First Circle Capital's Approach to Driving Gender Equity - Dealflow Diversification and More

At First Circle, we are a thesis-led fund placing investments in six, carefully chosen,sub-segments of Fintech, which we believe represent the biggest opportunity for economic and impact returns in Africa: Insurtech, Alternative Lending Models, Interoperability & Infrastructure, Climate FinTech, Fintech SaaS and RegTech.

As a women-founded investment fund we also believe that we are well-placed to drive improvements in gender equity across the particularly male-dominated FinTech sector. Research has shown that women investors are two times as likely to invest in women founders. Today, 30% of our portfolio companieshave women founders & co-founders, a testament to our commitment to building gender equity in the African VC and Tech ecosystems. Moreover, we have made a formal commitment that 50% of our portfolio will satisfy at least one of the following criteria by Series A:

·       Women founder(s)

·       Have atleast 30% women in senior management and/or board

·       Have atleast 50% of women employees

These criteria are selected based on market data of the representation of women in African technology startups. For each of the thresholds selected, we have set targets which would place us well-above the average for the sector, demonstrating an ambitious and credible commitment to gender equity.

We do not invest in companies because they are founded by women. We chose to back the best teams that are deploying models in each of our target subsegments of Fintech, deploying a model that, we believe, is suitable in the African context.

How do we achieve these targets?

1.     Sourcing: we built a robust sourcing network enabling us to see 100+ deals per quarter. We make conscious effort to recruit female Venture Partners in each key market who forward us “under the radar” early-stage fintech deals. Furthermore, we recognize the importance of diversity in our pipeline and have recently begun tracking the proportion of female-led businesses. Over the last six months (from November 2023 to May 2024), we have found that 26% of our pipeline consists of ventures with a female co-founder, reinforcing our dedication to empowering and investing in women entrepreneurs.

2.     Promoting female-founders: we insist on press-release and strategic social media campaigns promoting female-led businesses in our portfolio, working to create role models for future diversification of our pipeline.

3.     Post-Investment Support: Often, we may be the only female investors on the cap table of a portfolio company. As a team of ex-entrepreneurs, we act as a strategic partner and fintech-savvy investor and often take board roles in portfolio companies. We focus our post-investment support around scaling strategy, business development, talent and help with follow on funding and working with founders to build gender diverse teams and serve a gender diverse set of customers over time.