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Illumina Capital is doubling down on its support for fund managers and founders from underrepresented communities.
The company is an impact fund of funds that have previously supported ways to address racial bias in investing. Yesterday, the firm, founded by Darren Dodson, announced the raising of a $32.75 million Catalyst Fund to once again support emerging fund managers and founders, especially those from underrepresented backgrounds.
This news comes during a difficult time for many fund managers and diverse founders, who are seeing less financial support than in previous years. Black founders raised less than 1% of venture capital funding last year, According to Crunchbase, As of the first half, the company was on track to continue seeing funding declines.
Speaking to TechCrunch, Dodson said: “During periods of economic uncertainty, political polarization and fears of persistent inflation, we have seen an increase in biases,” Dodson told TechCrunch, adding that these biases also appear in the venture space, where billions in capital remain… You go to the same people.
When asked about the fundraising, Dodson said the firm was fortunate enough to have “deep, established relationships,” with a limited number of partners “committed to supporting the next generation of venture capital and private equity managers.”
She added that the company has approximately $285 million in assets under management. It last raised a $168 million fund in 2023 Also address race and gender Investment bias.
Dodson said that the Catalyst Fund represents a complementary strategy to the first two funds. “While our first fund and second fund focused on more established managers, the Catalyst fund prioritizes first-time managers and early-stage founders,” he continued. “It was an intentionally smaller vehicle, and we were fortunate that two of our major investors from our second fund — the Ford Foundation and the Health Forward Foundation — backed this latest fund.”
The fund hopes to invest at least 65% of capital in first-time venture managers and up to 35% of capital as direct co-investments in companies acquired through any of its active funds. “At least 90% of the fund is likely to be focused locally,” Dodson continued. “And up to 20% in emerging markets.”
He said the fund would broadly look at managers working in the areas of education, health and wellness, financial inclusion, climate and sustainability.
Dodson hopes to deploy the fund within the next year and a half. “We see our stimulus fund as exploiting market inefficiency,” he said. “With the Catalyst Fund, we hope to demonstrate the intrinsic value of supporting funds with diverse leadership, and identifying the best in the next generation of project managers.”
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