Diversity has been a hot trend in tech for the past few years as companies and investment firms seek to rectify some of the issues in the industry that mean only 18 per cent of the UK’s tech industry are women, and only 4 per cent come from BAME backgrounds.
Ada Ventures, a new venture capital (VC) fund from Francesca (Check) Warner (also co-founder of Diversity VC) and Matt Penneycard, is part of the mission to change these stats. Today, the fund has announced that it has raised £27 million to invest in overlooked founders across the UK in Europe, from the likes of the British Business Bank, Atomico and Arlan Hamilton of Backstage Capital – a US-based fund also focused on diverse teams.
“Having worked in venture for the last four years, and through co-founder Diversity VC, I’ve seen how structurally narrowly-focused the industry is, investing in the same founders building products and services for the same customers. This is a huge missed opportunity,” said Warner.
The fund takes its name from Ada Lovelace, the 19th century scientist who wrote the world’s first computer programme. Its aim is to have the most diverse pipeline and portfolio of any fund in Europe by investing in start-ups before they even raise a seed round – this will help companies to kickstart their research and product development, with a view to Ada Ventures investing at later stages too.
As a result, it wants to invest in companies that are focusing on underserved groups including the ageing population, women and young people. Start-ups that are tackling the healthcare sector, the future of work and consumers are key to its mission. So far, it has backed companies such as Ferly, the sexual wellness audio app, Polipop, creator of flushable sanitary pads, and Predina that uses AI to predict and prevent vehicle crashes.
In addition, the fund is going to work with its Ada Scouts, a network of people throughout the industry that will help Ada Ventures to find the start-ups the fund wants to support, with the help of a finder’s fee. Current scouts include Hustle Crew, which aims to make the industry more inclusive, Muslamic Makers, which represents Muslims in tech, and YSYS, a start-up community for diverse founders.
Warner says the use of the scouts will give the fund exposure to founders from diverse backgrounds who are solving problems overlooked by the current crop of founders and VCs.
Take for instance, Polipop. Founder Olivia Ahn said that in early investor meetings it was difficult to find people that bought in to its sustainable femtech mission. “From the first meeting with Ada, it was clear that Check and Matt were different. They were not only fantastic advocates for the femtech space but also for female and minority founders,” she added.
After years of disappointing stats and figures about investment in female-founded companies, things are starting to look up. According to PitchBook, VC investment in all-female founding teams hit an all-time high in 2019 at $3.3 billion. This may only be 2.8 per cent of capital investment across the whole US start-up ecosystem, but last year the figure was only 2.2 per cent so things are improving year on year.
“Fundamentally, Ada Ventures is about true inclusion, and we will invest in anyone, no matter what they look like and where they come from,” said Warner.