Crunchbase is expanding its tagging options in Europe to begin tracking how much venture capital funding is going to minority founders on the continent.
Diversity Spotlight is a feature on Crunchbase that allows companies to tag their profiles to highlight themselves. For example, a company may choose to describe itself as Black-owned or women-led. Crunchbase is now making this feature available in Europe.
I³ Investing, a company that focuses on queer and immigrant founders, served as the exclusive release partner for the UK and European run. Other partners include Female Founders, Tech Nation, Black Tech Fest and Colorintech.
Crunchbase first launched its Diversity Spotlight feature in 2020 and last year expanded it to add an LGBTQ+ tag. If the feature is widely used in Europe, it will hopefully bridge some of the gap in the data landscape and make it easier to find up-to-date information on how much venture capital funding is going to ethnic minorities.
In a blog post on Tuesday morning, Ryan Husk, Crunchbase’s director of business development and partnerships, said the goal is to “address systemic underfunding and discrimination based on race, ethnicity, and gender,” as well as “promote a more inclusive and fair startup ecosystem”.
The latest figures on minority venture funding in the UK show similar patterns to those in the US: Black founders in the UK receive less than 1% of all venture capital invested in the country, according to a report by Extend Ventures. Furthermore, it is quite difficult to track nationality and race in some countries, such as France and Germany, which means that there is often little to no information about how much venture capital ethnic minorities actually receive.
Women worldwide, meanwhile, usually receive less than 2% venture capital financing around the world. There have been some efforts in European countries to change this, such as some French companies promising to join the SISTA charter, but it is no secret that much more work needs to be done.
The startup ecosystem in Europe seems excited about the feature. Vigile Hoareau, the French founder of startup Crowdaa, said any effort to bring transparency to the market is good news. “It will help measure bias in the investment landscape and also help some minority founders position their companies and valuations based on facts and metrics,” he said.
More than 70,000 US companies have already added a differentiation tag to their Crunchbase profiles. Those interested in following may do so here.
This story has been updated to reflect how many companies have added diversity tags to their Crunchbase profiles.
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