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Rethink Impact raises $182M in second round of funding

Yahoo Finance’s Alexis Christoforous and Brian Sozzi speak with Rethink Impact Founder & Managing Partner, Jenny Abramson, about the firm’s successful second round of funding, and diversifying the venture capital space.

Video Transcript

ALEXIS CHRISTOFOROUS: One venture capital firm is set out to diversify leadership in the tech sector. Rethink Impact is a venture-capital firm that invests exclusively in tech startups founded by women, and they just raised $182 million in their latest round of funding. That was more than expected.

Joining us now is Jenny Abramson. She is Cofounder of Rethink Impact. Jenny, good to have you with us. You say that this pandemic has actually made it even harder for female-led startups to find some investment money. Why is that, do you think?

JENNY ABRAMSON: First of all, thank you so much for having me. Yes, there's been a 40% year-over-year decline in the percentage of venture-capital-funded deals of startups founded by women just this year since COVID. And I think it has to do with the fact that already female-led/founded companies were only getting 2.7% of venture dollars. That's 0.06% for Black female CEOs. And you add a quarantine environment to that, and it makes it so much harder for venture capitalists to meet new people who aren't in their network, and that tends to be underrepresented entrepreneurs.

BRIAN SOZZI: Jenny, in terms of your portfolio, which company is really changing the game right now? I'm sure a lot of them are doing some many great things, but which one is standing out?

JENNY ABRAMSON: I could never say one, but yeah, we've had a number of them that are doing great things. I'll give you a couple examples. Ellevest, which is an investment platform for women started by Sallie Krawcheck, has now more social-media followers than any financial institution in this country. Guild was a company upskilling front-line workers. Just got a billion-dollar valuation last year. And then our most recent investment in CareAcademy tackling the $103 billion home-care industry because people want to be able to get better in their homes and have the right care there. So we have many others, but that's a few examples.

ALEXIS CHRISTOFOROUS: You also have some big-name investors, right-- Melinda Gates, Ford Foundation, UBS. What are they coming to you and saying when they're actually trusting in your fund? What are they saying they're looking for in startups?

JENNY ABRAMSON: I think there's been a great realization of two main things. One, that investing in diverse management teams is not just good for the world but it's actually good business. There's been all sorts of data showing female-led businesses exit on average a year faster, grow revenue more quickly, are more capital efficient. And then I think the second is our companies tend to tackle major global challenges, and I think these investors are excited to put their dollars to work to not just make money but also do it while tackling educational inequality, health-care access, environmental problems, and financial sort of stability for every person in this country.

BRIAN SOZZI: Jenny, you mentioned education. You sit on the board of Georgetown Day School. As we all look towards the fall and kids getting back to school, can this be safely done even with the pandemic the way that it is right now?

JENNY ABRAMSON: You know, I won't pretend to be, you know, an expert in all things COVID. What I will say is that I know that every institution, including Georgetown Day School, is looking to find the balance between allowing kids to be in person, if at all possible, but also to supplement that where needed digitally at home in synchronous and asynchronous learning. So I think that every school is wrestling with the same questions, and a lot will become clearer in the next month when we see the COVID rates and where they go.

ALEXIS CHRISTOFOROUS: Jenny Abramson, cofounder of Rethink Impact, good luck to you. Thanks for being with us now.

JENNY ABRAMSON: No, thank you, and I'm excited to have more people connect with us on Twitter @AbramsonJenny and @RethinkImpact so that we can hopefully learn about great companies to look at. Thanks so much for having me.

ALEXIS CHRISTOFOROUS: Yeah, squeeze it in. All right, thanks, Jenny.