How Harbinger Ventures’ new $21.7M fund will promote women-owned brands

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Dive Brief:

  • Growth-equity investment firm Harbinger Ventures recently closed a $21.7 million second round of funding, bringing its total asset management to $27.8 million.
  • The fund, which launched in 2016, focuses on early-stage startups that are female-led, including Once Upon a Farm, 4th & Heart and Miss Jones Baking Co.
  • The venture firm has already completed three investments with the new fund and intends to close another two with the influx of capital.

Dive Insight:

A second funding round in three years with nearly universal repeat participation from first-round investors is a sign that Harbinger Ventures could be on to something with its investment strategy. Its latest funding also brought on several new investors and resulted in a nest egg that is nearly 12 times the amount of its first fund of $1.8 million in 2016.

It seems that Harbinger has a nose for early stage companies that will become successful. Both investors and Harbinger are interested in replicating the venture firm’s initial success investing early in brands like Once Upon a Farm, the fresh baby food company co-founded by John Foraker and actress Jennifer Garner, which has now raised more than $20 million in capital.

Another success story began in July when the firm invested in ghee startup 4th & Heart, leading a $7.6 million funding round. The amount of funding is well beyond what the company had previously received and enables the trendy startup to expand distribution and increase its innovation. 

What are Harbinger’s latest investments with the second round of funding? According to Nosh, the 4th & Heart investment was one of the three from its latest fund. The other two investments went to Vinebox, a monthly subscription service to wine, and a follow-up investment in personal care brand Cora.

With the newfound ability to write seven-digit checks, Harbinger is now able to invest in more established companies, which lessens risk but still promises a reward for both companies.

With plans for two more investments to use up the remainder of its fund, there is no question Harbinger will continue to pursue innovative, female-led companies. Women-led businesses are one of the fastest growing entrepreneurship segments, according to the U.S. Small Business Administration. These businesses also generate twice as much revenue per dollar compared to other businesses. Despite those glowing odds, according to Pitchbook, companies with female founders only got about 2% of venture capital funds in 2018. That means this Colorado-based fund likely has a large talent pool to choose from.

At the same time, other investors and accelerators are realizing the potential of female-led ventures and are beginning to look at them more closely. Food-X is leading the way for female companies with half of its most recent cohort being led by females. In Chobani’s spring incubator class, 63% of participating companies had female founders. PepsiCo’s Stacy’s Rise Project invests in women-owned businesses in the form of grants. Similarly, last year, Constellation Brands announced it would invest $100 million in female-founded alcoholic beverage companies by 2028 to boost support for women in a predominantly male industry. 

Women-led businesses may be on the cusp of having their investment heyday. Although there is still a long way to go, progress is evident. The Women’s Business Enterprise National Council and WEConnect International which launched the Women-Owned label in 2015 have seen participation increase significantly. In the U.S., more than 550 women-owned businesses used the logo as of January this year. That growth in self-labeling as a female shows that entrepreneurs are proud of their status and intent on displaying the benefits associated with being female-driven.

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