Crunchbase is expanding the scope of its tagging options in Europe to start tracking how much venture capital funding goes to minority founders on the continent.
Diversity Spotlight is a feature on Crunchbase that lets companies add tags to their profiles to label themselves. For example, a company can opt-in to label itself as Black-owned or women-led. Crunchbase is now making this feature available in Europe.
I³ Investing, a firm that focuses on queer and migrant founders, served as the exclusive launch partner for the feature in the U.K. and Europe. Other partners include Female Founders, Tech Nation, Black Tech Fest, and Colorintech.
Crunchbase initially launched the Diversity Spotlight feature in 2020, and last year expanded it to add an LGBTQ+ tag. If the feature is used widely in Europe, it will hopefully bridge some of the gap in the data landscape and make it easier to find up-to-date information about how much venture capital funding goes to ethnic minorities.
In a blog post on Tuesday morning, Ryan Husk, Crunchbase’s director of business development and partnerships, said the goal is to “address systemic underfunding and discrimination based on race, ethnicity, and gender,” as well as “foster a more inclusive and equitable startup ecosystem.”
The latest data on venture funding to minorities in the U.K. shows similar patterns to that in the U.S.: Black founders in the U.K. receive less than 1% of the total venture capital invested in the country, according to a report by Extend Ventures. Moreover, it’s quite difficult to track ethnicity and race in certain countries, like France and Germany, meaning there is often little to no information on how much venture investment ethnic minorities actually receive.
Women globally, meanwhile, typically receive less than 2% of venture capital funding across the world. There have been some efforts in European countries to change this, such as some French firms pledging to the SISTA charter, but it’s no secret that there is much more work to be done.
The startup ecosystem in Europe seems excited about the feature. Vigile Hoareau, the French founder of startup Crowdaa, said any attempt to bring transparency into the market is good news. “It will help measure the bias in the investment landscape and also help some minority founders to position their companies and valuations based on facts and metrics,” he said.
More than 70,000 European companies have already added a diversity tag to their Crunchbase profiles. Those interested in following suit can do so here
