It is tough doing business, even tougher staring at the present global economic realities, the plummeting economy of nations, devaluing national currencies and most importantly the rising global insecurity.
The impact of coronavirus on the world was felt by all and sundry – economies, businesses, health and our overall collective existence. The road to recovery will require extended and cohesive efforts from all.
Black Founded Startups
In the second quarter of 2022, the venture funding to Black-founded startups in the U.S. was $324 million – a steep drop from previous quarters amidst signs of progress and prospects.
Although funding to Black startup founders in the U.S. has always been tiny— at single-digit percentages year after year in terms of dollars invested in those companies. Quarter one was funding much higher, ranging between $850 million and $1.2 billion, according to Diversity Spotlight data.
Q2’s investment dollars fell drastically below the quarterly average since the first quarter of 2021.
This year’s funding plunge comes amid a general withdrawal in venture investment, venture dollar investors are now more conservative, and hence entrepreneurs are feeling the brunt.
Percentage Of Black Startups
Startups with at least one Black founder this year have so far received 1.9% of deal counts and 1.2% of overall venture dollars invested in the U.S. so far this year, Crunchbase data shows.
That’s in line with the tiny sliver of funding that has typically gone to startups with Black founders: Dollars invested have staggered between 0.8% and 1.3% since 2017 per year as a proportion of U.S. funding, according to Crunchbase data. Deal counts since 2017 have ranged slightly higher, between 1.8% and 2.6%.
Black Founder Startups In 2022
Two companies with a Black founder joined The Crunchbase Unicorn Board in 2022.
One of which is Virginia-based kidney-care company Somatus, which raised its $325 million Series E led by Wellington Management at a valuation of $2.5 billion. The company partners with primary care groups and health plans, and serves 150,000 members with its products.
The other is New York-based Esusu Financial, which raised a $130 million Series B led by the SoftBank Vision Fund that valued the company at $1 billion. The company helps renters build credit by capturing rental payment data. It reaches more than 2.5 million units across the U.S.
So far in 2022, $100 million has been invested in Black-founded U.S. startups at seed, $591 million at early-stage, and around $876 million at a later stage to 100 startups.
Black-founded startups are indeed struggling already in an uncertain venture environment in 2022, where investors are focused on their portfolio companies’ survival, which is not likely to improve.