Bloomberg Línea — Latinas and Black women are among the fastest growing groups of entrepreneurs in the United States, with their businesses generating revenues of $190.9 billion and employing seven million people, according to Project Diane research conducted by digitalundivided.
This growth is aided by the discrimination suffered by these women, which leads them to create their own opportunities, allowing them to enter sectors and hierarchical positions that were denied to them.
“Despite these challenges, many Black and Latina businesses are not only resilient in the face of adversity, but are thriving. Black and Latina women are leading the record number of small businesses and startups launched since the pandemic. These founders are building businesses in an increasingly diverse range of industries and leveraging the resources of friends and family, personal savings, bank loans, crowdsourcing campaigns, angel investors and venture capital firms,” the research says.
The report surveyed 750 Latina and black female founders who received external funding, although this represents only 0.85% of all venture capital in 2022.
It also found that there are now more than 350 Black and Latina founders who have raised at least $1 million in funding.
Which are the Black- and Latina-founded unicorns in the US?
According to Project Diane, nine startups founded by Black and Latina women have become unicorns, achieving a $1-billion-or-more valuation.
Among them are:
- Honeybook, founded by Shadiah Sigala
A first-generation Mexican immigrant, Shadiah Sigala cofounded HoneyBook, a tech platform for financial management for small companies. The company was valued at more than $2 billion in 2021.
- Incredible Health, founded by Iman Abuzeid
Incredible Health was launched in 2017 by Iman Abuzeid and Rome Portlock. The startup connects nurses and medical professionals with hospital jobs.
In 2022, Incredible Health announced an $80 million Series B funding round, which gave the company a valuation of $1.65 million, according to Fortune. In total, the startup has raised $97.3 million in funding, according to a report by Harlem Capital and Crunchbase.
In 2021, the number of private companies valued at more than $1 billion doubled, with 519 new unicorns emerging in that year alone. And although that year was hailed as the “year of the decacorn” (companies with a valuation of $10 billion or more), there was still no startup founded by a Latina or black woman reaching this status.
While the diversification of industries is broad, health and wellness is the segment receiving the most funding since the pandemic, with $1.3 billion invested since 2020.
Five companies founded by Latina or black women in this sector have raised more than $100 million. They are:
- Cityblock Health, founded by Toyin Ajavi and Iyah Romm
Toyin Ajayi co-founded Cityblock Health with Iyah Romm in 2017. The company aims to provide medical and healthcare services to underserved communities.
Cityblock Health first achieved unicorn status in December 2020 through a $160 million Series C funding round. In September 2021, it closed a $400 million Series D led by SoftBank, boosting the company’s valuation to $5.7 billion . To date, the company has raised nearly $900 million in financing.
- Stoke Therapeutics, founded by Isabel Aznarez
Isabel Aznarez is co-founder, senior vice president and chief biology officer of Stoke Therapeutics, a biotechnology company she founded in 2014 with Adrian Krainer. The company is pioneering a new way to treat the underlying causes of serious diseases by precisely regulating protein expression.
In 2019 it filed for an initial offering at a valuation of $2.16 billion according to Insider, which also notes that as a Nasdaq-listed company, the company’s valuation ebbs and flows. Its last valuation was $360 million
- Aura Biosciences: A biotechnology company created by Elisabet de los Pinos from Catalonia, Spain. Its objective is the development of drugs through the use of pseudovirions targeting tumors.
- Eight Sleep: The startup created by Mexico’s Alexandra Zatarain together with Andrea Ballarini, Massimo Andreasi Bassi and Matteo Franceschetti, makes smart mattresses and mattress covers that use machine learning and other AI-based algorithms to improve sleep by changing temperature and monitoring other physical parameters to provide an overall picture of your health.
- Health IQ: Alexandra Marshall, of Mexican descent, is co-founder of Health IQ, a company that offers insurance to vegetarians, yogis and runners. It has raised $81.5 million in funding.
In 2022, health and wellness startups continued to be the most-funded startups, followed by education and financial services startups.
“A significant portion of the funding for health and wellness companies can be attributed to “femtech” startups that cater to the biological and health needs of women. These companies have created innovative products and services that address historical inequalities and gender-based exclusion within the healthcare system. The women’s technology market is expected to reach $50 billion by 2025″, says the report.
What are the challenges for female Black and Latina entrepreneurs?
Black and Latina women have a greater interest in technology than others in the United States, but represent fewer than 3% of the technology workforce. In this area, 85% of Latina and Black women experienced discrimination, and nearly one-third of underrepresented women of color were turned down for a promotion, more than any other group.
However, the main challenge they face is access to capital to run their businesses.
“These funding disparities have been exacerbated by the pandemic, which has disproportionately affected minority-owned businesses. Eighty-two percent of black women founders suffered a loss of revenue due to the pandemic. Operating on smaller margins and having fewer relationships with banks, 41% of black-owned businesses and 32% of Latino-owned businesses closed in the early days of the pandemic.
