Gender-lens or gender-smart investing refers to investments that achieve greater social and financial return on investment by focusing on businesses that are owned or led by women, have good gender balance, and/or serve women customers with their products and services. Given this double benefit, gender-lens investing is rapidly gaining momentum globally, with volumes of capital raised across private equity, venture capital, and private debt vehicles growing from $1.1 billion in 2017 to $4.8 billion in 2019. This includes various funds that are specifically looking to invest in women-led start-ups.

However, few Indian investors are proactively considering gender as part of their investment thesis. FSG’s recent in-depth conversations with more than 20 leading impact investors in India revealed that while many expressed interest in the theme of gender-lens investing, few of them actively incorporated gender into their investment strategies and processes. Of the funds we spoke to, only three commercial funds had an explicit focus on serving women entrepreneurs, and no funds focused on women-owned businesses or had a gender-based investment focus.

For most impact investors in India, it became clear through our conversations that outcomes related to gender are incidental rather than actively pursued. As a result, they are missing an opportunity to increase their returns by deepening the social impact they create for women.

Impact investors in India can unlock significant social and financial value by investing in women

Read the full article about investing in women by Sujata Rathi, Flynn Lebus, and Laura Amaya at FSG.