Black founders in the U.K. are also seeing the impact of venture’s winter year.
Black founders in the United Kingdom raised only 0.95% of all venture investment allocated in the country so far this year (or just $165 million out of around $17.3 billion), according to a new report 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 were allocated 1.13% ($454 million out of $40.03 billion) of all venture investment in the country.
There’s clearly been a consistent decline since 2020, the year George Floyd was murdered, spurring global support and pressure to support the Black community. The downward trend in the share of investment allocated to Black founders most likely stems from the venture downturn of these past two years.
George Windsor, a data and research strategist who worked on the report, said Black people make up 2.5% of the U.K.’s population, and that proper representation in the venture ecosystem would mean at least 2.5% of funds going to Black-led businesses.
Still, 0.95% is an achievement compared to the decade prior, showing that progress is being made.
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.
Even Black women are doing better. Between 2009 and 2019, Extend found that only one 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 myriad factors, including “heightened awareness of racism, discrimination, and inequality raised by the Black Lives Matter Movement and the murder of George Floyd.”
It helps that the U.K. also has seen less backlash against diversity, equity and inclusion initiatives than in the U.S., Tom Adeyoola, co-founder of Extend, told TechCrunch.
“The U.K. 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,” he said. “That said, if you look for anti-DEI rhetoric, you will find it in discussions about removing these roles from the civil service and in newspaper headlines. I’m just not sure it has captured the public’s attention, especially since report after report keeps reinforcing how much structural biases cost the economy in lost growth.”
The Extend report also found that there has been a 100% increase in people from minority backgrounds becoming investors, although women of color still find themselves facing challenges breaking into the industry.
Earlier this year, the U.K. Treasury Select Committee acknowledged the lack of investment in minorities and women in tech, and pondered ways to help increase it.
To keep the momentum going, Adeyoola says it’ll take new initiatives and doubling down on existing efforts. “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,” he said. “We need to ensure that the right measures are in place at the levels that follow companies through.”