By Brooke Sinclair
- Supply chain tech startups raised $24.3B in venture funding in the first three quarters of 2021
- Funding for Black founders has not sustainably moved past the 2% mark
Before Covid, there were only a handful of investors who understood logistics or were comfortable investing in supply chain platforms and now the tides are shifting. Supply chain tech startups raised $24.3 billion in venture funding during the first three quarters of 2021, according to Pitchbook. A huge influx of cash gives startups in the once-overlooked sector access to capital to build out their businesses, but many Black led supply-chain companies are getting left behind.
Why This Matters: Silicon Valley investors are no longer confused about what supply chain is or why it is important. The average pre-money valuation for late-stage supply-chain tech companies reached $120 million in the third quarter of 2021. The money is out there for supply chain founders but the experience of Black-led companies getting capital has been tough.
“Good companies are simply raising much, much more money,” said Julian Counihan, general partner at Schematic Ventures, a San Francisco based venture capital firm.
Even with a warm introduction from a BLCK VC Series A investor during the height of Black Office Hours after George Floyd’s murder, I (a Black supply-chain tech founder) was still unable to get a zoom meeting with Counihan after he read my LinkedIn profile.
Big investment funds are pumping money into logistics technology at a rapid pace, driving up valuations, but funding for Black founders has not sustainably moved past the 2% mark and we were unable to find a single Black tech founder in Schematic Ventures’ portfolio.
Situational Awareness: “[The billions of free-flowing dollars] created an enormous amount of growth capital and access to capital for the top companies,” said Jake Medwell, a founding partner at Austin, Texas venture capital firm 8VC to the Wall Street Journal. There’s nearly no reason to believe venture capital funding for Black founders would ever exceed 5% of venture capital funding.
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