Black founders in the UK are also seeing the impact of the venture’s winter year.
Black founders in the U.K. have raised just 0.95 percent of all venture capital funding in the country so far this year (or just $165 million out of an estimated $17.3 billion), according to new exhibition by Extend Ventures. That would put 2023 behind 2022, when such founders raised 1.02% ($316 million of $30.88 billion) and 2021, when Black founders accounted for 1.13% ($454 million of 40.03 billion dollars) of all venture capital investment in the country.
There is clearly a steady decline since 2020, the year George Floyd was murdered, prompting global support and pressure to support the black community. The downward trend in the share of investment going to Black founders likely stems from the downturn in venture capital over the past two years.
George Windsor, a data and research strategist who worked on the report, said that black people make up 2.5% of the UK population and that proper representation in the venture ecosystem would mean that at least 2.5% of funds would they go to Black-led businesses.
However, 0.95% is an achievement compared to the previous decade, which shows that progress is being made.
For example, black founders in the UK raised just 0.28% of venture capital in 2019, 0.23% in 2018 and 0.38% in 2017. According to Extend Ventures, between 2009 and 2019, only 38 have black founders been able to raise total venture capital in the country? that number now stands at 80.
Even black women are doing better. Between 2009 and 2019, Extend found just that a Black woman raised $1 million or more in venture funding. between 2019 and 2023, eight women had done so.
Windsor said the progress can be credited to a myriad of factors, including “increased awareness of racism, discrimination and inequality arising from the Black Lives Matter Movement and the killing of George Floyd.”
It helps that the UK has also seen less backlash against diversity, equality and inclusion initiatives than the US, Tom Adeyoola, co-founder of Extend, told TechCrunch.
“The UK is about slow and steady reform versus knee-jerk action, which can be perfunctory and without substance. The desire for change here is deep-rooted and focused on systemic action,” he said. “That said, if you look for anti-PPC rhetoric, you’ll find it in the debates about removing these roles from the public administration and in the headlines. I’m just not sure it’s caught the public’s attention, especially as report after report continues to reinforce how structural biases are costing the economy in lost growth.”
The Extend report also found that there has been a 100% increase in investors from minority backgrounds, although women of color still face challenges breaking into the industry.
Earlier this year, the UK Treasury Select Committee recognized the lack of investment in minorities and women in technology and looked at ways to increase it.
To maintain momentum, Adeyola says she will take on new initiatives and redouble existing efforts. “The data shows that it will be extremely important to track cohorts and catch companies that have been seed-funded and beyond,” he said. “We need to ensure that the right measures are in place at the levels that follow the companies.”
