Last month, when dating app Bumble got listed and its founder and CEO Whitney Wolfe Herd became the youngest self-made woman billionaire, female entrepreneurs all over the world saw it as a defining moment. Back in India, an early-stage VC fund has been working toward making the same thing happen in the world’s third-largest startup ecosystem that is yet to up its game in having more women entrepreneurs.
Founded in 2018, She Capital invests in scalable businesses led by women entrepreneurs. Its founding partner Anisha Singh was one of the first few female startup founders in the country, having set up online discount coupons and deals platform Mydala in 2009.
Backed by the government-backed Small Industries Development Bank of India, along with international and domestic family offices, She Capital announced its first close at USD 9 million early last year, with the aim to take it to USD 27 million.
In an interview with KrASIA, Singh said she believes her fund can empower women entrepreneurs who believe in themselves and that there are going to be a slew of female-led unicorns in the coming years with the consumer economy thriving on the back of digital adoption.
Anisha Singh (AS): Why did you set up She Capital?
KrASIA (Kr): We started She Capital as an early-stage fund about two and a half years ago because we felt there was a need of a dedicated fund that invests in high-growth women entrepreneurs. No matter what people say about having plenty of funding going around, statistics show that there is not enough funding going to women entrepreneurs.
When I started Mydala in 2009, I was one of the first few women entrepreneurs. At that point, I didn’t realize the biases that I faced. For instance, while we were pitching to investors I was pregnant, and I’ve had people tell my co-founders we are happy to invest, but she has to leave.
I think somewhere down the line, some of those things stuck with me. In 2012, I started mentoring women entrepreneurs, because it just felt like the right thing to do. I became more passionate about this after my second daughter was born.
When I thought about whether my daughters would get the level playing field, the answer, quite honestly, was no. We are still about 100 years away in terms of gender parity. The fact is funding also is very different for women. The question that VCs asked a male entrepreneur is very different from the female entrepreneur. For instance, a male entrepreneur is asked, ‘how you are so sure you can scale to whatever you are saying you would?’ A female entrepreneur is asked, ‘are you sure you can scale? How will you take care of your family?’
So there’s a lot of unconscious bias. The feeling that this needs to change somehow kept growing in me. I had started my career with the Clinton administration on an initiative called Springboard, which was helping women entrepreneurs raise funding. Those women were such amazing role models. I became what I became because I saw an amazing woman entrepreneur.
There’s a cascading effect when women see women-role models. They aspire to become like them. And you need to change the environment so that there are more and more of these role models. For me, it was just the natural progression to be able to do She Capital.
AS: How many startups have you invested in so far?
Kr: We did the first close of our fund in January 2020. But because of COVID-19, we were not able to do too many. So we’ve only done two. We are closing two more by May. Now that we understand that there’s more excitement around the consumer internet businesses, we’re actively looking to deploy our capital.
With the first fund, we will only be able to invest in 12 to 15 companies. Our sweet spot is the check size of around USD 550,000. By fund three, we would have done close to about 70 to 80 companies.
We have never seen ourselves as a pure-play VC firm. Aside from the investments, I want to be able to give my founders all the tools that I didn’t have, or I thought would be nice for a founder to have to help with their growth.
We’re actively building out a community, a network, and a mentor board for our founders. Before the pandemic, once a month, we would get top women entrepreneurs and startups that were just starting out together for two hours in the evening. It was that comfort zone networking thing. We are now creating an online format for that. When it comes to networking and community building, we are a VC firm on steroids.
AS: What are the key areas that you’re looking at for investments?
Kr: Because a lot of our LPs (limited partners) doubted whether there were enough female-led startups, we decided to not put another filter. But the trend we see is there are a lot more women in health tech, beauty tech, and wellness space in general. We see that happening in our portfolio startups as well. Like, Samosa Singh, which is a food tech company has healthy instant snacks as its underlying theme. Clovia is doing lingerie but they’re coming out with a line of products related to skin.
AS: What were the challenges you faced during your transition from an entrepreneur to a VC?
Kr: Once Mydala got to a certain scale, I didn’t face any obvious bias. By obvious, I don’t mean that they were not biased, but they’re just not obvious about the bias any longer. It has been the same for the investor journey.
I faced more bias starting this fund than I did in my entrepreneurial journey. There was a double bias, not just for myself, but also because I wanted to back women founders. I’ve had one family office ask me to travel all the way to Bombay, only to tell me how silly the fund thesis to invest in women was.
But at the same time, I say it’s not just women for women, it’s also men for women because of the faith my co-founders and my team had in me. This fund also could not have taken off if it didn’t get such a warm welcome from the VC community. The people who have championed this fund and made it happen, investors and advisors, I’m a big fan of them. Many of them are my friends, whom I had pitched to over the last 10 years.
AS: When it comes to gender disparity in the startup and VC ecosystem, what has changed since 2009?
Kr: In 2009, there were only four of us. I think from then, to now, there are more than enough. There are so many great businesses now being set up by female founders. It’s just amazing. Being a great gender balancer, technology has freed us. I met a woman doing INR 2 crores of monthly run rate by taking her family’s jewelry business online. Her father didn’t want her to do this, so she set up her own startup, selling the imitation jewelry online that they do in gold offline.
One thing that hasn’t changed that I do hope changes is that women founders tend to be a lot more humble in their projections when they showcase their business. A guy will always show a mad scale, while a female founder will always show a more realistic scale. That is not necessarily a bad thing. But now that I sit on the side of the investor table, it seems like women are doubting their capability to scale. As an investor, you want to see the large-scale vision, you want to see a broader picture. I was guilty of this exact same thing.
Our fund is not going to fund every female entrepreneur. We will only fund the ones we believe in, and we believe those who have a deep belief in themselves.
AS: If you have to give one message to women entrepreneurs, what would that be?
Kr: I’ve seen so many women put their plans on the back burner because they feel their children come before them or that they have so many other things to take care of. If you don’t seize the opportunity now, someone else will take it. And it gets harder and harder, there is no better time, there is no easier time, there is no safer time than now. Once you make the jump, it all works out. Only certain entrepreneurs have the mindset that things will figure themselves out.
AS: A lot of women say that they don’t want to be called women founders, just founders. How do you look at that?
Kr: Many people asked me why I am building out this quota (funding) for women. But just because you didn’t face the bias, doesn’t mean it doesn’t exist. The fact of the matter is that female founders are not getting funded because of this bias. So there is clearly a need for it. No one wants to be known as a female founder. But for that to happen, things have to change. And that change won’t be overnight. Everything starts with a single move. To get to a certain scale, there are certain things that have to be done. I hope this fund can act as that change maker and bring a butterfly effect. By the time my daughters grow up, I don’t want this gap to be there.
This article is part of “Women in Tech,” a series by KrASIA that highlights the achievements of women who are a driving force behind Southeast and South Asia’s tech startups.