Gender Lens Investing – Turning Intentions into Actions

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Since 2009, when the term “gender lens investing” made its entry into the investing lexicon, the space has progressed significantly.[1] Asset growth in gender lens investing has continued to accelerate and was estimated at $3.4 billion last year.[2]

At its essence, the thesis of gender lens investing (GLI) is that gender parity and equity are good for business. An enterprise operating on a gender equitable basis can build better products and services by taking advantage of diverse voices in the design and development phase. In turn, broadening the appeal of products and services can yield higher revenues. And finally, operating on a gender equitable basis can help alleviate socio-economic inequities in communities by providing employment opportunities at fair pay to women, who are generally underrepresented and underpaid. When women have opportunity, the impact on social, economic and wellness outcomes of the entire community are amplified. Studies state that increasing the employment of women could grow the global economy by $28 trillion — an amount equivalent to the combined gross domestic product of Japan, India, and the United States.[3],[4]

Gender equity and diversity have risen in priority in the development agenda over the past few decades. The recent growth of GLI funds shows that both institutional and individual investors are increasingly interested in this type of investing.[5] A big driver of this growth is the recognition that gender and diversity are crosscutting themes and issues that affect all other development outcomes and should be tracked accordingly.[6],[7]

Yet an enormous amount of work remains. At the current rate of progress, closing the economic gender gap across the world will take another two and a half centuries, according to the World Economic Forum.[8] And when it comes to venture capital, less than 3% of companies funded are women-founded.[9]

All of this is happening in the context of the COVID-19 pandemic, which threatens to derail the progress made on gender equity even further.[10] The need for investors to increase their commitment to applying a gender lens to their investing is even more urgent.

The journey of FHI Ventures in the GLI space, in many ways, reflects this urgency. It also highlights the value that venture capital investors based within and working closely with social sector organizations can bring to impact investing. Our experience over the past few years in gender and minority lens investing has resulted in significant lessons learned as well as opportunities to pivot out strategy.

Incorporating a gender lens at every stage of the investment process

Coming into the space as an impact investor with an accelerator program, the FHI Ventures team realized early on that gender and minority focus and outcomes needed to be amplified through our investments and work. In the first cohort of our accelerator program, fewer than half of the companies that applied were female-founded businesses. At the due diligence and final selection stage, there were some businesses that were cofounded by women and many minority-founded businesses, but the pool of potential investees did not have any solely female-founded businesses.

Due to this disparity, in the final selection phase, gender equity was carefully weighed and the investment team mapped out the gender-related considerations, including women leaders in the companies and product and service focus on serving women.

As the market began to produce more data on gender lens investing, we redoubled our efforts to implement a gender focus. Our investment team decided to apply a gender lens at every step, from deal sourcing to due diligence to final selection. In the second cohort of the accelerator program, we funded a majority of female-founded businesses and businesses with women in leadership at executive level, and we ensured that 50% or more of the employees being hired by these companies were women.

Leveraging the technical and on-ground expertise of a large international nongovernment organization

Since it was important that all companies selected by FHI Ventures had women in leadership and were committed to increasing the number of women employees, we realized the need to build the capacity of our accelerator cohort and investees to embed gender equity and inclusion within their companies.

We leveraged FHI 360 experts and collaborators to host workshops to help the companies understand how they can incorporate gender equality and social inclusion principles at different stages of the business and project development cycle. We were also able to share resources such as the Gender Equality and Social Inclusion Framework 2.0 developed by FHI 360 experts.

Moving beyond counting – data-driven, yet intentional and human-centered approach

Since the beginning, we have used existing resources, tools and frameworks in the GLI space to plan and measure the impact of our investments.[11] While the process of tracking impact is iterative and evolving, we have found it important to move beyond just counting numbers. Gender parity is critical but achieving gender equity involves a complex set of decisions and policies that companies need to undertake to create inclusive organizational cultures and workplaces.

For example, one of our investees Sanivation, recently embarked upon an elaborate exercise to analyze every aspect of its business through a gender equity lens. They made some surprising findings related to how gender-biased language came up in seemingly innocuous job descriptions with standard, cookie-cutter verbiage such as “being able to carry 50 pounds.” This led to broader conversations within the organization regarding how such statements are irrelevant and unrealistic to include in most job descriptions for nearly anyone working in the organization and not just women. But in many cases, including a sentence like that prominently in a job description might discourage women from applying to the position.

Stories like this underline the deep and hidden nature of gender-bias within companies. Surfacing it requires an intentional and systematic effort from the entrepreneurs. But investors can also play a critical role in nudging companies to embark on similar exercises to assess their business, supply chain and processes through a gender equity lens.

To stay intentional about our work, we decided to adopt specific goals that serve as touchstones in the due diligence process and post-investment support and engagement with our investees. These include increasing venture capital to women-led businesses, reducing gender inequities in supply chain, reducing gender inequities in workplace conditions, and improving health systems through gender-equitable policies and decision making.

Investors need to align their process to reduce the burden on entrepreneurs

We often hear from investors and entrepreneurs that equity and inclusion become a secondary focus because of the challenges of running a social impact startup. Furthermore, while companies have the intention to incorporate gender equity in their work, it can be hard for them to track the gender and minority-related data of their customer base. It requires an effort on their part to build out a metrics system to collect this type of data.

While working with companies to help them understand the usefulness of this data in assessing impact and growing revenue, investors can do something else to reduce the burden of measurement on the investees: they can align and co-create the metrics that they want to track. It is understandable that many investors track specific metrics to justify the thesis of their funds. But if we really care about the entrepreneurs and their vision, we as investors can do some extra work to help them focus on maximizing their impact. Meeting to discuss the metrics that we are tracking, trying to align them into as few data points as possible, or at least streamlining the collection and reporting of that data can go a long way towards reducing the workload on entrepreneurs. It also has the potential to lead to some unique synergies among investors that could result in future co-investments.

Greater impact requires significant pivots

Despite a number of Funds starting to focus on equity, diversity and inclusion, gender lens is still underfunded, and women are still underrepresented in raising and managing funds. In fact, the number of female fund managers has not only been stagnant for the past twenty years but has started falling in recent years.[12],[13]

In light of this, we have decided to launch a sector-agnostic fund with a thematic focus on women’s empowerment to support enterprises in Southeast Asia. The fund will invest in companies that are female founded, have a majority of women in leadership, and are ensuring that their products and services serve the needs of women and are accessible to them.

At the end of the day, more capital has been committed to gender and minority lens investing than deployed on the ground. Not enough investors are turning their intentions into serious action. Often investors providing follow-up capital to enterprises do not prioritize a gender lens. We need to change these dynamics. And most importantly, the purpose should move beyond simply counting the number of women to a comprehensive GLI approach that poses questions to help investees think about diversity, equity and inclusion in all aspects of the business, including supply chain, workplace culture, service and product design and access.



[2] Patricia Farrar-Rivas, Alison Pyott, “Gender Lens Investing: Assets Grow to More Than $34 Billion,” Veris Wealth Partners (blog), March 4, 2020.

[3] UN Women (web page), last updated July 2018. Available at:

[4]Gender Lens Investing: Impact Opportunities Through Gender Equity,” Equileap (report), 2018.

[5] Patricia Farrar-Rivas, Alison Pyott, “Gender Lens Investing: Assets Grow to More Than $34 Billion,” Veris Wealth Partners (blog), March 4, 2020.

[6] Wendy Cukier, “Gender And Diversity As Cross Cutting Themes,” Atlas of Social Innovation

[7]Achieve Gender Equity to Deliver the SDGs,” SDG Knowledge Hub/IISD (policy brief), July 6, 2020.

[8]Closing the Gender Gap Accelerators,” World Economic Forum

[9] Amanda Pressner Kreuser, “2 Reasons Women Still Get Less Than 3 Percent of VC Funding,” Inc., February 20, 2020.

[10]COVID-19 and Ending Violence Against Women and Girls,” UN Women (brief), June 30, 2020.

[11]Some useful resources include Gender Smart Investing and the 2X initiative. We also found it helpful to implement a two-fold approach towards measurement — utilizing the IFC Gender Scorecard to track portfolio level performance and the GIIN IRIS+ metrics to track investee performance.

[12] Bernice Napach, “Gender Gap Among Fund Managers Hasn’t Changed in 20 Years,” ThinkAdvisor (blog), March 2, 2020.

[13] Reshma Kapadia, “The Number of Women Fund Managers is Dropping and No One Knows Why,” Financial News London (blog), March 3, 2020.

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