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Black Women Still Receive Just A Tiny Fraction Of VC Funding Despite 5-Year High

Editor’s note:

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Editor’s note: This article is part of Something Ventured, an ongoing series by Crunchbase News examining diversity and access to capital in the venture-backed startup ecosystem. As part of this series on venture funding to Black entrepreneurs, we also look at how venture funding to Black startup founders has grown over the past year and at Georgia, the state that invests the highest percentage of its VC funding into Black entrepreneurs. Access the full Something Ventured project here.

Joanna Smith, the founder of edtech startup AllHere, recently raised an $8 million Series A after bootstrapping her company first. A former middle school math teacher, Smith opted to go through two accelerator programs to learn how to pitch investors and develop a repeatable sales and operational process.

“The hardest part is, honestly, access to the network,” Smith said of building her company. “Prior to when I started my company, my frame of reference was teaching 6th and 8th grade math. I had a strong network of customers, but not a strong network in Silicon Valley. And I didn’t have any personal experience as an investor. And I think sometimes access plays a role in a founders’ capability to raise.”

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Smith is a Black woman and her company is one of a still tiny but growing number of startups led by Black women to raise venture funding.

While Black female startup founders have received just 0.34 percent of the total venture capital spent in the U.S. so far this year — a far cry from being representative — the dollars invested in their companies is on the rise, an analysis of Crunchbase data shows.

Venture funding to U.S. startups led by Black women is on track to outpace the past five years, according to Crunchbase data. Startups with at least one Black woman as a founder have raised around $494 million so far in 2021, already surpassing the $484 million raised in all of 2020, according to our data.

Notably, Black women are better represented in the subset of funded Black founders than women in general are among all the funded startups in the U.S. About one-third of funding to Black startup founders every year goes to companies led by Black women, while funding to female founders overall is consistently in the single-digit percentages.

The data also shows that by funding round count, 40.5 percent of funding to Black founders in 2020 went to Black women. On the flip side, that figure also suggests that the amounts raised by Black women in a funding round tend to be on the smaller side.

The ‘Valley of Death’

Many funding deals to Black women founders happen at the pre-seed or seed level, but there needs to be more investment in subsequent rounds, according to Samer Yousif, chief of staff at BLCK VC, an organization that aims to increase representation of Black investors in venture capital.

“There’s this valley of death between the seed and Series A,” Yousif said.

He added that the investor landscape needs to change before we’ll see significant improvement in the levels of funding to Black women founders. That doesn’t just mean more analysts or associates of color at venture firms, but also more general partners who are able to write larger checks.

Funding to U.S. companies led by Black founders reached $1.8 billion in the first half of 2021, per Crunchbase data. That half-year total already eclipses the total funding to Black founders for all of 2018, which was previously the highest year.

But, it should be noted that the increase in funding to Black entrepreneurs coincides with an increase in venture funding in general. The dollar amount of funding to Black founders is up, but still represents just 1.2 percent of the record $147 billion in venture capital invested in U.S. startups through the first half of this year.

“There’s a combination of efforts to increase access to capital and nonfinancial resources to get Black women and BIPOC founders ready for investment and ready to build and grow their businesses,” said Bahiyah Yasmeen Robinson, founder of VC Include, a community of diverse and woman-led fund managers and limited partners. “Some of the things I think that have supported that acceleration are Black and Brown specific accelerators and incubators like Camelback and Founder Gym and others. I deeply believe there needs to be more of those types of programs that are also supported by capital.”

The number of incubators for minority founders is starting to increase, but it’s not increasing fast enough, Robinson said.

“We don’t have enough best-in-class programs to attack the problem at scale, especially company investments as well as nondilutive capital,” she said, adding that the other component is making sure that fund managers of color are also capitalized to invest in market opportunities.

If there are more well-capitalized fund managers of color, Robinson believes, access to capital for underrepresented founders will increase as well. VC Include’s mission is to increase investment in diverse emerging managers.

For the majority of fund managers of color who don’t have a diversity lens in their strategy, 30 percent to 50 percent include women and people of color in their portfolio — simply because they’re good companies to invest in, Robinson said of the funds VC Include has engaged with.

Relationships matter

At the end of the day, venture is still a relationship-driven industry, according to Fatima Dicko, CEO of proptech startup Sugar, which recently raised $2.5 million in funding.

For more Black women to get funded, established investors need to be advocates for underrepresented founders, she said: “For some of these well-established firms, don’t just write the check, don’t just meet with the founder, be the voice that brings other checks into the round.”

Dicko pointed to an August 2020 DocSend data report that found potential investors spent 50 percent more time scrutinizing the “Traction” section — the slide that details milestones and growth metrics of the company — of all-female teams’ pitch decks than they did of all-male teams’ pitch decks. That could be interpreted to mean that women have to prove more to be given a chance.

Implicit bias is a tricky thing, Dicko noted. And it shows itself in different ways.

“While it is important to have that momentum and come to the table with having done something even without the funding, I do think that the expectations can differ, for sure, of what’s considered early or not,” Dicko said.

“I think it would be interesting to do some research into who gets funded at the idea stage,” she added.

In Smith’s case, accelerators — especially those that don’t take equity — were instrumental in her ability to raise money, she said.

“Definitely programs that focus on that training and that network, I think, are critical,” she said. “I’ve found those programs to be helpful when they’re equity-free for those founders and companies taking part in them. Whenever those programs are partners with commitments to fund companies once they go through those programs, it’s even better.”

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/something-ventured-black-women-founders/

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The Briefing: (11-29-21)

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

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India’s Slice snags $220M

Slice, an Indian startup that offers payment cards with a marketing focus on young professionals, raised $220 million in a funding round led by Tiger Global and Insight Partners.

The financing sets a valuation of over $1 billion for the Bangalore-based company, which was founded in 2016. In addition to using its cards for payments, Slice also provides installment payment features and discounts at various merchants.

Funding rounds

Thought Machine picks up $200M: London-based Thought Machine, provider of a cloud-based banking technology platform for financial services customers, raised $200 million in a Series C funding round led by Nyca Partners. The round sets a valuation of over $1 billion for the seven-year-old company.

Motorway raises $190M: London-based Motorway, a used car marketplace, raised $190 million in a Series C round led by Index Ventures and ICONIQ Growth. Founded in 2017, the company has raised around $276 million in total funding to date, per Crunchbase data.

— Joanna Glasner

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Thought Machine picks up $200M: London-based Thought Machine, provider of a cloud-based banking technology platform for financial services customers, raised $200 million in a Series C funding round led by Nyca Partners. The round sets a valuation of over $1 billion for the seven-year-old company.

Source: https://news.crunchbase.com/news/briefing-11-29-21/

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The Week’s 10 Biggest Funding Rounds: Crypto Conglomerate Leads The Way, Self-Driving Car Startup Nuro Revs Up Big Round

No $1 billion round this week, but U.S.-based startups did manage to raise three rounds of more than a half-billion dollars, as investors remained attracted to the crypto market, self-driving cars and new, clean energy production

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This is a weekly feature that runs down the week’s top 10 funding rounds in the U.S. Check out last week’s entry here.

No $1 billion round this week, but U.S.-based startups did manage to raise a couple of rounds of a half-billion dollars or more, as investors remained attracted to self-driving cars, new, clean energy production and fintech.

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1. Nuro, $600M, autonomous cars: Mountain View, California-based self-driving car startup Nuro raised a $600 million Series D from investors including Google and Tiger Global Management. The new round of funding brings Nuro’s valuation up to $8.6 billion, TechCrunch reported. Nuro is designing a fleet of electric self-driving vehicles to transport packages. The investment from Google is noteworthy because it includes a partnership with Google Cloud—something important as it looks to deploy its fleets. Founded in 2016, the company has now raised more than $2 billion, according to Crunchbase data.

2. Helion Energy, $500M, energy: Everett, Washington-based Helion Energy raised $500 million in a Series E funding round led by Sam Altman. The fusion energy startup will use the cash to help complete the construction of Polaris, Helion’s seventh-generation fusion generator. The energy company is looking to produce low-cost around-the-clock power generation with a zero-carbon footprint. The funding includes an opportunity for an additional $1.7 billion tied to reaching performance milestones.

3. HoneyBook, $250M, fintech: The freelance market continues to expand and San Francisco-based HoneyBook closed a $250 million Series E round led by Tiger Global Management to help those in it manage their work better. The company’s platform helps both freelancers and independent business owners manage their customers—from their first interactions though invoicing and payment. Since being founded in 2013, the company has raised $498 million, according to Crunchbase data.

4. Treasure Data, $234M, data analytics: Companies are looking for any advantage they can get to drive better digital customer experiences. Mountain View, California-based customer data platform Treasure Data closed a $234 million investment led by SoftBank on the promise of just that. The company’s platform leverages customer data in an attempt to drive the best possible experiences while also protecting privacy.

5. Everlaw, $202M, legal tech: Oakland, California-based litigation platform Everlaw closed $202 million in a Series D led by TPG Growth at a $2 billion valuation. Everlaw has watched total cases on its platform more than double since its $62 million Series C in March 2020. Companies in the legaltech sector have seen increased interest from investors this year as the COVID-19 pandemic has forced more firms to adopt cloud-native technologies. Founded in 2010, the company has raised just less than $300 million to date, according to Crunchbase data.

6. When I Work, $200M, productivity tool: Minneapolis-based When I Work, provider of a platform for hourly workers and their employers to share, plan and track work schedules, has raised $200 million in a growth funding round backed by Bain Capital. Founded in 2010, the company previously raised at least $24 million in known funding and is currently profitable.

7. Plate IQ, $160M, fintech: San Francisco-based restaurant and hospitality payments platform PlateIQ raised a $160 million Series B.

8 to 10. We have a four-way tie for the last three spots this week, as San Francisco-based fintech platform Chipper Cash, San Diego-based hospitality platform Cloudbeds, Los Angeles-based video game engine Mythical Games, and Miami-based senior-assistance platform Papa all raised $150 million rounds.

Big global deals

U.S.-based startups dominated the largest rounds this past week, taking the top six spots. However, two China-based startups saw big funding rounds.

  • Autonomous driving startup Momenta closed a $200 million round.
  • Sugar-free and low-calorie beverage marker Genki Forest also closed a $200 million venture round.

Methodology

We tracked the largest rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of Oct. 30 to Nov. 5. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

Note: This story has been revised to reflect New York-based Digital Currency Group’s $700 million deal was a secondary offering and not a new fundraise.

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/biggest-vc-startup-funding-deals-digital-currency-group-nuro/

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The Briefing: Hailo Lands $136M Series C, SupportLogic Closes $50M Series B, and more

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

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Hailo lands $136M for AI chips

Tel Aviv-based Hailo, a startup developing AI accelerator chips for edge devices, announced that it raised $136 million in a Series C funding round led by Poalim and entrepreneur Gil Agmon. The round brings Hailo’s total funding to $224 million.

— Joanna Glasner

SupportLogic raises $50M Series B

San Jose -based SupportLogic closed a $50 million Series B funding round led by WestBridge Capital Partners and General Catalyst. Existing investors Sierra Ventures and Emergent Ventures also participated in the round.

SupportLogic’s AI-based platform allows businesses to act on customer communications in real-time in order to offer better customer service and support.

Founded in 2016, the company has raised approximately $62 million to date, according to Crunchbase data.

— Chris Metinko

SaaS

GitLab raises IPO range: San Francisco-based GitLab, a provider of development and collaboration tools for programmers, raised the proposed share price range for its upcoming IPO. The company now plans to raise around $700 million by offering 10.4 million shares at a price range of $66 to $69, up from the prior range of $55 to $60.

— Joanna Glasner

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/briefing-10-12-21/

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