Gender Lens Investing – perspectives from DGGF portfolio organizations

For DGGF – Financing local SMEs (DGGF), gender lens investing is a key strategic pillar for achieving sustainable development and economic empowerment in emerging markets. DGGF investees like Salkantay Ventures, Gazelle Finance, Insitor Partners and Zoscales Partners, are at the forefront of this development, each integrating gender equality into their operations for various key reasons. As this March marks the Women’s Month 2024 of DGGF, we asked these organizations to share something about their current gender lens investing pursuits and prospects. It led to enthusiastic responses, that we are happy to share.

Image: ©Contxto

Salkantay: "Foster a more inclusive and equal ecosystem in the region through our investment and value-add initiatives"

Salkantay Ventures, DGGF investee since 2022, has a clear understanding that diversity within companies leads to better results and overall performance. The firm is actively pursuing the integration of gender diversity as a key component of its investment strategy, acknowledging that "it represents a huge opportunity for investors to increase their value-add initiatives." Salkantay's commitment to this approach is evident as they aim to build a more equitable industry, starting with their own team composition and extending to the businesses they invest in.

Recently, Salkantay completed a project with Value for Women and Tetra Tech, funded by DGGF, to incorporate a gender lens into their investment process. This initiative has led to a comprehensive review and enhancement of their strategies, from sourcing to deal structuring, ensuring a reduction of unconscious biases and promoting gender-forward practices within portfolio companies. The early impact of these efforts is promising. Currently, approximately "40% of our portfolio companies having at least one female cofounder" and more than "37% have top management teams with at least 30% female representation."

Looking forward, Salkantay is not only focused on narrowing the funding gap for female-led startups but is also determined to be a catalyst for systemic change in the region. With ambitions to foster a more inclusive ecosystem, Salkantay envisions becoming a benchmark for gender lens investing in the Andean region. Their proactive stance and initiatives are a testament to their belief that "more diverse teams in our portfolio companies will lead to better results," thereby enhancing their net asset value and contributing to a more just and diverse economic landscape.

Image: ©Gazelle Finance

Gazelle Finance: "Investing in companies with diverse leadership and inclusive practices not only enhances the sustainability of our portfolio but also advances women's economic empowerment, creating long-term value"

Gazelle Finance, a pioneering investor in Georgia and Armenia, is dedicated to advancing women's economic empowerment through gender lens investing. The fund strategically supports businesses that prioritize gender diversity and "create opportunities for women in the workforce", thereby fostering women's economic empowerment in the region. Gazelle's approach aims to "catalyze broader changes in the investment landscape" by promoting sustainable practices that contribute to long-term value.

With assistance from DGGF, Gazelle has developed a robust gender lens investing strategy, which includes gender-inclusive recruitment policies and a gender and social impact strategy. They actively engage in workshops and support portfolio companies with gender lens self-assessment, highlighting their commitment to gender-inclusive business practices. Gazelle's Women in Business and Leadership Conference further underscores their efforts to dismantle gender-based barriers and enhance access to financing for women entrepreneurs. The fund proudly showcases a significant female representation in its management with a 66% share of women in senior management and a 50% share of women partners. Furthermore, 27% of the companies in their portfolio currently being women-owned or led.

As Gazelle is currently in the fundraising process of Gazelle Fund II, they aim to maintain a strong gender balance. Hence, Gazelle will explicitly incorporate gender equity into their investment strategies, promoting a gender-balanced hiring process, unconscious bias training, and gender pay gap analysis. They are also committed to supporting women-led businesses and ensuring workplace equity. By assisting portfolio companies in implementing gender-smart practices and tracking performance outcomes, Gazelle holds itself accountable for embedding gender equity into its investment philosophy.

Image: ©Insitor

Insitor: "Embedding gender a priority in all aspects of our operations"

Insitor Impact Asia Fund II (Insitor) is part of the DGGF portfolio since 2021 and have been recognized with the prestigious title of the first 2X Flagship Pioneer Fund in Asia. "Gender has figured prominently in both our internal operations as well as our investing strategy," Insitor responed, showcasing a profound dedication to gender equality. With a systematic approach to embedding gender considerations, Insitor carefully analyzes and optimizes gender impact throughout its investment process. This dedication is reflected in their alignment with the 2X criteria, boasting impressive statistics such as 50% women in senior management roles and 53% of women in the workforce. Additionally, a significant 67% of investments in their current fund are 2X aligned.

Insitor's gender approach has also opened doors for fundraising, grant support, and research contributions, enhancing the role of gender-related activities in the investment sector. Looking ahead, Insitor plans to ensure that technical assistance projects maintain a gender focus. "For this, we have worked closely with Value For Women and Tetra Tech, a DGGF-sponsored program that has reviewed a number of our TA applications and provided further TA-focused gender training for our investment team."

Image: ©Zoscales Partners

Zoscales: "We are committed to accelerating progress towards this goal, as it is a critical yet direct and straight forward means of fostering sustainable development within the region"

Zoscales Partners, a DGGF investee since 2017, recognizes gender lens investing as "a critical yet direct and straightforward means of fostering sustainable development within the region." Zoscales has committed to aligning its investments with firms that support Sustainable Development Goal 5, emphasizing gender equality. They have made significant progress by implementing comprehensive policies on harassment, maternity leave, and other gender lens investing topics, both internally and across their portfolio companies.

These initiatives have already borne fruit, as Zoscales reports that their entire portfolio is now 2X compliant, a significant milestone in gender lens investing. Looking ahead, Zoscales has ambitious plans to further entrench gender equality in their investment approach. They aim to ensure that their "future investments will be strategically directed towards companies whose products or services significantly enhance the livelihoods of women." This approach positions Zoscales as a regional leader in gender lens investing.

Concluding thoughts

DGGF seeks to promote inclusive economic development and contribute to the reduction of gender disparities. We are pleased that our investees are actively working on gender lens investing while generating positive financial returns. By providing capital and technical assistance to female-led or female-involved SMEs, our investees empower women and stimulate economic activity and job creation.