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Your deal flow is not diverse enough

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In light of Women’s History Month, we’re taking a look at the status of gender diversity in investment portfolios because women remain underrepresented in the field of entrepreneurship. Let’s delve into the numbers — and why your deal flow may not be diverse enough.

Women entrepreneurs and fundraising

There is an unmet need of $260 billion to $320 billion for women-owned company funding, according to a 2013 study conducted by the International Finance Corporation. A survey of women from 350 tech startups reinforced this: 72% of women respondents said that they faced difficulty attaining financial capital when they were starting their businesses and nearly 80% of them had to rely on personal funding. Furthermore, women founders receive less than 3% of all VC dollars.

The stark contrast between the ease of fundraising for men compared to women is apparent. Data show that men were four times as likely as women to access equity financing from angel investors or VCs (14.4% against 3.6%). The ease with which men tap into multiple sources for capital explains why they start companies with almost twice the capital of women founders on average.

So, why is fundraising harder for women-led startups?

Women’s struggle to attain capital can perhaps be explained by looking into the diversity in fund management firms. Fund managers’ lack of diversity ultimately contributes to the resulting funding inequality when it comes to their portfolios. Data from Women in VC show that only 5.6% of U.S. VC firms are women-led and only 4.9% of VC partners in the U.S. are women.

“Empowering women and people of color to drive the investment strategy of venture firms is the fastest and most effective course correction” for the lack of gender-diverse portfolios, the Women in VC report said. “Venture investors have extraordinary power to impact broader society norms. They decide what founders get funded, what businesses stand a chance at success, and what products get brought to market. These things, in turn, exert a determining influence on our culture.”

Investors must address the diversity issue within their ranks first; they must be aware of the existing unconscious bias and take extra actions toward improving their efforts in actively trying to source and invest in women-led startups.

Why is diverse deal flow important?

Diversifying an investment portfolio to include more women-led ventures means trusting in the leadership of women, which research has shown to be worth believing in. A 2012 study of company performance showed that more than 150 listed German firms excelled when they had at least 30% women representation on their executive boards.

Even more interesting, another study argues that women make better board directors than men. The findings revealed that women are more effective at accounting for multiple competing interests, solving problems creatively and building consensus. By comparison, male directors often made decisions based on rules, regulations and tradition.

Undeniably, companies managed by effective women leaders are set to provide a lucrative return on investment. Roy Adler, a Fulbright scholar and professor of marketing at Pepperdine University, conducted a 19-year study that found a correlation between companies with the best record of promoting women to senior positions and higher profitability — between 18% to 69% higher than the median Fortune 500 companies in their respective industries.

While the numbers prove that the financial returns can be promising, the bigger impact and importance of investing in gender diversity is the overall economic growth and prosperity that follows. Increasing opportunities for women entrepreneurs sets off a domino effect that local and global markets can benefit from.

McKinsey estimated that if total gender equality was achieved, the global gross domestic product (GDP) could be increased by up to $28 trillion globally by 2025. In fact, by not investing in women, the downsides prove to be quite massive. A study by the United Nations showed that the Asia-Pacific region, including China and the United States, loses at least $42 billion annually in GDP by not fully engaging women’s participation in their economy.

Seedstars, the Swiss investment holding group that focuses on investing in tech high-growth companies from emerging markets, provides a more in-depth view of the benefits of developing women entrepreneurship, specifically in developing countries.

The numbers make it evident that gender diversity is underutilized but highly valuable. In Melanne Verveer and Kim K. Azzarelli’s book “Fast Forward,” experts weigh in on the topic of gender inclusivity.

“The biggest destroyer of wealth creation is patriarchy,” Pax World Funds CEO Joseph Keefe said. “It’s not just up to women to ‘lean in’. Shareholders seeking better returns would do well to lean on companies to appoint and promote more women.”

“Women remain hugely underrepresented at positions of power in every single sector across this country,” Barnard College president Debora Spar noted. “We have fallen into what I call the 16% ghetto, which is that if you look at any sector, be it aerospace engineering, Hollywood films, higher education, or Fortune 500 leading positions, women max out at roughly 16%. That is a crime, and it is a waste of incredible talent.”

Moving gender inclusivity forward

Taking active measures to ensure that we are fully including women is necessary to make an impact. Since 2018, Seedstars has been actively working on gender equity within its core activities, highlighted in the group’s theory of change, such as sourcing of ventures, capacity-building programs and investment activities.

To date, Seedstars has supported more than 600 women-led enterprises and invested in 14 businesses co-founded by women. Additionally, Seedstars is working on gender equity when it comes to mentors, jury members and training delivery experts. Recent numbers show that about 30% of all Seedstars program participants are women, a number that Seedstars is proud to have increased over the past years (2018 numbers were more around 20%, depending on the region) and is committed to increasing that figure in the coming years.

Through the combined efforts of our own initiatives and those from investors who do their part in promoting gender diversity, the world is bound to reap the benefits of investing in what is proving to be one of the most powerful demographic groups the world is yet to fully embrace.

Recognizing the issue is the first step to solving any problem. The increase in awareness and action is sure to bring forth important development that makes the future brighter for women entrepreneurs everywhere.

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Vietnamese electric motorbike startup Dat Bike raises $2.6M led by Jungle Ventures

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Son Nguyen, founder and chief executive officer of Dat Bike on one of the startup's motorbikes

Son Nguyen, founder and chief executive officer of Dat Bike

Dat Bike, a Vietnamese startup with ambitions to become the top electric motorbike company in Southeast Asia, has raised $2.6 million in pre-Series A funding led by Jungle Ventures. Made in Vietnam with mostly domestic parts, Dat Bike’s selling point is its ability to compete with gas motorbikes in terms of pricing and performance. Its new funding is the first time Jungle Ventures has invested in the mobility sector and included participation from Wavemaker Partners, Hustle Fund and iSeed Ventures.

Founder and chief executive officer Son Nguyen began learning how to build bikes from scrap parts while working as a software engineer in Silicon Valley. In 2018, he moved back to Vietnam and launched Dat Bike. More than 80% of households in Indonesia, Malaysia, Thailand and Vietnam own two-wheeled vehicles, but the majority are fueled by gas. Nguyen told TechCrunch that many people want to switch to electric motorbikes, but a major obstacle is performance.

Nguyen said that Dat Bike offers three times the performance (5 kW versus 1.5 kW) and 2 times the range (100 km versus 50 km) of most electric motorbikes in the market, at the same price point. The company’s flagship motorbike, called Weaver, was created to compete against gas motorbikes. It seats two people, which Nguyen noted is an important selling point in Southeast Asian countries, and has a 5000W motor that accelerates from 0 to 50 km per hour in three seconds. The Weaver can be fully charged at a standard electric outlet in about three hours, and reach up to 100 km on one charge (the motorbike’s next iteration will go up to 200 km on one charge).

Dat Bike’s opened its first physical store in Ho Chi Minh City last December. Nguyen said the company “has shipped a few hundred motorbikes so far and still have a backlog of orders.” He added that it saw a 35% month-over-month growth in new orders after the Ho Chi Minh City store opened.

At 39.9 million dong, or about $1,700 USD, Weaver’s pricing is also comparable to the median price of gas motorbikes. Dat Bike partners with banks and financial institutions to offer consumers twelve-month payment plans with no interest.

“These guys are competing with each other to put the emerging middle class of Vietnam on the digital financial market for the first time ever and as a result, we get a very favorable rate,” he said.

While Vietnam’s government hasn’t implemented subsidies for electric motorbikes yet, the Ministry of Transportation has proposed new regulations mandating electric infrastructure at parking lots and bike stations, which Nguyen said will increase the adoption of electric vehicles. Other Vietnamese companies making electric two-wheeled vehicles include VinFast and PEGA.

One of Dat Bike’s advantages is that its bikes are developed in house, with locally-sourced parts. Nguyen said the benefits of manufacturing in Vietnam, instead of sourcing from China and other countries, include streamlined logistics and a more efficient supply chain, since most of Dat Bike’s suppliers are also domestic.

“There are also huge tax advantages for being local, as import tax for bikes is 45% and for bike parts ranging from 15% to 30%,” said Nguyen. “Trade within Southeast Asia is tariff-free though, which means that we have a competitive advantage to expand to the region, compare to foreign imported bikes.”

Dat Bike plans to expand by building its supply chain in Southeast Asia over the next two to three years, with the help of investors like Jungle Ventures.

In a statement, Jungle Ventures founding partner Amit Anand said, “The $25 billion two-wheeler industry in Southeast Asia in particular is ripe for reaping benefits of new developments in electric vehicles and automation. We believe that Dat Bike will lead this charge and create a new benchmark not just in the region but potentially globally for what the next generation of two-wheeler electric vehicles will look and perform like.”

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Binance Labs leads $1.6M seed round in DeFi startup MOUND, the developer of Pancake Bunny

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Decentralized finance startup MOUND, known for its yield farming aggregator Pancake Bunny, has raised $1.6 million in seed funding led by Binance Labs. Other participants included IDEO CoLab, SparkLabs Korea and Handshake co-founder Andrew Lee.

Built on Binance Smart Chain, a blockchain for developing high-performance DeFi apps, MOUND says Pancake Bunny now has over 30,000 daily average users, and has accumulated more than $2.1 billion in total value locked (TVL) since its launch in December 2020.

The new funding will be used to expand Pancake Bunny and develop new products. MOUND recently launched Smart Vaults and plans to unveil Cross-Chain Collateralization in about a month, bringing the startup closer to its goal of covering a wide range of DeFi use cases, including farming, lending and swapping.

Smart Vaults are for farming single asset yields on leveraged lending products. It also automatically checks if the cost of leveraging may be more than anticipated returns and can actively lend assets for MOUND’s cross-chain farming.

Cross-Chain Collateralization is cross-chain yield farming that lets users keep original assets on their native blockchain instead of relying on a bridge token. The user’s original assets serve as collateral when the Bunny protocol borrows assets on the Binance Smart Chain for yield farming. This allows users to keep assets on native blockchains while giving them liquidity to generate returns on the Binance Smart Chain.

In statement, Wei Zhou, Binance chief financial officer, and head of Binance Labs and M&A’s, said “Pancake Bunny’s growth and MOUND’s commitent to execution are impressive. Team MOUND’s expertise in live product design and servie was a key factor in our decision to invest. We look forward to expanding the horizons of Defi together with MOUND.”

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Battery Resourcers raises $20M to commercialize its recycling-plus-manufacturing operations

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As a greater share of the transportation market becomes electrified, companies have started to grapple with how to dispose of the thousands of tons of used electric vehicle batteries that are expected to come off the roads by the end of the decade.

Battery Resourcers proposes a seemingly simple solution: recycle them. But the company doesn’t stop there. It’s engineered a “closed loop” process to turn that recycled material into nickel-manganese-cobalt cathodes to sell back to battery manufacturers. It is also developing a process to recover and purify graphite, a material used in anodes, to battery-grade.

Battery Resourcers’ business model has attracted another round of investor attention, this time with a $20 million Series B equity round led by Orbia Ventures, with injections from At One Ventures, TDK Ventures, TRUMPF Venture, Doral Energy-Tech Ventures and InMotion Ventures. Battery Resourcers CEO Mike O’Kronley declined to disclose the company’s new valuation.

The cathode and anode, along with the electrolyzer, are major components of battery architecture, and O’Kronley told TechCrunch it is this recycling-plus-manufacturing process that distinguishes the company from other recyclers.

“When we say that we’re on the verge of revolutionizing this industry, what we are doing is we are making the cathode active material — we’re not just recovering the metals that are in the battery, which a lot of other recyclers are doing,” he said. “We’re recovering those materials, and formulating brand new cathode active material, and also recovering and purifying the graphite active material. So those two active materials will be sold to a battery manufacturer and go right back into the new battery.”

“Other recycling companies, they’re focused on recovering just the metals that are in [batteries]: there’s copper, there’s aluminum, there’s nickel, there’s cobalt. They’re focused on recovering those metals and selling them back as commodities into whatever industry needs those metals,” he added. “And they may or may not go back into a battery.”

The company says its approach could reduce the battery industry’s reliance on mined metals — a reliance that’s only anticipated to grow in the coming decades. A study published last December found that demand for cobalt could increase by a factor of 17 and nickel by a factor of 28, depending on the size of EV uptake and advances in battery chemistries.

Thus far, the company’s been operating a demonstration-scale facility in Worcester, Massachusetts, and has expanded into a facility in Novi, Michigan, where it does analytical testing and material characterization. Between the two sites, the company can make around 15 tons of cathode materials a year. This latest funding round will help facilitate the development of a commercial-scale facility, which Battery Resourcers said in a statement will boost its capacity to process 10,000 tons of batteries per year, or batteries from around 20,000 EVs.

Another major piece of its proprietary recycling process is the ability to take in both old and new EV batteries, process them and formulate the newest kind of cathodes used in today’s batteries. “So they can take in 10-year-old batteries from a Chevy Volt and reformulate the metals to make the high-Ni cathode active materials in use today,” a company spokesman explained to TechCrunch.

Battery Resourcers is already receiving inquiries from automakers and consumer electronics companies, O’Kronley said, though he did not provide additional details. But InMotion Ventures, the venture capital arm of Jaguar Land Rover, said in a statement its participation in the round as a “significant investment.”

“[Battery Resourcers’] proprietary end-to-end recycling process supports Jaguar Land Rover’s journey to become a net zero carbon business by 2039,” InMotion managing director Sebastian Peck said.

Battery Resourcers was founded in 2015 after being spun out from Massachusetts’ Worcester Polytechnic Institute. The company has previously received support from the National Science Foundation and the U.S. Advanced Battery Consortium, a collaboration between General Motors, Ford Motor Company and Fiat Chrysler Automobiles.

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