Black Seed, a British early-stage venture firm, has raised £5 million ($6.2 million) as part of its inaugural fund to solely support Black founders in the country. The firm hopes to raise an additional £5 million to close the round. The round was led by asset manager M&G Investments, with additional support from Atomico and Molten Ventures.
Black Seed was launched to address the lack of funding Black founders receive in the UK. The company aims to provide an opportunity for Black entrepreneurs to succeed in the tech industry. Black founders in the UK received only 0.24% of all VC funds between 2009 and 2019, according to a report by Extend Ventures. Only 10 Black British women were able to raise funds in that period, which is worse than the statistics in the US.
This dismal lack of funding has led to Black British talent leaving the country for the US seeking funding opportunities. Black Seed strives to address the fact that 88% of Black-owned businesses in the UK are self-funded. The company hopes to decrease that number to at least 50%.
We exist as a tech fund and a community, said Karl Lokko, one of the founding members of Black Seed. We exist to bridge that gap and give Black founders inclusion. Cyril Lutterodt added that the firm aims to help bring about change by writing checks to black entrepreneurs. The firm plans to make at least 10 investments over the next three years and has a reserve fund for follow-on investments.
Black Seed is industry agnostic, but the founders are particularly interested in deep tech, healthcare, and AI. The firm will focus on early-stage investing, serving as a kind of family and friends round for those who lack access to angel investors. Black Seed is one of a handful of funds operating in the UK that focuses solely on Black founders.
The company hosts events at its office in Brixton, the south London neighborhood known for its Afro-Caribbean population. Black Seed organizes the Brixton Startup Weekend as well as the pitch competition Lyan’s Den.
Launched in 2021, the firm was initially supposed to announce the £5 million raise late last year, but it ran into delays concerning regulatory compliance. However, Nagawa, who is one of the founding members of Black Seed, said it only took them six months to hit their target. The team had overestimated how long it would take to get the commitments, and they underestimated the legal procedures involved.
