Startup Funds for Minority Women Triple in Two Years
In a promising sign of progress toward leveling the playing field for minority entrepreneurs, a new study shows startups run by Black and Latinx women raised $3.1 billion in 2020, triple the outside funding raised just two years ago.
Digital undivided, a nonprofit group that’s been tracking startups founded by Black and Latinx women for two years, found the number of Black and Latinx female founders who raised more than $1 million in venture capital has also surged since 2018. Through August, 93 Black women founders and 90 Latinx women founders in the group’s database had reached that benchmark, compared to 34 Black women and 45 Latinx women in 2018, Digital undivided said in study findings released Wednesday.
While the increases are encouraging, Digital undivided said there’s still a large funding gap for female entrepreneurs of color. The median “seed funding” for Black and Latinx women founders was $479,000—far less than the $2.5 million median for all startups. Meanwhile, before the pandemic, Black women were starting 763 businesses a day, making them the fastest entrepreneurial group in the country, according to a study commissioned by American Express.
“There is still a long way to go to provide these founders with the capital needed to scale their businesses and to move the needle on funding parity,” Digital undivided wrote in its report.