Amazon commits $150m to founders from “underrepresented backgrounds”


Amazon has revealed that its Amazon Catalytic Capital initiative will invest $150m in venture capital funds, accelerators and incubators that provide funding to entrepreneurs from underrepresented backgrounds.

The initiative will mainly invest at the pre-seed and seed stage of funding, in funds that focus on Black, Latino, Indigenous, women, and LGBTQIA+ founders. Amazon expects to support more than 10 funds and over 200 companies through the next year.

Thus far, Amazing has invested in several funds through the initiative. One of these includes Los Angeles-based Share Ventures, which invests in companies that “unlock human potential” in sectors such as FinTech, HealthTech and transportation. Another includes Techstars Rising Stars Fund which invests in underrepresented founders of colour in the US.

Historically, underrepresented founders have had less access to startup venture capital and greater difficulties in securing funding to bring ideas to fruition.

Studies consistently show that Black, Latino, women, and LGBTQIA+ startup founders are underrepresented across the total number of funded startups. According to PitchBook, women founders received 2% of US venture capital funding in 2021. Similarly, Black-founded and Latino-founded startups attracted only 1% and 2% of US venture capital funding respectively last year as reported by Crunchbase News.

Amazong said that research shows that these inequities create a negative ripple effect for underrepresented entrepreneurs, including reduced access to networks, mentors, and sponsors.

In addition to capital, the companies in the funds’ portfolios will receive mentorship from Amazon executives and gain access to resources to support their business and technical strategy. Amazon teams will also work with the startups to identify partnership and product collaboration opportunities that could accelerate their growth.

Peter Krawiec, Amazon’s senior vice president of worldwide corporate development, said, “We’ve seen incredibly innovative ideas from underrepresented entrepreneurs—from companies offering inclusive health services for women, to startups helping companies mitigate climate impact for underserved communities—and we’re convinced that an inclusive investment strategy leads to better returns and innovation. We want to ensure that these companies and their founders have the same access to capital as anyone else.

“We hope that our investment will be catalytic—sparking a force-multiplying effect by inspiring others to invest in these companies, fostering inclusion and innovation, positively impacting communities, and creating generational wealth and financial return.”

Anthemis Group is a prolific VC which promotes investing in diverse companies, with nearly one quarter of its portfolio comprising of companies founded by women. FinTech Global interview the VC earlier this year.

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