Unlocking Gender-Smart Capital At Scale

Jessica Espinoza: The 2X Challenge has been incredibly successful in transforming mainstream fund managers to become gender smart and to adopt the gender lens across the investment cycle.

Justin Norman: That's Jessica Espinoza, CEO of 2X Global.

Eloho Omame: When you say specifically that language, gender smart investing, what do you mean?

Jessica Espinoza: It's not only investing with a gender lens to have impact and promote gender equality, but also that it's smart because it makes economic sense and it's just a smart way of investing.

Eloho Omame: I wanna come back to this concept of mainstreaming gender smart capital. What does successful look like?

Jessica Espinoza: We intentionally decided to structure the 2X Challenge in such a way that investors are looking at their entire business to make gender smart deals. Where we see a lot of progress with mainstreaming gender across business as usual, but there are still challenges.

Justin Norman: Despite research showing that female founders outperform their male peers, startups with a solo female founder or an all female founding team raised a mere 2% of all the funding in Africa last year. There is a huge gender funding gap. How do we close it? This episode is the last of our five episode series on gender lens investing. Co-hosted by Eloho Omame, founding partner of FirstCheck Africa in an early stage fund backing female led startups. Each episode of this series will explore a different level of the fundraising value chain. In this episode, we're exploring ecosystem and capacity building with Jessica Espinoza, the CEO of 2X Global, an organization aimed at unlocking gender smart capital at scale. Jessica chairs the 2X Challenge that has raised more than $27 billion of gender lens investments since its launch at the G7 Summit in 2018.

Justin Norman: This series is created under the ScaleX project, co-designing solutions to close the early stage gender financing gap in Africa. An initiative of Make-IT in Africa. Make-IT in Africa, promotes entrepreneurship and innovation ecosystems across Africa for green and inclusive development. The program is implemented by the German Development Agency GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development. Before we start, we have one small favor to ask. If you enjoy the show and want to support the content that we create, please hit that subscribe button. It only takes a second, but it will mean a lot to us if you do.

Jessica Espinoza: Our mission is to unlock gender smart capital at scale and we have as of today over 150 member institutions across the spectrum of capital providers, across all global regions. The 2X Challenge is how everything started for us at the 2X initiative. The 2X Challenge was launched as a collective capital commitment at the G7 summit in 2018, and at the time it was really this unprecedented commitment by the development finance institutions to mobilize at least $3 billion of capital that benefits women. And we gave ourselves a timeframe of three years so from 2018 to 2020. This target was significantly overachieved, what we thought was really ambitious, actually turned out to be quite achievable. And we ended this three year period with over $11 Billion collectively invested. As of today, we have raised over $27 billion under the 2X Challenge, and this year we will launch a new challenge which will have fewer exciting new features, but that really dwells on the lessons and the experience of the last five years.

Eloho Omame: You talked just now about the 2X Challenge capital that benefits women. When you describe the work of your organization, you talk about unlocking gender smart capital at scale. So maybe we can sort of rewind a little bit, get an education around the concept of gender smart investing versus, for example, gender lens, maybe those are the same thing, maybe they're different things. But it'd be interesting to understand when you say specifically that language, gender smart investing, what do you all mean?

Jessica Espinoza: We like both terms, but gender smart investing is a term that we use a lot because it really speaks to the fact that it's not only the right thing to do, it's not only investing with the gender lens to have impact and promote gender equality, but it's also smart because we see that there are a lot of ripple effects both on other impact topics or impact objectives, but also that it's smart because it makes economic sense, it makes a sense from a return perspective, and it's just a smart way of investing. What it means for us is, when we started with the 2X Challenge, there wasn't really a common standard or definition of what is meant by gender finance or by gender lens investing. And so we collaborated with others in the industry to develop the 2X Criteria, where today a global industry standard for gender finance.

Jessica Espinoza: And that for us is, kind of stands for what we mean by gender lens investing or gender smart investing. And the 2X Criteria focus on opportunities along the four business value chains the first criterion looks at entrepreneurship at companies founded and owned by women. The second one on leadership, so the share of women on board of directors, IC's for funds and among senior management. Then the third criterion looks at quality employment, so the share of women in the workforce and workplace policies and practices that promote gender equality. And then finally, the fourth one looks at products and services and how they benefit women. There's a fifth one which looks at investments through financial intermediaries like financial institutions and funds. And that fifth criterion says that we look at these institutions through the lens of the 2X Criteria, both at the level of that institution as well as at their portfolio level.

Eloho Omame: Your members or your network is institutions, right? Or are you investing directly in companies taking this dimension?

Jessica Espinoza: Our members are institutions who are applying the 2X Criteria to their investments. So we've seen a very wide adoption of the 2X Criteria. If you're an LP, you can apply them to the funds that you invest in or the fund managers and their funds. If you're a fund manager, you can apply them to your portfolio companies, if you are an infrastructure investor, you can also use them, there's also additional guidance on how to apply them to infrastructure and project finance. So it's really widely adoptable and also our own members are looking at themselves and conducting their own self assessment on where they stand as an institution, also through the 2X Criteria, which is quite exciting.

Eloho Omame: Again, not to oversimplify, but it sounds as if the goal from an institutional perspective is having more and more institutions thinking in a very sort of framework driven way about gender smart investing and applying it in very practical ways. So I would imagine there's an element of education, tools and resourcing around how you support them. Capital, perhaps maybe you can talk to us a bit about then them sort of how you apply the 2X framework within your membership and how you sort of develop the sort of gender smart concepts.

Jessica Espinoza: Happy to talk a bit more about how we're set up. So as I mentioned, our mission is to unlock gender smart capital at scale, and we have identified three strategy pillars to achieve that mission. The first one is to build investor capacity. So what we've learned under the 2X Challenge is that it's really valuable to bring together investment practitioners around the table and to build their capacity because they are ultimately the engine of making the capital deployment happen. So it's really important for them to understand the why. Why is there such a strong case for investing with a gender lens? What's the business case and impact case in my particular sector or asset class or region? But then also to collaborate on the how, so how exactly do you do it in different contexts and different with different types of investments.

Jessica Espinoza: And we've developed a lot of kind of master classes, trainings, peer learning opportunities, as well as tools. So very practical tools that we co-developed with our investment practitioners to make it practical and to actually move the needle. Then the second strategic priority or our pillar is to advance standards. And that's where we started with the 2X Criteria. And as you just pointed out, the idea from the outset was to have a common framework that's pretty simple so that it can be widely adopted and that we're all using the same definitions, speaking the same language, and having a common framework even if we may be operating quite different regions, different sectors, different asset classes and so on, so that they can really be adopted across global regions. And we are now in the process of launching a 2X Certification mechanism, which will take that standard setting work to the next level. So the 2X Certification mechanism builds on the 2X Criteria.

Jessica Espinoza: And so there is this kind of recognized simplicity as a starting point, but then it goes a lot broader and deeper into the different dimensions of the 2X Criteria and also thematic areas. And our aim there is if we say the 2X Criteria, it's what would looks like in gender smart investing. Then 2X Certification also establishes the higher tiers of what is better or what we call advanced and what's best in class. So we really want to go broader and further and move the needle further also in terms of depth of impact. And then our third strategy pillar is to shift markets, and that's where we have a few quite innovative initiatives. And the idea here is that we are ourselves starting to deploy capital in areas where we see that there's really a huge need and where we could unlock significant impact at scale, but where the market is currently not moving because of market failure.

Jessica Espinoza: And there we have initiatives like 2X Ignite. Essentially it's a market building facility to back this next generation of female fund managers with gender smart investing strategies that is currently significantly underfunded. And then we also recently won the mandate to manage the climate gender equity fund, which is a grants vehicle that provides catalytic grants to innovative investment opportunities at the nexus of gender and climate. And that again, here, the idea is to crowd in others and crowd in significant private capital by providing actually, hello, maybe that first check to [chuckle] speak also to your mandate and mission to write that first check and proud and others to support.

Justin Norman: We've been thinking a lot about this chicken and egg question of how you solve some of these problems and we're taking a value chain approach to this series. I think you used that term earlier because it seems true that there are interventions needed at various different levels. You also just talked about sort of market failures and in your work with the institutions in particular, I'm curious if you can speak a little bit more to, I guess, the set of considerations that they have and why all of this capacity building and ecosystem development work is necessary to solve this problem. Right, especially if investing you talk about gender smart. Investing in women is a smart thing, can lead to good returns. There's plenty of data around all of that, but it feels like there's still a very heavy lift to solve this chicken and egg question for increasing more capital towards women. And I'm curious if you can talk about the cause and effect of that.

Jessica Espinoza: Yeah, I think when we started several years ago to talk a lot more about the opportunity of gender smart investing, there was a lot of curiosity but it wasn't really clear what the opportunity really was. So even in 2018 when we launched the 2X Challenge, we got a lot of kind of skeptical comments. What do you mean investing in women? Is that now a CSR initiative? Is there really a market, a lot of misconceptions? And so it took quite some effort to really show the opportunity, the market, the business case, as well as the impact imperative.

Jessica Espinoza: But especially the impact case, which was interesting because even at the time there was already so much evidence, there were already all these McKinsey studies that showed the return on investment and very concrete financial statistics and studies of why this makes this much sense. But I guess it's for the investor community at the time, it was quite hard to apply that to their own context, so everybody knows about these big figures, but what does it mean for me as an investor in my particular market with the different instruments that I have and the sectors that I operate in? In the early days, there was really this need for the translation work of what's the why, what's the case? But then also what does it mean for you in your particular company or fund or wherever you are, and how can you adopt the gender lens and, and unlock your own business case and in your particular area.

Jessica Espinoza: So that's where we had a lot of peer learning, where we developed case studies also co-invested together on actual deals to have kind of a demonstration effect and a case. And that's also where the 2X Challenge really helped on the one hand, because it was this community of practice where we co-invested and collaborated on deals. So it was kind of a lot of on the job or on the deal capacity building. But at the same time, it also allowed us to really demonstrate to investors globally how to do it, what it means, and to present some very tangible case studies as well as kind of tools. So in the early days we were developing our own checklist for due diligence, and we're then sharing that with other investors to show how we are doing it.

Jessica Espinoza: And then over time it became much more sophisticated and kind of figure tools. But it started with this collaboration among practitioners in the early days. And I would say today, fast forward, there's a lot more understanding about the why and the how, but there's still challenges. And I think where we see a lot of progress is really with mainstreaming gender across business as usual, but there's much less progress with challenging business as usual and thinking about more fit for purpose capital, for example, or other instruments, more innovative finance. And so we're still seeing a lot of structural biases and barriers as well.

Justin Norman: That raises a few questions in my head. One is, knowing that a lot of your members are DFIs who were already investing with an impact lens, was it that the impact lens, I guess wasn't, I don't know, inclusive or broad enough to see the outcomes that we desired from a gender lens perspective? And then maybe related to that I think you guys are trying to set an agenda as it relates to gender smart capital, and I think there's a question about like the downstream impact, right? So when we look at the value chain, it's if there are more DFIs who are directing more money to fund more fund managers who can invest in more funds, right? I think there's a question for me about how far down does that measurement go, in terms of how and why these interventions were needed to actually change the status quo.

Jessica Espinoza: So in the early days we started our membership with the DFIs. So we started initially with the G7 DFIs then grew to 20 DFIs and MDBs multilateral development banks. And today with over 150 member institutions, the DFIs are actually like a smaller portion of that. We have about 20 DFIs and over 150 members. So it's now much more diversified. But of course the DFIs still have a lot of weight. They have the signaling signaling power and active in our network as well. And still in many, many cases the leaders in the space. So, and when we started, I think it was in a way it was not DFIs specific. I think it was what a lot of impact investors were facing that they thought by focusing on development or impact with a gender neutral, what was assumed presumed to be a gender neutral approach, you would have a gender equitable approach, right?

Jessica Espinoza: And if there are female entrepreneurs, they would have an equal chance at getting funded. And only really when diving a lot deeper into portfolios and looking at the investment process as well of how decisions are made. You know, starting with very simple things like how do you source your pipeline? We started to realize that there were important gaps and that gender blind approach wasn't good enough, but that we had to be really intentional if we wanted to make sure that there wasn't any gender bias and that female entrepreneurs or gender smart businesses across the 2X Criteria had an equal opportunity. And it was really then that we started to realize kind of see the business case and also the impact case and adopt a much more intentional strategy. And that's what we've since seen with many other investors as well, that there is this recognition that by just being blind to gender, you're not... It's not happening by itself.

Jessica Espinoza: Where the 2X Challenge has been most successful, kind of reflecting on your second question, I would say is really with this idea of mainstreaming gender across institutions, portfolios, the range of deals and diverse sectors and the 2X Challenge has really changed the DFIs way of doing business. And this has had important trickle down effects on fund managers and businesses. Reflecting on the lessons of the first years of the 2X Challenge, we realized that the next frontier is to go beyond mainstreaming gender to more intentionality and more fit for purpose capital. If we take the example of allocation to fund managers, the 2X Challenge has been incredibly successful in transforming mainstream fund managers to become gender smart and adopt the gender lens across the investment cycle and build more gender smart portfolios. However, it has been a lot less successful in allocating capital to this next generation of female fund managers who are raising innovative gender lens investment vehicles and are still facing significant barriers when fundraising.

Jessica Espinoza: And that's mostly because, one, they are perceived as first time fund managers and are therefore perceived as more risky. And two, the type of gender bias that is well documented at the level of female entrepreneurs is reinforced at the level of fund managers. And so we see lots of excitement about established male founded funds who diversified their leadership teams bringing on board more women. But whether it's still kind of much less traction and more gender bias is at the level of women founded funds and companies. And that's where we want to move the needle a lot more.

Eloho Omame: Jessica, I've got a comment which I'd love you to comment on. So it's interesting, it sounds as we're having these different conversations, a bunch of questions that we're trying to explore across the value chain, but one of them is really this question of, I guess where is the highest leverage point for impact, when you think about, for example, the gender funding gap and how to potentially reduce it? And some people will take a, I suppose, a multidisciplinary approach whereby they talk about education and mentorship and as well as capital others will say, "Look, the primary issue here is one of bias and it's about investment processes, et cetera." In a couple of points now you've referenced bias, bias at the level of the funds themselves and the fund managers themselves and their ability to raise capital and also bias in the investment processes, I guess, such that you have the frameworks that are designed to effectively eliminate those. Is it fair to say that your philosophy is, or your organization's philosophy is that really the core issue and the primary issue that needs to be addressed is one of bias or do you, again, think about things a little bit more multidisciplinary?

Jessica Espinoza: I think it really depends. So I wouldn't say that it's across the board, that the primary issue is bias. I think it depends. I think in some areas it's definitely more multifaceted and in some areas it might be more a question of more capacity building, including among investors of the how, how to do it, how to incorporate agenda lens across the investment cycle. It might also be other challenges, including, for example, regulatory restrictions on more innovative financial products. So I think there are definitely multiple, angles and leverage points. But when we look specifically at the fund management space and private equity and venture capital in particular, I think the key issue is oftentimes bias. And it's different types of biases. I think there's in general a bias against first time fund managers, but if they're women, that bias is for the compounded.

Jessica Espinoza: I think there's also often a bias against gender lens investing. The example that I mentioned earlier, if an established private equity fund that was very mainstream before is now adopting a gender lens and using the 2X Criteria, there's a lot of excitement and they attract a lot of capital. But if a fund manager is raising a new fund, or if a new team is coming together and they're raising a fund and they have a very intentional gender lens investing strategy, they might get questions like, "Oh, aren't you just looking at half the market?" Because, people assume that they are just looking at women and they would count. And no, actually we're looking at the full market, the mainstream funds are ignoring 50% of the market. So I think how these funds are looked at is different.

Jessica Espinoza: Another type of bias that we see is, if even among first time fund managers, if a man is raising a 50 million fund, it's great. If it's a woman, she's asked why she's raising such a big fund and [chuckle] if it wouldn't be better to start with 10 million. So I think different of bias, sometimes it's more in more in your face and sometimes I think it's more subtle, but that particular space, I think it still has a lot to do with bias. The other area, maybe that could also be seen as a form of bias, but it's less obvious and less intentional perhaps, is just the types of instruments that are available. So for example, if an institutional investor, an LP in funds is only able to write tickets of 20 million and they can't have more than say 20% of the fund, then they're unable to invest in smaller funds, for example. And therefore can't, for example, invest perhaps in VC funds or in more early stage funds or innovative vehicles. You could say, it has nothing to do with gender, it's just that [laughter] they have a different mandate. But of course you could also go further and ask, well, where's that mandate coming from? And can they change the mandate? But that's a more complex issue, perhaps.

Eloho Omame: My second question is around, I wanna come back to this concept of mainstreaming gender smart capital. And you said that... You said a couple of times now that that's really where you've seen quite a lot of success in the initial journey, and it informed your strategy going forward as well. Can you talk a little bit about, when you say number one mainstreaming, what does successful mainstreaming look like? Perhaps there's some relationship, for example, to when you describe established funds, then incorporating gender smart concepts, but having successfully, or having had lots of success in this area of mainstreaming in practice, what has that meant?

Jessica Espinoza: Maybe I can use a few examples and contrasted to what I mean with mainstreaming. So for example, the 2X Challenge, at the time when we started it, we could have taken an approach to say, we are raising a small fund. Or we have a designated initiative. We are raising, for example, 1 billion for this very particular purpose with a gender lens and it's ring fence, it's a side initiative, and then there's business as usual. That would not be mainstreaming. That would be a very intentional approach and maybe even a really good approach, but it would leave business as usual untouched, and it would be like a side initiative that would be celebrated. And we intentionally decided to structure the 2X Challenge in such a way that investors keep the assets on their balance sheet. So they're all co-investing, but they're all having it on their own balance sheet, and they are looking at their entire business for an opportunity to make gender smart deals.

Jessica Espinoza: So what happened with that approach is that they use the 2X Criteria and they embedded them into all of their systems. So for example, a DFI, whether they do direct investments, private equity, or if they do direct debt, or if they invest in a fund or in an infrastructure project, whatever they do across all of their business, they look at those opportunities through the 2X Criteria. And the 2X Criteria are fully integrated into all of their systems. That's a mainstreaming approach with this example of a DFI. Not mainstreaming would be to say, let's have one technical assistance products that's all about gender, and then that's our gender thing, but let the other business units alone, that would not be mainstreaming. And in a way, it's not to say that one is better than the other. I think there's also really a need to have gender first tools of capital and TA products that are innovative that have a gender lens, but it's very different from fully transforming an institution. And in a way, mainstreaming might be, could be seen as easier because you take many different entry points and do it across your business, but it can also be more transformative because you're really changing the way of doing business across the organization.

Justin Norman: One theme that's emerging in this series is there's a... It seems a little bit of a tension around how to measure success, and maybe this gets into the 2X Criteria as well, but I was looking at the 2X Challenge insights report, and there are people who are talking about, we qualify deals under certain specific criteria, but we're not often thinking about a theory of change, or it's sometimes too easy to qualify deals. And maybe inside of that tension also, there's this question about in the context of biases and venture and perceived risk for women and founders and things like that, this idea about traditional venture scale businesses versus SMEs. This idea aut female founders versus gender diverse teams versus female focused businesses. And I'm curious to know how you and the organization think about that, because it does relate to this question that we want to get to next around how to measure success. And for me, I think unlocking billions of dollars for gender smart initiatives is a goal unto itself, but it seems like that also might not necessarily be enough in the context of what you just said with mainstreaming. So how do you think about that?

Jessica Espinoza: Yeah, it's a very interesting question, and perhaps starting with the latter part of your question about, the big volume targets and unlocking significant amounts of capital. I think these capital deployment goals are definitely important if we want to shift capital at scale. And that's also where we see most momentum, most excitement. But we also have to be conscious that big volume targets can backfire. And the greatest challenges of our times, and especially if we look at opportunities on the African continent, and what we are hearing from entrepreneurs and from fund managers on the ground, is that they require really fit for purpose capital. What you just alluded to instead of just a conventional model that has perhaps worked well in developed markets, that we need more context specific solutions that are perhaps more SME finance or other innovative vehicles, perhaps revenue based finance or other models.

Jessica Espinoza: And it also often means smaller tickets. And so by just having volume targets, there's a real disincentive to deploy capital where it's most needed. And unfortunately, we're also seeing this in the global debates around mobilization, especially in development finance, where everybody's excited about mobilization, but if you have very high mobilization targets, it can actually mean that you're doing bigger investments, less risky, that's more appealing to those you can mobilize. And so we have to be very conscious of the challenges that come with it. For me, it's not an either or I think we need these volume targets still, and now people are excited to dream about the next trillion and so on. And I think it's great. But at the same time, we should also have other additional metrics targets, for example, on this fit for purpose capital or maybe also the number of deals.

Jessica Espinoza: So that you also celebrated if you make small tickets because that's what's needed in many cases. Or if you take more risk, if you go more into early stage investments. And then also, how can we give more credit to those who really go the extra mile on impact and measurement, who have a theory of change, who are a lot more intentional about what change they wanna affect and how impact is actually happening on the ground. And with that, I think it's also important to speak more about transparency and to give credit to those who are transparent in all of their metrics, their investments, what's happening, so that we as a community can also learn and have that data available. And I can just make sure that as a field we're moving forward and learning from each other.

Justin Norman: Can you say a little bit more about the impact in theory of change, I think beyond just, again, this volume metric, I think reading through the report a lot of people were talking about wanting to be more intentional in capturing or generating or measuring impact. And that was quite interesting to me because, again, it says that this idea about just unlocking billions of dollars for gender smart initiatives is perhaps not a necessarily a goal unto itself in the context of maybe the broader goals of the development community. So what does that mean then in terms of the how to measure and how to implement here?

Jessica Espinoza: The theory of change, I think it has to be tailored to the particular actor or the type of institution. So say for example, if you're a fund manager, you have an investment thesis, like what's that? What's the fund thesis? What is ultimately the change you wanna affect? And then breaking it down into what are you doing? So perhaps, how are you sourcing deals? Are you looking to source companies that are already gender smart and are having a positive impact? Or is it more that you are looking for companies that have the potential to become gender smart? And then over the, your holding period as part of the value creation plan that you develop, that's your strategy. That's where you make the delta and create impact. And then you have a responsible exit and you can see, the impact that you've made over the time of your investment.

Jessica Espinoza: And then are you investing, maybe in education or in agriculture, or what's the sector and what's the change that you wanna affect in that sector? And you can use the 2X Criteria as a starting point to think about the business value chain. But then you should also come up with additional impact metrics and you can use, for example, Iris Plus or other harmonized frameworks to think about those additional metrics. But what is it that you're putting in, what are your processes and then what is it that you're measuring as outcome? So with 2X certification, we're looking at different opportunities along, what could be considered a theory of change or what could inform a theory of change. So it's looking at the input, do you have a certain policy?

Jessica Espinoza: Do you have certain practices, management systems, but then also performance indicators, so how are you actually performing on certain dimensions? And then also outcome metrics. And we're also looking at how do you approach impact management and measurement. So a much more holistic approach, and we hope that that will provide guidance and make it easier for all those who set, they want to do more on depth of impact, being more intentional. With the next 2X Challenge, we're also implementing some quite significant changes. First of all, we'll be opening it up to the full spectrum of investors. So, as in previous rounds it was the DFIs who were able to qualify deals and other investors were coming in as co-investor. Going forward, any 2X Global member can fully participate in the 2X challenge and qualify deals.

Jessica Espinoza: So that's already opening it up to a broader spectrum of capital providers. And then what we think is going to be particularly exciting is that we will have much more engagement around thematic priorities. So this idea of “gender and”, so gender and climate, and clean energy, care or JEDI, broader justice, equity, diversity and inclusion, so that we can really group our members around those priority areas where we wanna see more capital going, and then how can we all collaborate and also measure it and make it much more tangible.

Justin Norman: For each episode of this series, my co-host Eloho Omame and I sat down for a retrospective conversation to reflect on the insights shared by our episode guests.

Justin Norman: Been talking to Jessica, she talked about mainstreaming gender. And I know that that was something that you took away. I'm wondering what your perspectives are on what she had to say about mainstreaming gender.

Eloho Omame: I really liked it, this idea of really embedding gender consciousness into investment processes and things like that. And again, I suppose the reason that I think is important is back to this thing around you can't move what you don't measure. The diversity has a dividend, all of those things, which I think make economic sense. So I really like it. I also like the concept of mainstreaming. I think it resonates quite a lot with me because to a certain extent, that's also how we think about our portfolio support at First Check Africa, is that I think if you look on our website, there's some language around helping female founders move into the mainstream. It's this idea that these silos are not beneficial in the long term cap tables where yes, first check Africa is there, but a mainstream VC fund, we think of ourselves as pretty mainstream, but call it a non-gender focused VC fund is also alongside us, is a good thing.

Eloho Omame: Crossing the next round, the seed round, that series A round, moving into global funds and mainstream funds is a good progression and a good path is something that resonates to me because it's the journey to making sure that our portfolio companies don't fall off this cliff, for example. It's the journey towards countering this effect around this kind of, if you have a female investor, then unfortunately the market views that as a negative signal. The other reason that I think the conversation with Jessica I found really interesting outside of the mainstreaming, which I love as an objective, and I haven't ever heard any other organization articulate a goal quite like that. But the other piece that I really liked was in really this idea of giving the ecosystem language and frameworks with which to harmonize concepts. Because...

Justin Norman: The 2X branding across everything was actually really great.

Eloho Omame: Yeah. It's really great and really powerful.

Justin Norman: They can seem like great marketers almost.

Eloho Omame: Exactly. And...

Justin Norman: Which is maybe what the, what it something like this initiative needs, right, is...

Eloho Omame: Yeah. 'Cause it can be very noisy and murky and confusing and I say that as maybe somebody who contributes to the noise. With good intention as well. But I think as an ecosystem, we don't all have to talk about the same thing, but when we are talking about the same thing, I think it should be clear what we're talking about [laughter] And I think the approach that Jessica and her team have is really quite interesting.

Justin Norman: And my takeaway in particular was the role that an organization like 2X Global has in agenda setting and in getting everyone to push from the same direction. And they are pushing from the same direction around broad consensus and being the convener that gets perspective and takes it in and decides like this is what's important. And then it seems like the outcomes are there. They've been able to get a lot of commitments to these issue.

Eloho Omame: Yeah. And if they've done it in a relatively short time as well, it's really powerful.

Justin Norman: And I wonder if you talked a little bit about this flywheel effect as well. I know it's not necessarily the same, but there's a snowball effect also of organizations or investors or LPs needing to see that other people are doing it too. And so they had a first round commitment that I think was a few billion dollars and they exceeded that goal. And then the second one was substantially bigger. And so hopefully that is the progress that we need to see from a directional trend perspective is that as more and more people do it, it's gonna lead to more people allocating capital towards these initiatives as well.

Eloho Omame: Yeah. A 100%. I also think, same way we talk about it in the world of investing, I think you have to allow female founders or founders in general to build reps around companies and to make mistakes and to have another go at it. And you can't do that if number one, we're talking about lots of different things that are distracting. But aside from that, we're also just not giving them the capital to build the companies.

Justin Norman: And actually to some extent what we're talking about in the context of gender lens investing is a similar conversation that the ecosystem has had in the African tech ecosystem generally, about...

Eloho Omame: It's just a microcosm of that. It's the same. Yeah.

Justin Norman: Yeah. And about the degree to which impact investors need to measure and what is expected of founders inside of that, the degree to which African founders generally are over mentored and underfunded. And the degree to which there's an acceptance of failure and the degree to which funds have a buffer built in where they can get more shots on goal and allow more failure. It's all the same.