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Monique Woodard is betting on the people Sand Hill Road keeps overlooking

The Cake Ventures founder sees three distinct demographic groups as ripe for startups to tackle: the aging population, women and people of color.

Cake Ventures' Monique Woodard

Monique Woodard is looking for opportunity in demographics that established investors aren't tackling.

Photo: Getty Images

In the coming decades, the United States is going to look a lot different than it does today.

By the year 2045, the United States will become majority-minority, according to the U.S. Census. Meanwhile, one in every five residents in the U.S. will be older than 65 by 2030, according to U.S. Census projections.

Monique Woodard is placing these impending demographic shifts at the core of her new firm, Cake Ventures. Woodard, a former venture partner at accelerator 500 Startups, believes these areas of demographic change should "change the way we invest in technology," she told Protocol.

The name of Cake Ventures, where Woodard is both the founder and managing partner, is an allusion to her investing thesis. The three layers of this venture dish are age, women and people of color.

The frosting between the layers? The changing "makeup of the internet user base," Woodard said.

If she's right, and her fund backs the right companies, the returns could be sweet.

Woodard did not disclose the size of her first fund, or the first two investments it has made. She did tell Protocol that First Close Partners, a firm that backs funds led by underrepresented minorities, is a limited partner in Cake Ventures.

A growing aging population

Historically, Woodard said, investors have placed enormous value on youth while failing to address the aging population. By 2034, Americans over 65 will outnumber those under 18. Plenty of investors have talked about aging-Baby Boomer bets — there's even a whole firm dedicated solely to lifespan extension.

But a key difference now is that Gen X is aging.

"I think it is the time to start focusing on the needs of an aging consumer, especially as everyone ages, as Gen X moves into 55 and over," Woodard said. "These are populations with more experience with technology and have more desires from technology. We've also seen the aging population very quickly adapt to and adopt ecommerce, online shopping, getting their groceries delivered."

Woodard made her first investment in an age-related startup back in 2016: Silvernest, a home-sharing service for seniors. But there are other types of companies that don't explicitly meet the aging criteria that can be helpful to people as they age, Woodard said. Estate planning startup Trust & Will, she said, is an example of that.

"You don't look at it and think, 'That's an aging company,' but if you think about the needs of people, as they get older, you're going to need a will or you're going to need a trust," she said. "So I think of those opportunities as less on the nose but also, in a lot of cases, more interesting to me and scalable than a lot of the truly, 'Oh, this is only for an aging population.' It's all about how do you improve the lives of people as they get older?"

What the future of work looks like for aging people is also something on Woodard's mind. Woodard bets that the traditional age of retirement, 65, is no longer the age at which the masses see themselves as leaving the workforce.

"Let's not ignore that sometimes people just need to stay in the workforce," Woodard said. "But there's also just desire. They don't want to retire yet."

Women as power consumers

The second layer of the cake is companies that can reach billion-dollar outcomes based on economic activity of women, Woodard said. In 2019, for example, 89% of women throughout the world said they were responsible for or jointly responsible for household spending, according to research firm Catalyst. Despite that, Woodard said she has noticed many investors discount the power of women as a consumer group.

"You see women either being the primary person responsible or a secondary person responsible for many purchases across many categories," Woodard said. "And I thought that had not been adequately explored."

Woodard pointed to Bumble, Glossier and Peloton as examples of highly successful companies with strong female user bases.

"But there are also companies that I think will eventually get there, like Modern Fertility," she said. "There are a lot of companies, not just in ecommerce specifically, but across health and wellness, future of work, fintech and financial services. I think that there's a lot of opportunity there that investors haven't tapped into yet."

People of color drive the culture

The third layer of the cake is made up of companies with significant numbers of people of color as users or customers. Prior to Cake Ventures, Woodard invested in companies like Mented Cosmetics, a cosmetics and beauty brand for women of color, as well as Blavity, a media site geared toward Black people.

"But I also look at TikTok and Clubhouse as really good examples of the kinds of adoption that these demographics drive on mainstream platforms," said Woodard, who is not an investor in those particular firms. "So if you look at Clubhouse, you can very obviously see that the platform sort of grew on the backs of Black culture and a lot of the activity of their Black users. So I think that's something to pay attention to. And it's a signal for a larger, broader, more important driver. We are culture and the culture of people of color will drive internet adoption."

Beyond the cultural influence of people of Black people and people of color, these groups also have a lot of spending power. In 2019, Black buying power hit $1.4 trillion, Latinx buying power hit $1.7 trillion and Asian buying power came in at $1.2 trillion, according to Catalyst. However, the combined share of buying power among Black, Latinx, Asian, Native American and multiracial consumers, comes in at 29.1%, which still falls short of white consumers' 81.7% share.

But given that these minority groups are on track to become a collective majority around 2045, Woodard feels confident that people of color will influence internet culture even more in the future.

"I would say that the rise of a new majority is going to impact every single platform that we know of," Woodard said. "When Jack [Dorsey] started Twitter, no one said that Twitter is going to be Black. Yet, Black Twitter does exist. And I think it has been an audience that has been underutilized when it comes to Twitter's growth. It's almost accidental. And I think the opportunity is in making something like Black Twitter more than accidental, but making it intentional."

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