by Amazon announced yesterday the launch of Amazon Catalytic Capital, a $150 million commitment focused on investing in underrepresented manufacturers in technology. The initiative, according to a release, will invest in funds that support pre-seed and seed-stage startups created by Black, Latina, Indigenous, women and LGBTQIA+ founders.
The goal is for the money to support more than 10 funds and, as a result, more than 200 companies in the next year. So far, recipients include Techstar’s $8 million pre-seed vehicle, Collide Capital, Share Ventures and Energy Impact Partners. meaning there are still six slots open. In some ways, this is a continuation of Amazon’s investment in underrepresented founders, including the AWS Impact Accelerator, an initiative that commits more than $30 million to support underrepresented founders over the next three years. Last year, Amazon committed $150 million to its Black Business Accelerator.
The difference between these efforts and Catalytic Capital is that Amazon is now focused not only on supporting entrepreneurs, but also on the people who support entrepreneurs. Don’t worry, it still maintains acquisition targets, er, I mean, portfolio startups, closing: Catalytic Capital’s money comes with guidance from Amazon executives and other related resources. The company also said it will work with portfolio startups to identify partnership and product collaboration opportunities.
Catalytic Capital’s number pales in comparison to Amazon’s other corporate bets. It recently announced the first startups to receive money from its $1 billion industrial innovation fund. Amazon also launched a $2 billion Climate Pledge Fund in 2020 to invest in sustainable technologies and services that will help the company achieve its commitment to zero carbon in its operations by 2040. There is a history of companies pledging to boost innovation certain area or among a certain demographic. Last year, for example, Google announced a five-year, $1 billion plan to boost digital services across Africa.
Amazon’s entry into the fund of fund space backs up a prediction I made months ago, in which I said we’d see more of these kinds of vehicles given the late-stage market relaxation. Businesses want exposure to an ever-blooming early stage, and instead of doing it themselves, they can lean on venture capitalists to de-risk and even drive those early rounds.
