What pipeline problem? - Extend Ventures newsletter (BHM edition)
By Rahmon Agbaje and Maatin Adewunmi
2020 has been a memorable year to say the least. A year filled with trauma but also triumph. We’ve seen the black community come together in the midst of genuine crisis. Powerful cultural moments require brave leaders and selfless people who are willing to sacrifice their positions for the greater good and we’ve experienced this across the board from the worlds of business, entertainment and culture.
As founders and scouts, we have personally experienced the trials and tribulations of the startup world but now regularly dedicate our time and resources to supporting early-stage black tech founders. This includes supporting Extend Venture’s vision of connecting the black business ecosystem and showing through data just how much money is left on the table by not investing in underrepresented founders.
The common response when the lack of investment into black founders is highlighted is that there’s ‘a pipeline problem.’ So, in this edition of our newsletter, and in the spirit of Black History Month, we wanted to debunk this myth by highlighting the incredible achievements of five early-stage black founders in 2020. In spite of the unprecedented challenges we have all faced this year, we have heard some incredible stories of innovation and resilience.
A new wave
Being a black person in the business world can often be challenging. However, there is a new wave of founders undertaking this journey who are energised by these challenges and looking to disrupt traditional industries.
One example is 22-year old Faruk Ojikutu, the founder of Weld, a one-stop-shop digital platform for all things car-related, from mechanic parts to insurance to inspection.
Faruk has a powerful story. In his first year of university, he was involved in a serious car accident when he was hit by a drunk driver. Fortunately, he escaped unscathed. “What happened to me that night showed me that I’m definitely here for a real reason,” he says.
Faruk invested some of the money from his accident insurance claim into his first motor business and has been on an incredible journey ever since. While achieving a first in his Accounting and Finance degree, he has successfully partnered with mechanic shops across the UK who see his app as a novel way of reaching customers in more locations. Fully bootstrapped and a recent graduate from the Startup Discovery School, Faruk is ready to scale his proposition and is now at the start of the fundraising journey.
The experience of running a business is often compared to having a child. But what about those who actually have children while running a business full time?
Meet Marie Farmer, mother to a five-year-old son and founder of Mini Mealtimes, a family nutrition app recommending healthy meals for time-starved parents through personalised reports and easy recipes. The app helps young parents combat childhood obesity and excessive sugar consumption.
Marie saw a problem that many working mothers have around child nutrition, which inspired her to build her own platform to tackle the problem.
She speaks candidly about being a black female founder. “I love running my company. Being the driving force behind it means I get to be proud of the positive impact we've had and will continue to have,” she says. “But the stats are not encouraging. The amount of funding female minority founders get is miniscule and it's not because our businesses aren't of a high quality. I've worked with or watched some amazing black entrepreneurs who are only just getting the recognition they deserve.”
Despite the odds, Marie continues to press on and is proud of her business achievements, which include winning the Prince’s Trust Best New Business Idea Award, as well as being featured in two national newspapers this year.
Music and markets
The representation of black people in the music and entertainment industries has been a hot topic in 2020. Young black talent over-index in their representation as artists but are very rarely the owners of record labels or their own intellectual property for that matter. Earlier this year, Kanye West spoke out against the exploitative record industry model, which rarely gives black artists any ownership of their masters.
This was the topic of one of our first conversations with Deborah Igunma, founder of music platform Clef, a marketplace where fans can buy and sell stock in their favourite emerging musicians.
A unique blend of music and fintech, the Clef app aims to start a revolution by bringing artists closer to their fans by allowing them to leverage their brand. Through this new marketplace, fans can invest in the potential they see in an artist.
The app also enables artists to diversify their income, helping them reduce their reliance on traditional revenue streams such as live concerts, which have taken a big hit during the Covid-19 pandemic.
Deborah’s achievements this year include winning £5,000 grant funding from the Mayor of London after successfully pitching Clef to a panel of investors from Backed VC, 500 Startups, Backstage Capital and other firms.
The creator economy
Young founders are often praised for their personal brands, ability to start social trends and build communities online. There are few founders we know who utilise the Twitter platform more effectively than Lotanna Ezeike, founder of the XPO app, an ad exchange platform for the creator economy where brands can bid for ad space on an influencer’s profile. He built the platform after struggling to book a musician for an appearance at a university event a few years ago but now has UK rapper Krept on his cap table.
Whether it’s challenging investors to a game of chess on Twitter, calling out brands to improve their diversity strategy online or crafting clever social media posts to spark debates about his product and services, Lotanna has mastered the art of grabbing an audience's attention and driving them to his cause.
2020 has been full of many wins for Lotanna. His startup raised capital at a £2 million valuation, and he has facilitated over £150,000 in transactions through his app. He has even expanded his services to include invoice financing for brands and influencers, having partnered with Sonovate, a company which has completed over £1.5 billion worth of invoice financing.
Global meets local
Mariam Jimoh a former investment banker, got her start in entrepreneurship when she founded the Women in the City Afro-Caribbean Network (WCAN), a social enterprise dedicated to the personal and professional development of black women who have ambitions of working in the City. WCAN has now been running for 7 years and has helped countless women launch their careers.
Now Mariam’s next challenge is pivoting from social entrepreneur to tech entrepreneur with the creation of Oja, an online grocery delivery platform for ethnic produce.
Oja aims to transform access to cultural and ethnic groceries by connecting local stores to customers via fast and eco-friendly delivery. Think of them as the Ocado for ethnic and specialist foods! With their platform, they’re transforming how local stores are managed - digitising their operations, bringing them online and expanding their reach through delivery.
Despite a difficult period during the pandemic, Oja have built a great team of advisors, onboarded 13 stores and expanded their offering to over 3,000 products. They are excited for their trial launch later this month.
Changing the narrative
By celebrating and investing in black founders, we can begin to change the narrative. As a community, we should encourage, support and find inspiration from those who take the brave step of starting an early-stage business. By highlighting the biggest wins from some less well-covered founders in our network, we hope to show that there is not a black business pipeline problem, though this is often the reason given for the tiny share of VC funding underrepresented founders receive.
We would love to hear some of your biggest business wins and continue this movement by sharing the achievements of black people in the business world.
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