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When Arian Simone was trying to open her own retail store, it didn’t take long for her to notice that nobody cutting the checks looked like her—a Black woman.
“I was sitting on the floor before the grand opening, in the midst of hangers and clothes, and I told myself: Arian, don’t you even worry, because one day you will be the business investor that you were looking for,” Simone tells me.
Now she and her partner, Ayana Parsons, are doing exactly that. The two women launched a venture capital firm in 2019, dubbed the Fearless Fund, specifically geared at investing in early-stage startups run by women of color.
The firm recently closed its first fund with $25 million in capital from investors including MasterCard, Bank of America, Ally Bank, and others. Most recently, J.P. Morgan Asset Management committed $2.5 million to the firm’s investment thesis: To back promising startups founded by women of color.
The Fearless Fund has already used that cash to invest somewhere between $250,000 to $1 million in 20 companies across the U.S., spanning CapWay, a next generation mobile banking company, to Range Beauty, a beauty product manufacturer. After two years of fundraising for that first fund, the Fearless Fund is out seeking new capital again, this time with expectations to raise more than $100 million and having to limit its number of LPs, Simone says.
The reason, Simone argues, is sheer opportunity within this demographic. “This is the largest pool of untapped talent that you can possibly invest in,” Simone says.
Initial research shows that the fail rate for minority-run businesses is actually significantly lower than the average startup. Companies founded by Black or Latina women in 2018 had a fail rate of 27%, compared to the national 40% average, per the 2018 ProjectDiane report, authored by digitalundivided. Here’s an anecdotal example: 97.5% of the startups run by Black women in 1863 Ventures’ accelerator program survived the pandemic, managing partner Melissa Bradley said at Fortune’s Most Powerful Women conference last year, compared to a 40% overall decline in Black business owners during the pandemic.
Meanwhile, the median seed funding raised by a Black woman founder is $125,000—a fraction of the national median of $2.5 million in 2020, according to ProjectDiane. In the first half of 2021, Crunchbase data showed a mere 0.34% of capital went to businesses run by Black women in the first half of 2021.
While the pool of cash going to minority-run businesses is small, the pipeline of ideas is immense—and growing, according to Desiree Vargas Wrigley, executive director at TechRise by P33, an initiative focused on supporting historically underrepresented tech founders in Chicago. TechRise started a weekly pitch competition in 2021 specifically for Black or Latino founders that runs between April and November. Local angel investors and VCs in the Chicago area had told her the organization would struggle to fill those weekly meetings. “Within three weeks, we had 180 applicants,” Wrigley says.
More initiatives are emerging in an effort to get capital into the hands of Black women, or people of color in general, such as the Goldman Sachs’ One Million Black Women initiative. If you ask Simone, the money can’t come in fast enough.
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See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
VENTURE DEALS
– Animoca Brands, a Hong Kong-based digital property rights company for the metaverse that utilizes NFTs and gaming, raised $358.9 million in funding led by Liberty City Ventures and was joined by investors including 10T Holdings, C Ventures, Delta Fund, Gemini Frontier Fund, Gobi Partners Greater Bay Area, Kingsway, and L2 Capital.
– Bolt, a San Francisco-based checkout and shopper network company, raised $355 million in Series E funding led by BlackRock and was joined by investors including Schonfeld, Invus Opportunities, H.I.G. Growth, and CE Innovation Capital.
– Exotec, a Croix, France-based global warehouse robotics company, raised $335 million in Series D funding led by Goldman Sachs Asset Management and was joined by investors including 83North and Dell Technologies Capital.
– Lukka, a New York-based crypto-asset software and data provider, raised $110 million in Series E funding led by Marshall Wace and was joined by investors including Miami International Holdings, Summer Capital, SiriusPoint, Soros Fund Management, Liberty City Ventures, S&P Global, and CPA.com.
– Rain, a cryptocurrency brokerage and custodian for the Middle East, raised $110 million in Series B funding co-led by Paradigm and Kleiner Perkins and was joined by investors including Coinbase Ventures, Global Founders Capital, MEVP, Cadenza Ventures, JIMCO, and CMT Digital.
– INDmoney, a Gurgaon, India-based AI and machine learning-based wealth management and advisory app, raised $75 million in Series D funding from investors including Steadview Capital, Tiger Global, and Dragoneer Investment Group.
– Pinwheel, a New York-based API platform developer that helps employers reduce payroll taxes, raised $50 million in Series B funding led by GGV Capital and was joined by investors including Coatue, First Round Capital, Upfront Ventures, AMEX Ventures, Indeed, Kraken Ventures, and Franklin Templeton.
– Arya, a Delhi, India-based agri-commerce platform, raised $46 million in Series C funding from Asia Impact SA, Lightrock India, and Quona Capital.
– Fermata Energy, a Charlottesville, Va.-based vehicle-to-everything (V2X) technology services provider, raised $40 million in funding led by Carlyle Strategic investors and was joined by investors including Verizon Ventures.
– Vertical Future, a London-based vertical farming system developer, raised £21 million ($29 million) in Series A funding from Pula Investments, Gregory Nasmyth, Nickleby Capital, Dyfan Investment, and SFC Capital.
– Juro, a London-based contract automation platform for legal counsel, raised $23 million in Series B funding led by Eight Roads and was joined by investors including Union Square Ventures, Point Nine Capital, Seedcamp, and Wise co-founder Taavet Hinrikus.
– Faeth Therapeutics, an Oakland, Calif.-based healthcare company that uses machine learning-driven precision nutrition solutions and treatment regimens to enhance cancer therapy, raised $20 million in seed funding co-led by Khosla Ventures and Future Ventures and was joined by investors including S2G Ventures, Digitalis, KdT Ventures, Agfunder, Cantos, and Unshackled.
– 7bridges, a London-based logistics engine optimization platform, raised $17 million in funding led by Eight Roads and was joined by Local Globe and Crane VC.
– FitLab, a Newport Beach, Calif.-based fitness studios and at-home event platform, raised $15 million in Series A funding, bringing total capital raised to more than $15 million from investors including Two Styx Capital, CAVA Capital, Snoop Ventures, Audie Attar of Paradigm Sports Management, and Courtney Reum of M13.
– Verica, a Fairfax, Va.-based continuous verification system developer, raised $12 million in Series A funding led by Intel Capital, and was joined by investors including True Ventures and Mango Capital.
– ValueBlue, a Utrecht, Netherlands-based SaaS collaboration platform provider for business process management, raised $11 million in Series B funding led by Octopus Ventures and Newion and was joined by ABN AMRO.
– Permiso, a Palo Alto, Calif.-based startup that provides cloud identity detection and response for cloud infrastructures, raised $10 million in seed funding led by Point72 Ventures and was joined by investors including Foundation Capital, Work-Bench, 11.2 Capital, Rain Capital, former Netflix VP of Information Security Jason Chan, and Hashicorp Chief Security Officer Talha Tariq.
– Burnt Finance, a decentralized NFT auction protocol built on Solana, raised $8 million in Series A funding led by Animoca Brands and was joined by investors including Multicoin Capital, Alameda Research, DeFiance Capital, Valor Capital Group, Figment, Spartan Capital, and Tribe Capital.
– Yuvo Health, a New York-based administrative and managed-care solution for community health centers, raised $7.3 million in seed funding led by AlleyCorp and was joined by investors including AV8 Ventures, New York Ventures, Brooklyn Bridge Ventures, and Dr. Melynda Barnes.
– Chatdesk, a New York-based customer experience app developer, raised $7 million in Series A funding led by Cultivation Capital and was joined by investors including Harlem Capital, Serena Ventures, Menlo Ventures, Stormbreaker, and Fika Ventures.
– Origin, an Amsterdam-based personalized luxury travel app, raised $5 million in funding led by Project A.
– True Tickets, a Boston, Mass.-based mobile ticket distribution company, raised $5 million in seed funding from Logitix, which is backed by ZMC.
– Zowie, a Dover, Del.-based no-code customer service solution for e-commerce companies, raised $5 million in seed funding co-led by Gradient Ventures and 10x.
– Cloaked, a Boston-based privacy software developer, raised $4 million in seed funding led by Human Capital and was joined by investors including General Catalyst, Peter Thiel, Lux Capital, Index Ventures, Next Play Ventures, All Turtles, and the Mantis Fund.
– Mustard, an Aliso Viejo, Calif.-based AI sports coaching application, raised $3.8 million in seed funding led by the Lake Nona Sports & Health Tech Fund and was joined by investors including Mark Cuban, OneTeam Partners, Ronnie Lott, Justin Rose, the Major League Soccer Players Association, the United States Women’s National (Soccer) Team Players Association, and Global Rugby Ventures.
– Anonybit, a Wilmington, Del.-based biometric identification platform, raised $3.5 million in funding led by Switch Ventures and was joined by investors including NextGen Venture Partners, Industry Ventures, and Preceptor Capital.
PRIVATE EQUITY
– China Cinda Asset Management withdrew plans to acquire a 20% stake in Ant Group‘s consumer finance division for $944 million, per Reuters.
– Ardian agreed to acquire a majority stake of Biofarma Group, an Italian medical device developer, manufacturer, and packaging company, from White Bridge Investments for $1.3 billion, per Reuters. The Scarpa family maintains a 30% stake in the company. Financial terms were not disclosed.
– Mayfair Equity Partners acquired a majority stake in LoopMe, a London-based mobile advertising platform, for $120 million.
– Hero Motocorp agreed to invest up to 4.20 billion rupees ($56.7 million) in Ather Energy, a Bengaluru, India-based two-wheeler electric vehicle manufacturer.
– Carlyle invested in NineDot, a New York-based clean-tech developer that designs and deploys community-scale energy generation and battery storage projects. Financial terms were not disclosed.
– NMI, backed by Francisco Partners, Great Hill Partners, and Insight Partners, acquired IRIS CRM, a Brooklyn, N.Y.-based merchant services CRM and merchant management platform serving clients in the payments industry. Financial terms were not disclosed.
– Susquehanna Private Capital acquired a majority stake in Soccer Shots, a Middletown, Penn.-based youth soccer franchisor which provides children ages two through eight training programs. Financial terms were not disclosed.
EXITS
– Stellex Capital Management acquired Peltram Plumbing Holdings, a plumbing installation and service solutions provider, from Crescendo Capital Partners and other investors. Financial terms were not disclosed.
OTHER
– Atlantia SpA agreed to acquire Yunex Traffic, Siemens’ road traffic unit, for $1.1 billion, including debt.
– CI&T agreed to acquire Somo Global, a U.K.-based independent digital product agency. Financial terms were not disclosed.
– Furhat Robotics acquired Misty Robotics, a Boulder, Colo.-based personal robot developer. Financial terms were not disclosed.
– GTreasury acquired Hedge Trackers, a San Jose, Calif.-based accounting, consulting, and software services provider. Financial terms were not disclosed.
– Mars agreed to acquire Nom Nom, a Nashville, Tenn.-based pet subscription meal plan company. Financial terms were not disclosed.
IPOS
– Genesys, a Daly City, Calif.-based call center technology company, selected underwriters for an IPO, per Bloomberg. A deal could value the company at more than $30 billion. Permira and Hellman & Friedman own the firm.
– Oyo Hotels, an Indian budget hotel company, is weighing an IPO, per Bloomberg. A deal could value the company at around $9 billion. SoftBank backs the firm.
– Basis Global Technologies, a Chicago-based cloud-based workflow automation and business intelligence software company for marketing and advertising functions, filed for an IPO. The company reported $361.9 million in total revenue in the nine months ending in Sep. 2021 and $27.1 million in net income. FTV Capital backs the firm.
– DESRI, a New York-based renewable energy infrastructure, filed for an IPO. The company posted $168.9 million in revenue in the nine months ending in Sep. 2021 and $146.9 million in net income. The D. E. Shaw Group backs the firm.
– Credo Technology Group Holding, a San Jose, Calif.-based connectivity solutions provider, and its shareholders plan to raise up to $300 million in an offering of 25 million shares (6.5% sold by insiders) priced between $10 to $12 per share. The company posted total revenue of $58.7 million in the year ending in April 2021 and reported a net loss of $27.5 million. Celesta Capital backs the firm.
– REV Renewables, a New York-based energy storage and renewables generation assets operations company, filed for an IPO. The company reported $11.3 million in revenue for the nine months ending in Sep. 2021 and $53.6 million in net losses. SK E&S backs the firm.
– Arcellx, a Gaithersburg, Md.-based cell therapy company that develops immunotherapies for patients with cancer and other incurable diseases, filed for an IPO. The company reported a net loss of $44.3 million in the nine months ending in Sep. 2021 and has yet to post revenue. New Enterprise Associates, Novo Holdings, Quan Capital, and Takeda Ventures back the firm.
SPAC
– ProKidney, a Winston-Salem, N.C.-based medical technology company, agreed to go public via a merger with Social Capital Suvretta Holdings Corp. III, a SPAC backed by Social Capital and Suvretta Capital. A deal values the company at $2.6 billion.
FUNDS + FUNDS OF FUNDS
– Blossom Capital, a London-based venture capital firm, raised $432 million for its third fund, which is focused on Series A investments in European founders.
PEOPLE
– GPI Capital, a New York-based growth and structured equity investment firm, promoted Philip Lo to partner of investor relations and business development, Chris Kim to principal of investments, Liam Burrell to principal of investments, and John Reising to vice president of investments.
– Thrive Capital, a New York-based venture capital firm, hired Nitin Nohria as partner and Executive Chairman. He was formerly dean of Harvard Business School.
Financial Services
