Why Serena Williams’ VC Firm Is Backing This Canadian Start-Up
Tennis star Serena Williams may be stepping off the court, but she isn’t done working. She’s doubling down on helping women- and BIPOC-led businesses raise capital through her VC firm—including a Canadian fashion software start-up.
In a recent Vogue essay, the 23-time Grand Slam champion revealed that she would be retiring from tennis to focus on motherhood and her VC firm, Serena Ventures. Williams started her women-led firm in 2014 to primarily back diverse and early-stage tech founders: About 78 per cent of Serena Ventures’ portfolio is companies started by women and people of colour—something Williams is intentional about after learning that just two per cent of VC dollars go to women.
One of those companies is Calico. This March, Serena Ventures led the $2.6-million seed round for Toronto-based start-up, which was founded by Kathleen Chan in 2020. Calico helps e-commerce brands, especially smaller fashion and accessories companies, manage their supply chain to get their products to market as quickly as possible.
“I have experienced the exact problem Calico is solving and have rarely come across a business as in tune with the industry’s challenges and limitations as Calico,” Williams, who has her own fashion brand, S by Serena, said in a press release. “It’s a category-defining product that will have an outsized impact on retail and there couldn’t be a more critical time to help them succeed.”
Serena Ventures recently raised US$111 million of outside financing from banks, private individuals and family offices, and has a portfolio of 60 companies including online education platform MasterClass, inclusive intimates brand Nude Barre, meat substitute brand Impossible Foods and wig customization platform Parfait.
“There’s such a chronic level of undercapitalization for businesses owned and led by women, by racialized people and by Indigenous people,” says Christie Stephenson, executive director of the Peter P. Dhillon Centre for Business Ethics at the Sauder School of Business. Even though total VC funding hit record levels in 2021, funding for women-led companies dropped to its lowest level since 2016. Funding for start-ups founded by Black entrepreneurs also fell last year. “These celebrity investors can leverage the power of both their money and their profile to make a difference in the business community and who has access to financing,” Stephenson says.
Williams is hardly the only celebrity or athlete who has invested in Canadian companies as of late. This March, Canadian actor Nina Dobrev and singer Shawn Mendes invested an undisclosed amount in Vancouver-based candy company SmartSweets. In March 2021, basketball stars Kyle Lowry and Kevin Durant participated in Vancouver-based blockchain start-up Dapper Labs’ $305-million financing round. Last year rapper Drake and actor Ryan Reynolds also joined a star-studded list of more than 10 venture capital firms and celebs to fund Canadian fintech Wealthsimple’s $750-million round. (Wealthsimple’s raise, which pushed it to a $5-billion valuation, was one of 2021’s largest financing deals.)
Beyond money, celebrities lend another form of power to the companies they invest in: social capital. Wealthsimple CEO Michael Katchen had said he hoped to leverage the A-listers’ clout to promote his fintech’s brand, which targets millennial investors. Some experts think that getting celebrities to invest in companies they believe in also helps build brand awareness, making it easier for businesses to market a product or service to consumers.
But for celebrity investors to really have an impact, Stephenson thinks more stars should use the power of both their capital and their profile to support businesses owned and led by diverse entrepreneurs—like Williams is doing. Chan, the CEO of Calico, told Betakit that the support from Williams and Serena Ventures is valuable given that the athlete has her own clothing collection and understands the industry.
“They not only come from an experienced background, they know the nuance,” Chan told the outlet. “I think that’s very, very key, especially in this space, because you can’t be building something generic.”