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Black Women Still Receive Just A Tiny Fraction Of VC Funding Despite 5-Year High

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Editor’s note: This article is part of Something Ventured, an ongoing series by Crunchbase News examining diversity and access to capital in the venture-backed startup ecosystem. As part of this series on venture funding to Black entrepreneurs, we also look at how venture funding to Black startup founders has grown over the past year and at Georgia, the state that invests the highest percentage of its VC funding into Black entrepreneurs. Access the full Something Ventured project here


Joanna Smith, the founder of edtech startup AllHere, recently raised an $8 million Series A after bootstrapping her company first. A former middle school math teacher, Smith opted to go through two accelerator programs to learn how to pitch investors and develop a repeatable sales and operational process.

“The hardest part is, honestly, access to the network,” Smith said of building her company. “Prior to when I started my company, my frame of reference was teaching 6th and 8th grade math. I had a strong network of customers, but not a strong network in Silicon Valley. And I didn’t have any personal experience as an investor. And I think sometimes access plays a role in a founders’ capability to raise.” 

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Smith is a Black woman and her company is one of a still tiny but growing number of startups led by Black women to raise venture funding.

Joanna Smith, founder of AllHere

While Black female startup founders have received just 0.34 percent of the total venture capital spent in the U.S. so far this year — a far cry from being representative — the dollars invested in their companies is on the rise, an analysis of Crunchbase data shows.

Venture funding to U.S. startups led by Black women is on track to outpace the past five years, according to Crunchbase data. Startups with at least one Black woman as a founder have raised around $494 million so far in 2021, already surpassing the $484 million raised in all of 2020, according to our data. 

Notably, Black women are better represented in the subset of funded Black founders than women in general are among all the funded startups in the U.S. About one-third of funding to Black startup founders every year goes to companies led by Black women, while funding to female founders overall is consistently in the single-digit percentages. 

The data also shows that by funding round count, 40.5 percent of funding to Black founders in 2020 went to Black women. On the flip side, that figure also suggests that the amounts raised by Black women in a funding round tend to be on the smaller side.

The ‘Valley of Death’

Many funding deals to Black women founders happen at the pre-seed or seed level, but there needs to be more investment in subsequent rounds, according to Samer Yousif, chief of staff at BLCK VC, an organization that aims to increase representation of Black investors in venture capital. 

“There’s this valley of death between the seed and Series A,” Yousif said. 

He added that the investor landscape needs to change before we’ll see significant improvement in the levels of funding to Black women founders. That doesn’t just mean more analysts or associates of color at venture firms, but also more general partners who are able to write larger checks.

Funding to U.S. companies led by Black founders reached $1.8 billion in the first half of 2021, per Crunchbase data. That half-year total already eclipses the total funding to Black founders for all of 2018, which was previously the highest year. 

But, it should be noted that the increase in funding to Black entrepreneurs coincides with an increase in venture funding in general. The dollar amount of funding to Black founders is up, but still represents just 1.2 percent of the record $147 billion in venture capital invested in U.S. startups through the first half of this year. 

“There’s a combination of efforts to increase access to capital and nonfinancial resources to get Black women and BIPOC founders ready for investment and ready to build and grow their businesses,” said Bahiyah Yasmeen Robinson, founder of VC Include, a community of diverse and woman-led fund managers and limited partners. “Some of the things I think that have supported that acceleration are Black and Brown specific accelerators and incubators like Camelback and Founder Gym and others. I deeply believe there needs to be more of those types of programs that are also supported by capital.” 

The number of incubators for minority founders is starting to increase, but it’s not increasing fast enough, Robinson said. 

“We don’t have enough best-in-class programs to attack the problem at scale, especially company investments as well as nondilutive capital,” she said, adding that the other component is making sure that fund managers of color are also capitalized to invest in market opportunities. 

If there are more well-capitalized fund managers of color, Robinson believes, access to capital for underrepresented founders will increase as well. VC Include’s mission is to increase investment in diverse emerging managers.

For the majority of fund managers of color who don’t have a diversity lens in their strategy, 30 percent to 50 percent include women and people of color in their portfolio — simply because they’re good companies to invest in, Robinson said of the funds VC Include has engaged with.

Relationships matter

At the end of the day, venture is still a relationship-driven industry, according to Fatima Dicko, CEO of proptech startup Sugar, which recently raised $2.5 million in funding. 

For more Black women to get funded, established investors need to be advocates for underrepresented founders, she said: “For some of these well-established firms, don’t just write the check, don’t just meet with the founder, be the voice that brings other checks into the round.”

Dicko pointed to an August 2020 DocSend data report that found potential investors spent 50 percent more time scrutinizing the “Traction” section — the slide that details milestones and growth metrics of the company — of all-female teams’ pitch decks than they did of all-male teams’ pitch decks. That could be interpreted to mean that women have to prove more to be given a chance.

Implicit bias is a tricky thing, Dicko noted. And it shows itself in different ways. 

“While it is important to have that momentum and come to the table with having done something even without the funding, I do think that the expectations can differ, for sure, of what’s considered early or not,” Dicko said. 

“I think it would be interesting to do some research into who gets funded at the idea stage,” she added.

In Smith’s case, accelerators — especially those that don’t take equity — were instrumental in her ability to raise money, she said.

“Definitely programs that focus on that training and that network, I think, are critical,” she said. “I’ve found those programs to be helpful when they’re equity-free for those founders and companies taking part in them. Whenever those programs are partners with commitments to fund companies once they go through those programs, it’s even better.”

Illustration: Dom Guzman

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Source: https://news.crunchbase.com/news/something-ventured-black-women-founders/

Start Ups

Telehealth giant Amwell to acquire Portland healthtech startup Conversa

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National telehealth provider Amwell said it will acquire Portland, Ore.-based healthtech startup Conversa and SilverCloud Health.

Conversa, founded in 2014, sells platforms tailored to different medical conditions that allow medical teams to communicate with patients remotely. The company raised $8 million at the beginning of this year, after COVID-19 generated increased need for the service.

Conversa also helps medical providers automate text-based conversations and other administrative tasks before, during and after patients check in to medical care.

Amwell said it will use Conversa’s patient profiling and engagement tools to boost client experience and outcomes.

Murray Brozinksy, CEO of Conversa Health, said the deal will help “usher in the hybrid care delivery model of the future.”

Amwell said it paid approximately $320 million in stock and cash to acquire Conversa and SilverCloud, a digital platform that caters to mental healthcare. The transaction is expected to close at the end of the third quarter.

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Source: https://www.geekwire.com/2021/telehealth-giant-amwell-acquire-portland-healthtech-startup-conversa/

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Egyptian ride-sharing company Swvl plans to go public in a $1.5B SPAC merger

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Cairo and Dubai-based ride-sharing company Swvl plans to go public in a merger with special purpose acquisition company Queen’s Gambit Growth Capital, Swvl said Tuesday. The deal will see Swvl valued at roughly $1.5 billion.

Swvl was founded by Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah in 2017. The trio started the company as a bus-hailing service in Egypt and other ride-sharing services in emerging markets with fragmented public transportation.

Its services, mainly bus-hailing, enables users to make intra-state journeys by booking seats on buses running a fixed route. This is pocket-friendly for residents in these markets compared to single-rider options and helps reduce emissions (Swvl claims it has prevented over 240 million pounds of carbon emission since inception).

After its Egypt launch, Swvl expanded to Kenya, Pakistan, Jordan and Saudi Arabia. The company also moved its headquarters to Dubai as part of its strategy to become a global company.

Swvl offerings have expanded beyond bus-hailing services. Now, the company offers inter-city rides, car ride-sharing, and corporate services across the 10 cities it operates in across Africa and the Middle East.

Queen’s Gambit, the women-led SPAC in charge of the deal, raised $300 million in January and added $45 million via an underwriters’ overallotment option focusing on startups in clean energy, healthcare and mobility sectors.

The statement also mentions a group of investors — Agility, Luxor Capital and Zain Group — which will contribute $100 million through a private investment in public equity, or PIPE.

Per Crunchbase, Swvl has raised over $170 million. From an African perspective, Swvl features as one of the most venture-backed startups on the continent. The company has been touted to reach unicorn status in the past and will when this SPAC merger is completed.

The company will aptly trade under the ticker SWVL. The listing will make it the first Egyptian startup to go public outside Egypt and the second to go public after Fawry. It will also make the mobility company the largest African unicorn debut on any U.S.-listed exchange, beating Jumia’s debut of $1.1 billion on the NYSE. Swvl joins music-streaming platform Anghami as the second startup in the region to go public via a SPAC merger in the Middle East.

Swvl had annual gross revenue of $26 million in 2020, according to the statement, and the company expects its annual gross revenue to increase to $79 million this year and $1 billion by 2025 after expanding to 20 countries across five continents.

On why Queen’s Gambit picked Swvl for this deal, Victoria Grace, founder and CEO, said in a statement that the company fit the profile of what she was looking for: “a disruptive platform that solves complex challenges and empowers underserved populations.”

“Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” she added.

In May, TechCrunch wrote that SPACs didn’t target African startups for several reasons, including a lack of global appeal and private capital and market satisfaction. Judging by Grace’s comments, Swvl has that global appeal and is ready to venture into the public market despite being in operation for just four years.

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Source: https://techcrunch.com/2021/07/28/egyptian-ride-sharing-company-swvl-plans-to-go-public-in-a-1-5b-spac-merger/

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Egyptian ride-sharing company Swvl plans to go public in a $1.5B SPAC merger

Published

on

Cairo and Dubai-based ride-sharing company Swvl plans to go public in a merger with special purpose acquisition company Queen’s Gambit Growth Capital, Swvl said Tuesday. The deal will see Swvl valued at roughly $1.5 billion.

Swvl was founded by Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah in 2017. The trio started the company as a bus-hailing service in Egypt and other ride-sharing services in emerging markets with fragmented public transportation.

Its services, mainly bus-hailing, enables users to make intra-state journeys by booking seats on buses running a fixed route. This is pocket-friendly for residents in these markets compared to single-rider options and helps reduce emissions (Swvl claims it has prevented over 240 million pounds of carbon emission since inception).

After its Egypt launch, Swvl expanded to Kenya, Pakistan, Jordan and Saudi Arabia. The company also moved its headquarters to Dubai as part of its strategy to become a global company.

Swvl offerings have expanded beyond bus-hailing services. Now, the company offers inter-city rides, car ride-sharing, and corporate services across the 10 cities it operates in across Africa and the Middle East.

Queen’s Gambit, the women-led SPAC in charge of the deal, raised $300 million in January and added $45 million via an underwriters’ overallotment option focusing on startups in clean energy, healthcare and mobility sectors.

The statement also mentions a group of investors — Agility, Luxor Capital and Zain Group — which will contribute $100 million through a private investment in public equity, or PIPE.

Per Crunchbase, Swvl has raised over $170 million. From an African perspective, Swvl features as one of the most venture-backed startups on the continent. The company has been touted to reach unicorn status in the past and will when this SPAC merger is completed.

The company will aptly trade under the ticker SWVL. The listing will make it the first Egyptian startup to go public outside Egypt and the second to go public after Fawry. It will also make the mobility company the largest African unicorn debut on any U.S.-listed exchange, beating Jumia’s debut of $1.1 billion on the NYSE. Swvl joins music-streaming platform Anghami as the second startup in the region to go public via a SPAC merger in the Middle East.

Swvl had annual gross revenue of $26 million in 2020, according to the statement, and the company expects its annual gross revenue to increase to $79 million this year and $1 billion by 2025 after expanding to 20 countries across five continents.

On why Queen’s Gambit picked Swvl for this deal, Victoria Grace, founder and CEO, said in a statement that the company fit the profile of what she was looking for: “a disruptive platform that solves complex challenges and empowers underserved populations.”

“Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” she added.

In May, TechCrunch wrote that SPACs didn’t target African startups for several reasons, including a lack of global appeal and private capital and market satisfaction. Judging by Grace’s comments, Swvl has that global appeal and is ready to venture into the public market despite being in operation for just four years.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://techcrunch.com/2021/07/28/egyptian-ride-sharing-company-swvl-plans-to-go-public-in-a-1-5b-spac-merger/

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Microsoft acquires Seattle startup Suplari, which uses AI to analyze corporate spending

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Suplari co-founders Jeff Gerber, Brian White, and Nikesh Parekh. (Suplari Photo)

Microsoft has acquired Suplari, a Seattle startup that uses artificial intelligence to help companies understand and get a handle on their spending.

Founded in 2016, Suplari analyzes procurement and spending data flowing into various enterprise systems. It can provide recommendations for cost savings, risk exposure, and other efficiency gaps. The software serves as an alternative to compiling data in an app such as Excel or Tableau and having a team of analysts comb through the information themselves. Suplari manages more than $180 billion in spend across millions of transactions per month.

Microsoft said it will pair Suplari with Microsoft Dynamics 365 “to help customers maximize financial visibility by using AI to automate the analysis of current data and historical patterns from multiple data sources.”

“Today’s announcement also signals our continued commitment to enabling organizations to move beyond transactional financial management to proactive operations that enhance decision making, mitigate risks, and reduce supplier costs through our data-first approach,” Microsoft vice president Frank Weigel wrote in a blog post.

Terms of the deal were not disclosed. Suplari said its “Suplari Spend Intelligence Cloud” will continue to remain available for existing customers.

Suplari is among a bevy of startups using artificial intelligence and machine learning to automate manual processes involving tons of data, and provide recommendations based on the computer-aided number crunching. There are several companies in Seattle applying similar technology in various industries, such as AttunelyLexionSigma IQ, and others.

Suplari had raised $18 million to date, according to PitchBook. Investors include Amplify Partners, Madrona Venture Group, Shasta Ventures, Two Sigma Ventures, and Workday Ventures.

The company was co-founded by Jeff Gerber, Brian White, and Nikesh Parekh, Suplari’s CEO.

Parekh is a real estate technology veteran who previously held leadership positions at Market Leader and Trulia. Gerber is a long-time engineering leader who co-founded startups including iConclude (acquired by Opsware and later by HP) and helped lead Apptio’s machine learning and intelligent app development. White worked with Gerber at iConclude as an early employee and did stints at Amazon Web Services and Skytap.

Parekh said Microsoft and Suplari have had partnership discussions over the past several years.

“Given Microsoft’s AI, cloud and data investments, customers can expect that Suplari will continue to deliver more AI-driven, predictive & prescriptive insights and integrated workflows for finance, procurement, & supply chain teams,” he wrote in a blog post.

The deal is the latest in a string of IPOs, fundings, and acquisitions across the Seattle startup ecosystem. Earlier this week Seattle startup Algorithmia was acquired by DataRobot.

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Source: https://www.geekwire.com/2021/microsoft-acquires-seattle-startup-suplari-uses-ai-analyze-corporate-spending/

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