Early-stage investor Black Seed has raised £5 million ($6.25 million) with aims to create a Black Silicon Valley in London.
The South London-based venture firm raised the money as an inaugural fund to invest in and support Black founders by investing in seed-stage startups.
Founders Karl Lokko, Cyril Lutterodt, and founding member Yvonne Nagawa launched Black Seed to address the lack of funding Black founders receive in the UK.
According to Techcrunch, the firm will focus on early-stage investing, serving as a kind of “family and friends” round for those who lack access to angel investors.
Is there funding for Black British founders currently?
According to an Extend Ventures report, between 2009 and 2019, Black founders in the country received only 0.24% of all VC funds, and only 1 in 10 Black British women could even raise at all.
These figures undoubtedly resulted in Black British talent leaving the country for the US.
Founder, Lutterodt was rejected for funding in the UK for a different business, despite going through 10 accelerators and more than 100 VC pitches.
He told Business Insider “We’ve been through these statistics personally, so we know that experience.”
“Founding a business is hard, but being a Black founder is harder, but we believe this is a huge opportunity in a nascent market.”
Black Seed founders also addressed that 88% of Black businesses in the UK are self-funded, and they aim to decrease the number to at least 50%.
Global ambitions
This round of funding was led by asset manager M&G Investments, with additional support from Atomico and Molten Ventures.
The firm hopes to raise an additional £5 million ($6.25 million) to close the round.
According to its website, Black Seed’s 5-year vision is backing 30 Black-led startups from the Black Seed program by 2026 across the UK.
They want to offer more than just funding by providing office space and a community to founders in London and Manchester.
With offices purposely situated in Brixton, south London, an area with a rich African Caribbean history, the team is there to put out the bat signal for Black founders.
“We exist to make the Black Silicon Valley, which our cross-Atlantic cousins haven’t pulled off yet,” Lokko told Business Insider.
“We aim to shoot for as high as possible; others will come in on our building blocks and community endorsement.”
It is one of a handful of funds in the UK that focus solely on Black founders
