Despite obstacles, minority-run businesses thrive in the UK

Black founders in the UK are also seeing the impact of venture’s winter year. That would put 2023 behind 2022, when such founders raised 1.02% ($316 million of $30.88 billion), and 2021, when Black founders were allocated 1.13% ($454 million out of $40.03 billion) of all venture investment in the country. The downward trend in the share of investment allocated to Black founders most likely stems from the venture downturn of these past two years. For example, Black founders in the U.K. raised only 0.28% of venture funds in 2019, 0.23% in 2018, and 0.38% in 2017. Per Extend Ventures, between 2009 and 2019, only 38 Black founders were able to raise venture funding at all in the country; that number now stands at 80.

According to a recent report by Extend Ventures, Black founders in the United Kingdom are experiencing the effects of the current “venture’s winter year.” This year, Black founders in the UK have only received 0.95% of all venture investment, totaling a mere $165 million out of a total $17.3 billion. This is significantly lower than last year, when Black founders raised 1.02% ($316 million) out of $30.88 billion, and in 2021, when they received 1.13% ($454 million) out of a total $40.03 billion. These numbers suggest a consistent decline in funding for Black founders since 2020, the year of George Floyd’s tragic murder, which sparked a global movement to support the Black community. This decrease in investment for Black founders is likely a result of the overall downturn in venture funding during these past two years.

George Windsor, a data and research strategist involved in the report, stated that Black people make up 2.5% of the UK’s population. However, in order for there to be proper representation in the venture ecosystem, at least 2.5% of funds should be allocated to Black-led businesses. While the current 0.95% may seem like a small growth, it is significant progress when compared to the previous decade.

Between 2009 and 2019, only 38 Black founders in the UK were able to secure venture funding. However, this number has now doubled to 80 founders.

Even more noteworthy is the increased success of Black women in the industry. In the previous decade, only one Black woman was able to raise $1 million or more in venture funding. However, in the years 2019-2023, a total of eight women have achieved this milestone.

According to Windsor, this positive shift can be attributed to various factors, including “heightened awareness of racism, discrimination, and inequality raised by the Black Lives Matter Movement and the murder of George Floyd.” Interestingly, the UK has faced less resistance towards diversity, equity, and inclusion initiatives than the United States. Tom Adeyoola, co-founder of Extend, shared with TechCrunch, “The UK is all about slow and steady reform over knee-jerk action, which can be performative and without substance. The desire for change here is deep-rooted and focused on systemic action.” However, he also acknowledged that there is still anti-DEI rhetoric present in discussions about diversity roles, but it has not yet captured the public’s attention.

The Extend report also highlighted a 100% increase in minority groups becoming investors, although women of color still face challenges in breaking into the industry. Earlier this year, the UK Treasury Select Committee addressed the issue of minority and female underrepresentation in tech and began exploring ways to increase diversity in the industry.

To continue this positive progress, Adeyola believes it will require new initiatives and a dedication to current efforts. He states, “The data shows that it will be hugely important to track cohorts and catch the companies that have been funded at the early stage and beyond. We need to ensure that the right measures are in place at the levels that follow companies through.”

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Zara Khan

Zara Khan is a seasoned investigative journalist with a focus on social justice issues. She has won numerous awards for her groundbreaking reporting and has a reputation for fearlessly exposing wrongdoing.

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