SEATTLE--(BUSINESS WIRE)--Oct 5, 2022-- Amazon (NASDAQ: AMZN) today announced Amazon Catalytic Capital, a new initiative to invest $150 million in venture capital (VC) funds, accelerators, incubators, and venture studios that provide funding to entrepreneurs from underrepresented backgrounds, primarily at the pre-seed/seed stage of venture capital funding. The company will invest in funds that focus on Black, Latino, Indigenous, women, and LGBTQIA+ founders. Amazon expects to support more than 10 funds and over 200 companies through the next year.
“We’ve seen incredibly innovative ideas from underrepresented entrepreneurs—from companies offering inclusive health services for women, to startups helping companies mitigate climate impact for underserved communities—and we’re convinced that an inclusive investment strategy leads to better returns and innovation. We want to ensure that these companies and their founders have the same access to capital as anyone else,” said Peter Krawiec, Amazon’s senior vice president of worldwide corporate development. “We hope that our investment will be catalytic—sparking a force-multiplying effect by inspiring others to invest in these companies, fostering inclusion and innovation, positively impacting communities, and creating generational wealth and financial return.”
In addition to capital, the companies in the funds’ portfolios will receive mentorship from Amazon executives and gain access to resources to support their business and technical strategy. Amazon teams will also work with the startups to identify partnership and product collaboration opportunities that could accelerate their growth.
Historically, underrepresented founders have had less access to startup venture capital and greater difficulties in securing funding to bring ideas to fruition. Studies consistently show that Black, Latino, women, and LGBTQIA+ startup founders are underrepresented across the total number of funded startups. According to PitchBook, women founders received 2% of U.S. venture capital funding in 2021. Similarly, Black-founded and Latino-founded startups attracted only 1% and 2% of U.S. venture capital funding respectively last year as reported by Crunchbase News. Research shows that these inequities create a negative ripple effect for underrepresented entrepreneurs, including reduced access to networks, mentors, and sponsors. Despite these challenges, diverse and inclusive teams are 75% more likely to see ideas become products and 70% more likely to serve new categories.
Learn more about Amazon Catalytic Capital at amazoncatalyticcapital.com.