Black-owned United Kingdom (U.K.) startups are unicorns — in more ways than one.
A recent report by CNBC revealed that for the first time in history, Black-owned startups in Britain are achieving the coveted unicorn valuation (that is, a private company with $1 billion or more in valuation). As of September 2021, there are more than 800 unicorn companies located around the world, according to CB Insights.
One of the startups that recently achieved that valuation is Marshmallow, a London-based digital insurance startup founded in 2017 by identical twins Oliver and Alexander Kent-Braham. The digital insurance platform is the second of Black-owned U.K. startups to achieve the coveted title. The first company to do so, Zepz, is a money-transfer firm that earned a $5 billion valuation back in August 2021.
And, much like in the United States, Black people in the United Kingdom find it difficult to entice investors to their startups (we’re not surprised).
“In the U.K., just 1.6% of venture capital funding went to all-ethnic founding teams between 2009 and 2019, according to Extend Ventures, while only 0.2% of funding went to Black entrepreneurs,” reports CNBC.
When Marshmallow got its additional funding, Oliver Kent-Braham said that it came mostly from existing investors.
“The number of times a VC said: ‘I wouldn’t respond to cold emails because you should be able to hustle and intro to me.’ It’s much easier to hustle and intro to you if you went to your university and you know a ton of people that know you,” he said to CNBC. “VCs really need to look broader.”
As the struggle for financial equity continues, venture capitalists need to continue to level the playing field, both in the United States and abroad. With Africa quickly becoming a hot commodity for fintech and other investors, there’s absolutely no reason why VC equity should be an ongoing problem.