A venture capital firm dedicated to supporting Black tech businesses has secured $20 million in funding, according to its latest announcement.
Announced in late March, the VF firm, known as BKR Capital, has raised $20 million CAD, or $14.5 million U.S. dollars, as part of its second fund. The company aims to reach a total of $50 million by the end of the year. Support for the funds was provided by multiple institutions, including the Royal Bank of Canada, Export Development Canada and Business Development Bank of Canada.
With the funds, BKR Capital will continue to invest in tech startups, particularly those with diverse teams and that are Black-owned. Although the venture capital firms typically provides monetary assistance to companies within Canada, approximately 10% of their portfolio will go towards other startups around the world.
Since its inception in 2021, BKR Capital, formerly known as Black Innovation Capital, has supported a number of companies. With the first fund, the venture capital firm invested in approximately 15 tech companies, distributing over $22 million. The companies assisted include digital health startup company Moneta Health and cybersecurity site Protexxa.
“These innovators are working on problems that affect everybody,” said Managing Partner Lise Birikundavyi per The Globe and Mail. “We believe we played a key role in making sure they were able to bring their innovation to the world.”
In Canada, only a small percentage of VC funds go to Black-owned businesses. According to a report released last year by the Canadian Women’s Chamber of Commerce, only about 1% of VC funds go to BIPOC entrepreneurs overall. Women and disabled BIPOC entrepreneurs are amongst the demographics that are least likely to obtain funding. More than 80% of overall BIPOC entrepreneurs rely on their own savings to fund their startup.
Despite these challenges, BIPOC-owned businesses grew by approximately 12% from 2019 to 2021, accounting for nearly 29% of all businesses in Canada. Black women are driving a majority of these openings, accounting for 33% of women-owned businesses in the country.
To address the low rate of assistance for Black-owned businesses, the Canadian Women’s Chamber of Commerce recommended increased loan programs designed specifically for Black-owned businesses, inclusive training programs and outreach programs.
The organization also recommended big changes to legislation, including removing any structural barriers, implementing mandated data collections and making sure any government-based programs are created equally.
