Rhian Horgan pitched countless accelerators on what would become Kindur, a fin tech startup that helps baby boomers plan for retirement. She got rejected from all of them.
“I did not have the profile that a lot of accelerators were looking for, quite frankly,” Horgan says. “I was almost 40. I was a sole founder. I had worked for one company for my whole career. And I wasn’t willing to move—I have two young children, so going out west for three months just wasn’t a reality for me.”
Horgan knew her idea was a harder sell, too. “I was solving a problem for quote-unquote old people,” she says. “Most people I spoke to didn’t even understand the problem.” But in 2017, Horgan found a receptive ear in Anthemis, an early-stage fintech investment firm. By then, Anthemis had introduced a studio model, which empowered the firm to invest in founders even earlier, sometimes building a company around an appealing founder.
Now Anthemis has teamed up with bank and financial services company Barclays to double down on the studio model. The result of their partnership is the Female Innovators Lab, a New York-based startup studio for female founders in the fintech space, which launches today.
The lab will make an initial pre-seed investment in each founder, though the amount will vary depending on the person and business; portfolio companies would also be considered for subsequent rounds of funding. (Anthemis would not disclose how much Barclays will be investing in the fund.)
Katie Palencsar, the founder and CEO of edtech startup Unbound Concepts, will lead the lab with the help of mentors from Anthemis and Barclays. The founders who make the cut will initially work out of Anthemis’s studio space. Once they have a clearer roadmap for their product and move to the seed stage, Barclays will host the companies at its coworking space, Rise.
Amy Nauiokas, a Barclays alum herself, started Anthemis with her cofounder Sean Park in 2010. The firm has since clinched more than 90 investments—backing startups like robo-advisor Betterment and online bank Simple—and manages upward of $380 million in assets. When Nauiokas and Park founded Anthemis nearly 10 years ago, they sought to evolve not only the scope of the financial services industry but also its demographics.
A much-cited statistic indicates that women still receive a sliver of venture capital funding: In 2017, female founders raised just $1.9 billion, barely 2% of the $85 billion VC dollars raised on the whole. “We wanted to do things differently,” Nauiokas says. “We would put diversity and inclusion at the top of our priority list in everything we did.”
That proved harder than Nauiokas had anticipated. Of the 80 portfolio companies that are up and running, just 13 have female founders (a tally that includes Horgan and Backstage Capital’s Arlan Hamilton). “Even with diversity at the core of our existence, we could not make enough progress,” Nauiokas says. “When you’re actually trying to find companies founded by women and people of color and you can’t [find it] in a certain sector, then there has to be an institutional, seismic problem at the systemic level. So our thought was: Let’s get in at the very beginning.”
With the Female Innovators Lab, Nauiokas hopes to shepherd more companies like Kindur from inception through execution, with female founders like Horgan at the helm, to “drive the pipeline.” The studio will primarily back individual founders, Nauiokas says, and in some cases, match those founders with cofounders to help build a diversified team within each startup.
When Horgan broached Anthemis, she was more motivated by human capital–access to people who could round out her expertise. “I had enough cash to be able to fund the business myself and bootstrap it,” Horgan says. The real draw was that Anthemis could be a true collaborator, particularly in areas Horgan wasn’t well-versed in, such as user research and human-centered design. “It became really clear that within their venture studio, they had people who would really be a nice complement,” she says. “I could bring the financial background to the table, and they could bring that user-centric model to building a business.”
Nauiokas sees a solo founder like Horgan—whose company went on to raise a $10 million series A—as something of an archetype for the founders she wants to attract. “We imagine the majority of the folks that come through the startup studio will be single founders, and as such, will all be women,” she says. “As far as I’m concerned, we need to make sure that every company we help create, every company we fund, and every business we build becomes in itself a kind of petri dish for diversity and inclusion.” (Kindur’s leadership and engineering teams are both 50% female.)
As a startup studio specializing in fintech, the Female Innovators Lab is also well-equipped to address challenges specific to the industry. For Horgan, one of the biggest benefits of working with Anthemis was that the firm understood the regulatory hurdles in the financial services sector—in her case, that meant prioritizing a general counsel hire. Horgan also didn’t feel pressured to build her business at the same pace as she might have elsewhere.
“If you look at the accelerator model today, there’s this expectation that you can build your business in 10-12 weeks,” she says. That may have been impossible for a fintech startup like Kindur, Horgan says. “The regulators were in our office before we even went live,” she says. “My fourth hire was a general counsel, and we’re regulated in every state. You just can’t get that done in 10 weeks.”
If the studio model can stretch to accommodate a variety of product development cycles, the same elasticity can be applied to how the lab invests in founders. For Nauiokas, that was part of the appeal of creating a startup studio. “We’d look at times at diverse leaders whose companies just didn’t seem to make us immediately need or want to invest,” she says. “But the talent itself was fantastic, and we kept thinking, ‘What if we could take this person and start over?'”
As in other sectors, the issue isn’t a dearth of talent. Nauiokas knows from personal experience that women who work in financial services can hit a wall as they climb the corporate ladder angling for senior roles. “There just aren’t enough opportunities to continue down that path,” she says. “That sort of becomes a natural jumping off path for a lot of women.” And contrary to popular belief, they’re not necessarily leaving jobs at corporate banks to get married and have babies. “The reality is we’re losing these women to other ventures, many of which are outside the industry, because they just get so frustrated,” she says. “And I feel like that type of individual, in particular, is a great target for us.”
At the Female Innovators Lab, those budding founders could get the green light with or without a viable business idea. Nauiokas thinks—hopes—this can pave the way for a more inclusive ecosystem of startups. “If we get it right,” she says, “it could be one area where maybe financial services will be a leader, rather than a follower.”
Correction: A previous version of this story misspelled the name of Katie Palencsar. It also misstated the series A funding raised by Kindur and the lab’s initial financial investment.