Black Seed launches fund to back black British startup founders, holds first close at £5 million

We all know black entrepreneurs, like women, have a ridiculously lower chance of raising venture capital for their startups than white people.

We even know the percentage over in the UK thanks to research from Extend Ventures: only 0.24% of funding made its way to black founders in the UK in the last decade.

And thanks to Atomico's research efforts, we also know people of colour feel pretty much left out in general. With the abysmal above stat in consideration, is it any wonder? 

Change is coming though, however slowly.

Last year, Unconventional Ventures raised a new fund of €30 million to invest in underrepresented founders across Europe, while Google set up a fresh $4 million fund targeting black European tech startup founders.

Today, a new fund called Black Seed is announcing that it has raised £5 million for its inaugural £10 million fund to invest in black British founders.

Well-known UK-based VC firms such as Atomico, LocalGlobe and Molten Ventures participated in bankrolling the new fund, alongside WestRiver Group.

Asset management firm M&G took care of leading the round, which also includes contributions from angel investors such as Sam Branson, Dorothy Chou and Lord Mervyn Davies.

Black Seed was established as a fund for black entrepreneurs by Karl Lokko and Cyril Lutterodt in 2021, when the two men found that black British founders were, in their words, "over-mentored and under-funded". They were later joined by Yvonne Nagawa, who took the role of Chief of Staff at the fledgling investment firm.

Partnering with VC platform Vauban enabled Black Seed to get to first close, alongside the fund's community events. They also received support from various partners, including Hogan Lovells, NatWest and Milltown Partners.

The firm says it is not only building a fund, but creating a veritable community of black entrepreneurs and a "pipeline" with the ambition of "nurturing black talent for the benefit of the entire tech and investor ecosystem".

One entrepreneur Black Seed is already working with is Gabriel Makinwa, founder and CEO of GigBridge, an online application connecting construction workers with relevant jobs.

Makinwa said: “Black founders like me are not short on advice. What’s missing is the access to capital to help us grow our businesses, employ people and pioneer the tech-enabled enterprises that will shape the future.”

Saul Klein, partner at Phoenix Court Group (which LocalGlobe is a part of), said:

“We’re delighted to be supporting Black Seed with the first close of their inaugural fund. For too long, venture capital has remained a closed-off, exclusive club and that has had a negative impact on the types of products that get built."

"It’s not enough to try to right these wrongs with more money, new funds like Black Seed, as well as the entrepreneurs they will back, need to have access to best practices and networks too in order to build up and nurture black talent. We’re excited for the potential of Black Seed and look forward to working closely with Karl and Cyril to empower an underrepresented generation of innovators,” Klein added.