When tracking venture funding, a common lament is that Black and female founders raise a disproportionately tiny share of investment.
Out of $150 billion in U.S. venture investment last year, only $1 billion went to Black startup founders, which comes out to less than 1 percent of total funding, per Crunchbase data. Teams with at least one female founder, meanwhile, captured roughly 11 percent of venture funding.
So far this year, one area bucking that trend is funding rounds of $100 million and up to U.S. early stage companies. These so-called supergiant funding rounds represent a small but closely watched cohort, as companies that secure the largest early stage investments are most likely to form the next generation of unicorns and decacorns.
Data indicates that this founder group is a fairly diverse one. A Crunchbase survey of rounds of $100 million or more to U.S. companies at Series A and B stage between January and mid-February found that 30 percent of these investments went to teams with female or Black founders. In all, we counted 6 out of 20 in this small but influential club. They include:
- EQRx, a Cambridge, Massachusetts startup working to make affordable medicines for ailments that are commonly very expensive to treat, raised $500 million in a January Series B round backed by several prominent venture firms. One of its three named co-founders is Sandra Horning, MD, former global head of product development at Roche and Genentech.
- Calendly, an Atlanta-based company that develops an automated scheduling tool, raised $350 million in a January Series B led by OpenView. The company’s founder and CEO is Tope Awotona, a Nigerian immigrant who launched the app back in 2013.
- Day One Biopharmaceuticals, a South San Francisco-based biotech startup working on cancer therapies, with a focus on treatments for children, raised $130 million in a February Series B round. The company is co-founded by Julie Grant, a general partner at venture firm Canaan.
- Ikena Oncology, a Boston-based developer of immunometabolic therapies for cancer, raised $120 million in a January Series B round. It was co-founded in 2016 by Michelle Zhang, an entrepreneur-in-residence at Atlas Venture.
- Savage X Fenty, a lingerie brand founded by musician and fashion icon Robyn Rihanna Fenty (best known as Rihanna), pulled in $115 million in a February Series B round led by consumer-focused investor L Catterton.
- Fast, a San Francisco-based provider of secure, superfast checkouts for online purchases, raised $102 million in a January Series B round backed by Stripe. Its co-founder is Allison Barr Allen, former head of global product operations for Uber’s money team.
A month-and-a-half worth of venture rounds isn’t a huge dataset, so perhaps it’s sensible to avoid reading too much into the higher-than-usual inclusion of Black and female founders among the most heavily funded early stage companies. Still, it could be an early indication of broader shifts underway in the emerging ranks of top-funded founders.
The early 2021 numbers could be a sign that investors are paying more attention to deal flow from Black- and female-led teams. Or, it could be a recognition that some of the areas they’re working in – such as lowering prescription drug costs or marketing intimate apparel to women of all sizes and skin tones – represent large, under-invested markets.
Also, we would note that all of the founders mentioned above have established and impressive track records. Rihanna is by Forbes’ account the world’s wealthiest female musician, a global powerhouse in both the recording and fashion industries. Co-founders of the three biotechs listed above all have significant experience in industry or venture. Barr Allen, the co-founder of quick checkout startup Fast, had a major leadership role at Uber. And Calendly’s Awotona has been building engagement for his scheduling app since 2013.
Whether it’s a fluke or an early harbinger of more change afoot, proponents of a more diverse startup funding landscape should take some encouragement about where many of the largest early rounds are going. While Black and female entrepreneurs are still under-represented in startup funding tallies, at least there’s some sign of progress.
To see in months ahead if this is a continuing trend, we’ll be keeping tabs and reporting back.