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British early-stage venture firm Black Seed has raised £5 million ($6.2 million) as part of its inaugural fund to solely support Black founders in the country. The round was led by asset manager M&G Investments, with additional support from Atomico and Molten Ventures. The firm is hoping to raise an additional £5 million to close the round.

Black Seed was launched to address the lack of funding Black founders receive in the U.K., according to its founders: Karl Lokko, Cyril Lutterodt and founding member Yvonne Nagawa. Black founders in the country received only 0.24% of all VC funds between 2009 and 2019, and only 10 Black British women were able even to raise at all, according to a report by Extend Ventures. That’s worse in some ways than in the United States.

The dismal lack of funding has historically led to Black British talent leaving the country for the U.S. seeking funding opportunities. Lokko and Lutterodt said the firm also wants to address the fact that 88% of Black businesses in the U.K. are self-funded, and they want to decrease that number to at least 50%.

“We exist as a tech fund and a community,” Lokko said. “We exist to bridge that gap and give Black founders inclusion.”

Lutterodt said that the firm wants to cut to the chase by writing checks to help bring about change, as many Black founders in the U.K. are overmentored yet underfunded. “We have built a pipeline of Black entrepreneurs, primed and ready,” he said, adding that the firm expects to make at least 10 investments over the next three years and has a reserve fund for follow-on investments.

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 — or, as they say in the U.K., the “Bank of Mum and Dad.” It is one of a handful of funds that exist in the U.K. that focus solely on Black founders. Black Seed is industry agnostic, though Lutterodt says it’s particularly interested in deep tech, health care and AI.

Black Seed also hosts events at its office in Brixton, the south London neighborhood known for its Afro-Caribbean population. The firm 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.

“We actually overestimated how long it would take to get £5 million worth of commitments,” Nagawa, who also serves as Black Seed’s chief of staff, told TechCrunch+. “It only took us six months to hit that figure. What we underestimated was the length of time it would then take to complete the legal side of things and the paperwork. It was a reminder of the complicated factors you face when raising a fund.”

Venture firm Black Seed raises £5M inaugural fund to invest in Black founders by Dominic-Madori Davis originally published on TechCrunch