Did you miss a session from GamesBeat Summit 2022? All sessions are available to stream now. Learn more.
Brian Krzanich, chief executive of Intel, announced today that his Intel Capital venture arm will invest $125 million over the next 5 years in technology startups run by women and underrepresented minorities.
The move is the first stage of execution of Krzanich’s promise at the Consumer Electronics Show in January to invest more than $300 million to diversify the talent in the technology industry. It is a huge commitment that dwarfs other efforts to change the face of Silicon Valley.
Intel asserts that its investment in women and underrepresented minorities — which is defined as African Americans, Latinos, and Native Americans — is the largest of its kind.
Lisa Lambert, Intel Capital’s team leader for software and services investments, said in an interview with VentureBeat that the world’s biggest chip maker has spent the past six months figuring out how to implement the vision that Krzanich laid out.
“The big issue we have seen, because venture capitalists are on the leading edge, is that we need to engage here,” Lambert said. “We see a lack of engagement and involvement across the industry as a whole. We want to be a catalyst. We believe it’s good business. Half the population is women. Women are leading in every other industry. And there is a tremendous demographics shift.”
She added, “If you look at the population growth, it is coming from underrepresented minorities. We need to support them directly. We think this is smart on a number of levels.”
The categories for investment include both technology companies and gaming. The money is part of Intel Capital’s existing budget, for the most part, in addition to the money that Krzanich set aside for a broader effort in January.
Intel is putting its money where its mouth is today with an investment of $16.7 million in four companies.
Those companies are Brit + Co, CareCloud, Mark One, and Venafi.
Other investments will go into a broad spectrum of industries, including the Internet of Things, the Maker movement, health care, and cybersecurity.
The fund is just one part of Intel’s Diversity in Technology Initiative, announced in January, which aims for the company to reach full representation of women and underrepresented minorities in its U.S. workforce by 2020.
The Intel Capital Diversity Fund will not invest in firms owned by minorities that are not defined as underrepresented. That includes companies owned by Asian Americans, who are overrepresented in tech startups in the U.S.
If a startup is led by a woman or underrepresented minority, or if three of its top executives are in those groups, then the startup is eligible for an investment from the fund, Lambert said.
“We want to make a difference here,” Lambert said. “These are the groups that receive the least amount of funding.”
But the fund will invest in global tech companies, and it will show some flexibility where needed, Lambert said.
“Women have this issue in every geography of the world,” Lambert said.
In a statement, Krzanich said, “We believe that a diverse and inclusive workplace is fundamental to delivering business results. Our goal with this new fund is to meaningfully support a technology startup workforce more reflective of society, and ultimately to benefit Intel and the broader economy through their successes.”
The current scope
As an African-American woman, Lambert said, she understands the distinct challenges faced by women and minorities.
Only 15 percent of venture capital-funded companies in the United States have a woman on the executive team, according to a recent Babson College report, and companies with a female CEO receive only 3 percent of total venture capital dollars.
Intel also noted that less than 1 percent of the founders of Silicon Valley companies are African American or Latino; nearly 100 percent of funded founders are white or Asian, according to industry surveys.
Lambert said that Intel didn’t include lesbian, gay, bisexual, or transgender (LGBT)-led companies, mainly because it decided to go with a historical definition of underrepresented minorities, whose numbers are measured under federal law.
“We wanted to keep it simple and consistent,” Lambert said. “There is not a lot of visibility around LGBT. It is murkier because it is not a required disclosure.”
The current crop
The Intel Capital Diversity Fund launches with investments in four companies, which will gain access to Intel Capital’s business development programs, global network, technology expertise, and brand capital.
Brit + Co in San Francisco aims to unlock creativity by educating, inspiring, and supporting women and girls. A media and e-commerce platform, its online classes and all-in-one kits let makers learn everything from calligraphy to building gadgets with Intel Galileo boards.
CareCloud in Miami connects health care providers to each other and their patients through a digital ecosystem that includes practice management, electronic health records, and medical billing software and services. Intel and CareCloud have jointly authored a white paper on cloud computing in health care.
Mark One in San Francisco used the Intel Curie hardware module to create a smart cup, Vessyl, that automatically recognizes any beverage its user pours into it, displays its nutritional content, and syncs all drinking habits to the user’s smartphone.
Venafi in Salt Lake City delivers a trust protection platform. It aims to secure cryptographic keys and digital certificates that businesses and governments depend on for secure communications, commerce, computing, and mobility. Its technology enables Intel to offer end-to-end key and certificate security to its customers running OpenStack. With Venafi’s key management solution, Intel said it can continue to bring market-leading security and data center technology to market.
In addition to the diversity fund, Intel Capital invests in a broad range of companies offering hardware, software, and services targeting enterprise, mobility, consumer Internet, digital media, and semiconductor manufacturing.
Since 1991, Intel Capital has invested more than $11.4 billion in over 1,400 companies in 57 countries. In that timeframe, 211 portfolio companies have gone public on various exchanges around the world, and 370 were acquired or participated in a merger.
Lambert said that 10 percent of Intel Capital’s portfolio companies are currently led by women and underrepresented minorities. And 13 percent of Intel Capital’s employees are also in those groups. While that compares favorably to the rest of industry, it’s not enough for Krzanich’s vision.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Learn more about membership.