICEF Innovation Fund are determined to fix the balance for our fund and show to others it can be done.

Smart Investing initiatives: Get involved.

Build community and inspire. As a first step, we are launching a master class series that features bright, fabulous (and female) leaders in the startup space, tackling some of the most common challenges female entrepreneurs in emerging markets face. Find out more about the Smart Investing Master Classes here.  

Do our homework. Second, we have done research into our selection process and will be testing strategies to ingrain a diversity focus throughout our sourcing and selection processes. We pledge to work in the open on this and share our successes and failures so that our experience can contribute to the industry-wide effort.

Follow this space #smartinvesting for updates and stories as we share our journey and join the conversation to share your experience.

Reaching out. Third, we will be building partnerships with networks, incubators, accelerators, and investors that are already working to grow female-led tech startups in emerging markets, to grow our pipeline and the available support structures for our investees.

Know any female founders out there who need seed funding, or who may be interested in our Smart Investing initiatives? Nominate them to us, reach us at