Levelling the fintech funding field

The Female Innovators Lab, a platform dedicated to boosting female fintech entrepreneurs, has just celebrated its first birthday. Barclays’ Mariquit Corcoran and Katie Palencsar from Anthemis reflect on how the bank and the venture capital firm partnered to set up the programme – and what it’s achieved so far.

“Fintech combines two traditionally male-dominated industries – finance and technology – so in some ways it’s not surprising that the number of female-founded companies we were seeing coming through pipelines was small.”

So says Katie Palencsar, Venture Studio Lead at fintech investment firm Anthemis, who describes herself as “a lifelong advocate for investing in female founders”.

An entrepreneur herself, Palencsar understands first-hand the challenges that female founders face when building their businesses. “Capital allocation is the first building block to tackling the problem,” she says. “Female founders need the same strong networks that their male counterparts have, as well as the essential infrastructure of support needed to scale.”

To get this right, she says, “we needed great strategic partners that completely understand the industry. And in finance, that was Barclays. Even outside of this project, there’s an existing commitment to early stage businesses through Rise and Eagle Labs. It really is a perfect match.” 

The result was the Female Innovators Lab, a New York-based studio run in partnership by Barclays and Anthemis, which looks to provide dedicated support and capital investment to female-led fintech companies at the ‘idea stage’. “It’s a deliberate effort to level the playing field and ensure that support goes beyond investing capital,” Palencsar explains.

The programme has just enjoyed its first anniversary ­– but when it started, nobody could have predicted the year it had ahead.

In the pipeline

In 2019, only 3% of global venture capital funding went to female-founded startups, compared to 10% delivered to male and female co-founded companies, and 87% to male-founded businesses. “Many say that female funding is a pipeline problem,” says Palencsar, “but that’s not necessarily all it is. There are more and more companies out there and we believe that the network effect of the Lab will be significant in expanding capital and creating more opportunities, more jobs.”

One Lab company who has benefitted from contacts and investment is Nivelo, an ACH (automated clearing house – the US equivalent of BACS) risk assessment service, that in August closed a $2.5m funding round with Barclays, Anthemis and early stage venture capital firm FirstMark.

“Support from the Female Innovators Lab has been immensely helpful in getting Nivelo one step closer to protecting the digital payment ecosystem from cyber threats,” says its Founder and CEO, Eli Polanco. “It’s all about fairness and equal access. No one should have a higher bar to entry, it’s anti-competitive and leads to lower quality products for society.”

“It has been the most valuable partnership that I've ever had,” adds Founder Kaeya Majmundar, whose business, Swaypay allows shoppers to earn discounts at online stores through social media posts. “I forget, quite frankly, that the folks at the Lab are not my co-founders. It has been amazing to be able to tap into a huge system of resources. I feel a lot less like a solo scrappy founder and more like part of a massive team.”

Mariquit Corcoran, Barclays Group Chief Innovation Officer and Executive Sponsor of the Female Innovators Lab, hopes many more stories like this are on the way: “We don’t generally get, at later stages, equal gender representation in applicants for funding, so we wanted to take it a step back and help create a pipeline. We can take our networks and our collective knowledge, not just to bring funding to entrepreneurs, but also really help them through their journey to take their concepts to market.

“We want to achieve a more level playing field. We can’t do that alone, but we want to do what we can to drive better diversity and get more female-founded businesses to market. Study after study shows that businesses with at least one female founder consistently return more revenue per dollar invested than those with all-male founders.”

Beyond the Lab’s first birthday

Corcoran says she’s “proud of getting the number of applications we’ve had; given the sort of year it’s been” – but admits to worrying about the pressures female founders have faced during the pandemic.

“There’s been a lot of talk about women being the ones who are struggling most because they’ve had to take on more roles in the home,” she explains. “I’m hoping that it does not impact the women who are out there trying to build their companies and that it doesn’t dissuade them from progressing. I think in the future there will be a lot more flexibility in how founders operate, build and run their companies.”

The Lab has pivoted through COVID-19 to provide time, knowledge and connections to companies virtually. “We’ve helped them continue to grow, develop their teams and adapt,” says Corcoran. “Our applications have stayed steady or even increased, because the need for investment and development is still there.”

“Running a startup can be hard,” adds Palencsar. “Does what you’re working on keep you up at night? That relentless approach to solving the industry’s biggest challenges is what will get you through difficult times.”

Corcoran encourages any prospective applicants to find out more about the Lab: “Don’t hesitate to get in touch. If you’re not sure if you’re ready or your solution is good enough yet, it’s worth talking to us about it, and we can help you review your ideas. There’s no hurt in trying and seeing where you go from there.

“We’ve accomplished a ton and made a difference in the market,” she says. “We’re looking to further our impact and bring more diversity of thought to the industry by continuing to make investments that bridge the gender funding gap.”