The Artemis Fundwhich invests in underrepresented founders, closed its second fund with capital commitments of $36 million.
Stephanie Campbell, Diana Murakhovskaya and Leslie Goldman Tepper founded Artemis in 2019, named after the Greek goddess of the hunt, wild things and champion of women.
Artemis, with offices in Houston and New York, leads diverse founders in fintech, commerce and care, having so far assembled a portfolio of more than 20 companies all led by female founders, with over 60 % have Black, Latino or immigrant leadership.
The second fund is backed by a group that includes Bank of America, Bank of Montreal, TIAA Nuveen’s Churchill Asset Management, Texas Capital Bank, Amazon, The Rockwell Fund and Ballentine Partners.
“We really wanted to make sure our LPs aligned with our long-term goal of supporting diverse founders,” Murakhovskaya told TechCrunch. “There’s a lot of pressure on it. We also want to grow with them.”
The company’s strategy is to “help move the funding needle for women and diverse founders by leading their rounds, supporting them, providing access to national co-investors and establishing discipline early to impact real revenue growth,” Campbell said.
“It’s good to have different perspectives and we felt there was money left on the table and we’re there to be the best at it,” he said. “We remain on course to align our impact with economic returns, not only for our LPs, but also for the communities from which these entrepreneurs come.”
More funds targeting women and underrepresented founders, from Artemis and others (for example, Amplifica Capital and Black Tech Nation Ventures, which recently raised a $50 million fund) are good. VC investment itself continues to be fairly stagnant in these sectors, according to my colleague Dominic-Madori Davis, who crunched the numbers on venture capital funding in these demographics earlier this month.
Funding to Black founders has declined since 2021, with Black founders in the US garnering 0.48% of all venture dollars allocated last year, which amounts to about $661 million out of $136 billion. Women have received 2% of total funding each year for the past two years.
There is, however, some hope, albeit in the form of a mixed bag. Female founders and co-founders secured more capital overall in 2023 than in 2020; according to new PitchBook research. Maybe it’s because more women are writing checks. PitchBook reported that at the general partner level, the share of female executives at the largest venture capital firms increased slightly to 17.4%. But at the same time, the number of female-led startups that secured funding dropped by 25%.
Artemis started investing from its first fund of $15 million in 2019. There have been no exits yet. Still, Campbell and Murakhovskaya say the portfolio is making progress. For example, 60% of Fund I companies have raised subsequent capital totaling $250 million. Among them, 70% came from Artemis imports.
While Artemis is far from the only fund focused on diverse founders, it is among the few that also funds technology to address the barriers facing neglected and underrepresented businesses, communities and families in the US, Campbell said. Fund I invested companies include senior home health company Naborforce, startup HopSkipDrive, Upgrade, a custom wig and extensions company, and corporate breastfeeding services startup Work & Mother.
Meanwhile, portfolio income from this fund increased four times between 2021 and 2022 and two times between 2022 and 2023. The total income of Fund I in 2023 was more than $100 million, they said.
For Fund II, Artemis intends to continue to lead and advocate on investments and will target approximately 20 new companies. Funds raised by this fund have already entered Payverse, an alternative payment processor. Max Retail, an online platform that helps retailers and brands sell their unsold merchandise. and online divorce platform Hello Divorce.
The firm will continue to invest in financially troubled Campbell and Murakhovskaya say other VCs are being written off too quickly.
“A lot of people don’t like to talk about uncomfortable things, even though they’re so prevalent in our lives,” Campbell said. “We really care about a lot of those underlying issues that affect a much larger population than people realize. Especially in the care industry, it’s these big, hairy problems that no one seems to like. Instead, we talk about how difficult they are and that there must be solutions to solve them.”
