Amazon to Invest $150 Million in Funds That Provide Underrepresented Entrepreneurs with Access to Capital
October 05 2022 - 7:20AM
Business Wire
In addition to providing capital, the new
Amazon Catalytic Capital initiative will also offer mentorship and
business opportunities to startups led by Black, Latino,
Indigenous, women, and LGBTQIA+ founders
Initial fund investments include Collide
Capital, Elevate Future Fund, Share Ventures, and TechStars Rising
Stars
Amazon (NASDAQ: AMZN) today announced Amazon Catalytic Capital,
a new initiative to invest $150 million in venture capital (VC)
funds, accelerators, incubators, and venture studios that provide
funding to entrepreneurs from underrepresented backgrounds,
primarily at the pre-seed/seed stage of venture capital funding.
The company will invest 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.
“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,” said Peter Krawiec, Amazon’s
senior vice president of worldwide corporate development. “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.”
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.
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 U.S. venture
capital funding in 2021. Similarly, Black-founded and
Latino-founded startups attracted only 1% and 2% of U.S. venture
capital funding respectively last year as reported by Crunchbase
News. Research shows that these inequities create a negative ripple
effect for underrepresented entrepreneurs, including reduced access
to networks, mentors, and sponsors. Despite these challenges,
diverse and inclusive teams are 75% more likely to see ideas become
products and 70% more likely to serve new categories.
Through this initiative, Amazon has invested in the following
funds:
- Collide Capital — Collide Capital is a Black-owned seed and
pre-seed venture capital fund led by two founders under the age of
35: Aaron Samuels, who co-founded AfroTech, and Brian Hollins, who
is a founding Board Member of BLCK VC. To date, Collide Capital has
backed over 40 companies, of which 80%+ are led by Black, Latino,
and/or female founders.
- Elevate Future Fund — Elevate Future Fund, which is overseen by
Energy Impact Partners (EIP), focuses on increasing funding to
underrepresented founders working on solutions to accelerate the
transition to a more sustainable and clean energy future. It will
also make investments in companies that are led by underrepresented
entrepreneurs, are empowering diverse talent, and/or are creating
economic opportunity for distressed or disadvantaged communities.
Elevate will also collaborate closely with Amazon’s Climate Pledge
Fund, which invests in emerging climate technology companies.
- Share Ventures — Share Ventures is a Los Angeles-based venture
fund and venture foundry focused on human performance. Share
focuses on solving problems by creating and investing in innovative
companies that unlock human potential, in categories including
health tech, future of work, people tech, fintech, transportation,
and purpose tech (companies facilitating impact and change).
- Techstars Rising Stars Fund — With its first investments in
2022, the Rising Stars Fund is a pre-seed venture capital fund
investing in underrepresented founders of color in the U.S. The
fund is part of the Techstars investment business that provides
access to capital, one-on-one mentorship, and customized
programming for early-stage entrepreneurs.
Investors from the VC funds supported by Amazon have supported
hundreds of underrepresented startup founders. With Amazon’s
investments, these VC funds expect to back hundreds more companies
and, in turn, help create more jobs and unlock economic growth in
historically underserved communities.
“We are focused on addressing financial inclusion across the
globe, and Collide Capital has been an investor in us from the
early days. Collide has helped us to shape our vision and opened up
access to future rounds of funding,” said the founder and CEO of
fintech startup EMTECH, Carmelle Cadet. “EMTECH discovered a unique
value proposition in rebuilding central banking infrastructure for
the Web3 era. As a Black woman-founded tech company, having Collide
getting excited about our vision was critical to our journey. We
are better with them as partners, and I am excited to see how
Amazon is supporting them to help even more entrepreneurs like
me.”
“Our collaboration with the team at Amazon was born out of our
shared passion for innovation in key areas that improve the human
experience at scale. We are aligned with Amazon’s customer
obsession and grateful to be learning and collaborating with them
to build a portfolio of game changing companies,” said Hamet Watt,
managing partner at Share Ventures.
Amazon Catalytic Capital is the latest in a series of
Amazon-sponsored initiatives to boost and support early stage,
underrepresented entrepreneurs. Amazon Web Services recently
launched the AWS Impact Accelerator, investing $30 million in a
series of programs designed to help high-potential, pre-seed
startups led by underrepresented founders succeed. Amazon chose
North American startups to be part of its 2022 Black Founders Build
with Alexa cohort, each receiving a $100,000 Alexa Fund investment,
as well as technology support. Additionally, in 2021, Amazon
committed $150 million to its Black Business Accelerator, an
initiative to help Black business owners succeed as sellers in
Amazon’s stores.
Learn more about Amazon Catalytic Capital at
amazoncatalyticcapital.com. Funds interested in receiving
investment from Amazon can contact Amazon here.
About Amazon
Amazon is guided by four principles: customer obsession rather
than competitor focus, passion for invention, commitment to
operational excellence, and long-term thinking. Amazon strives to
be Earth’s Most Customer-Centric Company, Earth’s Best Employer,
and Earth’s Safest Place to Work. Customer reviews, 1-Click
shopping, personalized recommendations, Prime, Fulfillment by
Amazon, AWS, Kindle Direct Publishing, Kindle, Career Choice, Fire
tablets, Fire TV, Amazon Echo, Alexa, Just Walk Out technology,
Amazon Studios, and The Climate Pledge are some of the things
pioneered by Amazon. For more information, visit amazon.com/about
and follow @AmazonNews.
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