Artemis Fund has a fresh $36 million to back diverse founders solving ‘big, hairy problems’

The Artemis Fund, which invests in underrepresented founders, closed on its second fund with $36 million in capital commitments.

Stephanie Campbell, Diana Murakhovskaya and Leslie Goldman Tepper founded Artemis in 2019, naming the firm after the Greek goddess of the hunt, wild things and a champion of women.

Artemis, with offices in Houston and New York, leads seed rounds for diverse founders in fintech, commerce and care, having so far composed a portfolio of more than 20 companies that are all led by female founders, with over 60% that have Black, Latinx 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 that our LPs aligned with our long-term goal of backing diverse founders,” Murakhovskaya told TechCrunch. “There’s a lot of pressure on that. We also want to grow with them.”

The firm’s strategy is to “help move the funding needle for female and diverse founders by leading their rounds, advocating for them, providing access to national co-investors and instituting discipline early to hit real revenue growth,” Campbell said.

“It’s good business to have diverse perspectives, and we felt that there was money being left on the table, and we’re there to be the best at it,” she said. “We’re staying the course so we align the impact that we’re making with financial returns, not only for our LPs, but also for the communities that these entrepreneurs come from.”

More capital targeting female and underrepresented founders, from Artemis and others (for example, Amplifica Capital and Black Tech Nation Ventures, which recently raised a $50 million fund) is good. VC investment itself continues to be fairly stagnant in these areas, according to my colleague Dominic-Madori Davis, who crunched the numbers on venture capital funding to these demographics earlier this month.

Funding to Black founders has declined since 2021, with Black founders in the U.S. raising 0.48% of all venture dollars allocated last year, which comes out to about $661 million out of $136 billion. Women received 2% of the total funding each year for the past two years.

There is some hope, though, albeit in the form of a mixed bag. Female founders and co-founders secured more capital overall in 2023 than they did in 2020, according to new PitchBook research. Perhaps it’s because more women are writing checks. PitchBook reported that at the general partner level, the share of female check-writers at the largest venture capital firms grew slightly to 17.4%. At the same time, though, the number of female-led startups that secured funding fell by 25%.

Artemis began investing from its first fund of $15 million in 2019. There have not been any exits yet; however, Campbell and Murakhovskaya say the portfolio is making progress. For example, 60% of the companies in Fund I have raised follow-on capital totaling $250 million. Among those, 70% came from Artemis introductions.

While Artemis is far from the only fund that focuses on diverse founders, it is among the few that also funds tech to address barriers faced by overlooked and underrepresented businesses, communities and families in the U.S., Campbell said. Companies invested from the Fund I include senior home health company Naborforce, rideshare startup HopSkipDrive, Upgrade, a custom wig and extensions company, and corporate lactation room services startup Work & Mother.

Meanwhile, portfolio revenue from that fund increased four times between 2021 to 2022 and two times between from 2022 to 2023. Total Fund I revenue in 2023 was over $100 million, they said.

For Fund II, Artemis intends to continue leading and co-leading investments and will target around 20 new companies. Funds deployed from this fund have already gone into Payverse, an alternative payments 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 economic problems Campbell and Murakhovskaya say other VCs write 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 bigger population than people realize. Especially in the care industry, it is these big, hairy problems that no one seems to like. Instead we talk about how difficult they are and that there ought to be solutions to solve them.”


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