Last week’s announcement that venture capital firm Fearless Fund would close a grant contest for Black women business owners as part of a settlement in a lawsuit alleging discrimination once again brought the topic of funding to Black founders back to the public eye — especially after its recent low in 2023.

A look at the first half of the year numbers will not paint a better picture for Black founders looking to raise money this year.

In the first half of 2024, Black-founded U.S. startups received $228 million in funding — or about .3% of the nearly $79 billion that went to U.S.-based startups. The dollar total also represents a whopping 60% drop from H1 of last year.

The first half numbers are an improvement from the second half of last year, which saw only $123 million raised by Black-founded startups. However, Q2 this year saw only $76 million raised — the lowest amount since Q3 last year when only $47 million went to such startups.

Sharp decline

Last year, venture funding to Black-founded U.S. startups cratered — totaling only $699 million and marking the first time since 2016 that the figure failed to even reach $1 billion, Crunchbase data shows.

However, it was just in 2021 when Black-founded U.S. startups reeled in $4.5 billion, and followed up the next year with another $2.5 billion.

While it is true 2021 and 2022 were record-setting years, it also is worth pointing out that both those numbers represent more than 1% of the total funding U.S. startups saw those years — a significant increase over what is being witnessed now.

Deal flow also is down significantly. In Q2, Black-founded U.S. startups saw only 28 funding deals — the lowest total of any quarter since at least 2019.

The 66 total deals completed in the first half of the year by Black founders also is the lowest total for any half of a year since at least 2019 — and a precipitous 53% drop in deals from H1 2023.

No single round topped more than $25 million in the first months of the year. To put that in perspective, 22 U.S.-based startups each raised more than $25 million just last week.

The largest rounds in H1 of this year by Black founders according to Crunchbase were:

• Mountain View, California-based FlutterFlow, a low-code, visual application development platform, raised a $25.5 million Series A led by Google Ventures.
• Atlanta-based FinQuery, a platform that offers transparency into financial contracts, leases and software agreements, raised a $25 million round led by Periphas Capital.
• Sacramento, California-based edtech startup Campus locked up a $23 million Series A led by Founders Fund.

Even less

Although last year’s funding totals for Black founders was low, this year is on pace to set a new nadir for such funding in the past decade or so.

While last year did not see Black founders raise $1 billion in total, this year such founders and startups are on pace to raise less than even half-a-billion dollars. In fact, the combined total of funding to Black founders in the second half of last year and the first half this year is only $351 million.

Of course a few big rounds in the second half of the year could flip those numbers — but with deal flow also slowing to a crawl for Black founders, such rounds seem unlikely at this point.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data provided by our Diversity Spotlight partners, venture partners, our community network and news sources. The data in this report is focused on the U.S. market for underrepresented minorities, namely Black-/African-American-founded companies.

Crunchbase’s dataset is constantly expanding, but there are gaps. A company may not have founders listed, or the Diversity Spotlight data may not be updated on its Crunchbase profile. We do believe we are missing companies, especially at the early stages of funding.

If you notice missing data please reach out to [email protected] or verify with your company email to update your company’s Diversity Spotlight tags directly onsite.

Crunchbase, like all databases of private-market transactions, has a documented pattern of reporting delays. The data for 2023 will increase over time relative to previous years. As data is added to Crunchbase over time, some of the numbers in this report may shift.

Related reading:

• Drop In Venture Funding To Black-Founded Startups Greatly Outpaces Market Decline

Illustration: Dom Guzman