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Intel Begins $125M Diversity Investment Fund

Mark One team

Mark One team (MyVessyl.com)

10 June 2015. The venture capital division of semiconductor manufacturer Intel unveiled a fund to invest in technology start-ups founded by women and under-represented minorities. Intel Capital announced as well the first four investments from its Capital Diversity Fund, which expects to distribute some $125 million over the next 5 years.

Intel cited data showing the need for this kind of fund. A study by Babson College published last year shows as of 2011 to 2013, about 15 percent of businesses receiving venture capital investments had a woman executive. While that number represents an improvement over the 5 percent found in a similar survey in 1999, it is still far less than the 36 percent of American businesses with women as majority owners.

The CB Insights data, from 2010, show only 1 percent of start-up founders are African-American, with 87 percent white and 12 percent of Asian-Pacific heritage. Also in 2010, start-up companies founded by people of Asian-Pacific heritage attracted an average of $4 million in seed and first-round venture funding, compared to $2.3 or $2.2 million for businesses founded by white entrepreneurs or those of different ethnic backgrounds, and $1.3 million for enterprises started by African-Americans.

“Our goal with this new fund,” says Intel CEO Brian Krzanich in a company statement, “is to meaningfully support a technology start-up workforce more reflective of society, and ultimately to benefit Intel and the broader economy through its success.” The fund is an add-on to a $300 million initiative announced in January to increase Intel’s hiring of women and under-represented minorities, and support educational and employment opportunities for women and minorities across the IT industry.

The Capital Diversity Fund plans to support new companies where either the founder or at least 3 members of their executive teams are women or under-represented minorities: African-Americans, Hispanics, and Native Americans. While the first recipients are high-growth start-ups in the U.S., the fund expects to finance companies worldwide. The project is headed by Lisa Lambert, who directs Intel Capital’s investments in software and services, and is considered an expert on diversity in technology industries.

The first four investments from the fund are:

CareCloud, in Miami, a cloud-based open platform that links health care providers with patients, incorporating electronic health records, analytics, and medical billing software and services for medical groups.

Venafi, in Salt Lake City, offering a service that protects IT security keys and certificates, by assessing keys and certificates to be trusted, protecting those that should be trusted, and fixing or blocking those that are not.

Mark One, in San Francisco, a developer of the Vessyl, a beverage cup with built-in sensors and electronics (including those made by Intel) that recognizes and analyzes its contents and reports the results on the user’s smartphone.

Brit + Co, also in San Francisco,  an online media and e-commerce platform offering tools to teach, inspire, and enable creativity among women and girls.

While individual investments in these companies were not disclosed, Intel says the fund expects to disperse about 1/5th of the total $125 million each of the 5 years.

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Hat tip: Fortune

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