Last week’s announcement that the enterprise capital firm Fearless Fund I’d do close grant competition for black women entrepreneurs as a part of a settlement of a discrimination lawsuit, the topic of funding for black founders is back in the public eye — especially after a recent low in 2023.
Looking at numbers from the first half of the 12 months doesn’t paint a higher picture for black founders trying to raise money this 12 months.
In the first half of 2024, Black-founded U.S. startups received $228 million in funding — about 0.3% of the nearly $79 billion that went to U.S. startups. The total dollar amount also represents a whopping 60% drop from the first half of last 12 months.
The first-half numbers are an improvement from the second half of last 12 months, when Black-founded startups raised just $123 million. However, in the second quarter of this 12 months, only $76 million was raised — the lowest amount since the third quarter of last 12 months, when these startups received just $47 million.
A pointy decline
Last 12 months, enterprise capital funding for black-founded startups in the U.S. fell sharply to only $699 million, marking the first time since 2016 that the total fell wanting $1 billion. Crunch Base show the data.
However, it was not until 2021 that American startups founded by black people earned $4.5 billion, and one other $2.5 billion the following 12 months.
While it’s true that 2021 and 2022 were record-breaking years, it is also price noting that each of those numbers represent greater than 1% of the total funding that U.S. startups received in those years — a significant increase from what we’re seeing now.
Deal flow also fell significantly. Black-founded startups in the U.S. saw just 28 funding deals in the second quarter—the lowest number in any quarter since at least 2019.
The total of 66 deals accomplished by Black founders in the first half of the 12 months is the lowest number in any six-month period since at least 2019 — and a sharp 53% drop in deals in comparison with the first half of 2023.
No single round topped $25 million in the first few months of the 12 months. By comparison, 22 U.S.-based startups raised greater than $25 million last week.
The largest funding rounds raised by Black founders in the first half of this 12 months, based on Crunchbase, were:
- Mountain View, California Flowlow-code visual app development platform, has raised $25.5 million in Series A funding led by Google Projects.
- Based in Atlanta Financial Inquirya platform offering transparency in financial, leasing and software contracts, has raised $25 million in a funding round led by Capital Periphas.
- Sacramento, California-based edtech startup Campus has closed a $23 million Series A round led by Founders Fund.
Even less
While total funding for Black founders was low last 12 months, this 12 months is on track to hitting its lowest point in a decade.
While last 12 months Black founders didn’t raise a combined $1 billion, this 12 months Black founders and startups are on track to boost lower than half a billion dollars. In fact, the combined total funding for Black founders in the second half of last 12 months and the first half of this 12 months is just $351 million.
Of course, a few large rounds in the second half of the 12 months could flip those numbers — but provided that deal flow for Black founders is also slowing to a snail’s pace, such rounds seem unlikely at this stage.
Methodology
The data in this report comes directly from Crunchbase and is based on reported data provided by our Diversity Spotlight partners, enterprise partners, our social network, and news sources. The data in this report focuses on the U.S. market for underrepresented minorities, namely Black/African-American-founded businesses.
The Crunchbase dataset is growing, but there are gaps. An organization may not have listed founders or the Diversity Spotlight data is probably not updated on its Crunchbase profile. We imagine we are missing corporations, especially in early funding stages.
If you notice any missing data, please contact us at [email protected] or confirm it via your organization email address to update your Diversity Spotlight tags directly on-site.
Crunchbase, like all private market transaction databases, has a documented pattern of reporting lags. Data for 2023 will increase over time in comparison with previous years. As data is added to Crunchbase over time, some of the numbers in this report may change.