A Barber, an Accountant, and a Makeup Artist Walk into a Bar(ely) Diverse Industry
By Jackie Carmel, Managing Director, Endeavor Catalyst
As we ushered in 2021, we predicted (and hoped) that underrepresented founders would be better represented in the US tech community this year. Thanks to groups like AllRaise, BLCK VC, Lightship Capital, Collab Capital, Base10 Partners, and Backstage Capital, as well as new initiatives from industry leaders ranging from a16z to Flybridge to Softbank, the movement to back more BIPOC and female founders continues to build momentum.
We sure hope the momentum continues, because while 2020 closed out with record amounts of capital raised by US companies ($100+ billion), only $1 billion - less than 1% - of that capital went to Black or African American founders, Crunchbase reports. At Endeavor Catalyst, we did a bit better with 28% of capital invested in the US going towards companies with Black or African American founders. Meanwhile, teams with at least one female founder captured roughly 11% of venture funding globally last year, with Endeavor Catalyst funding for this cohort in line at 12%. So, what do barbershops, lease accounting, call centers, consumer lending, and lipstick have in common? Read on to find out.
Squire
If the global pandemic has taught us anything, it’s that most of us should not be cutting hair. They say distance makes the hair grow longer...or is it the heart grow fonder? In this case, it’s both - the US population missed its barbers during the shutdown. Like many personal care specialists, barbers were particularly hard-hit by the COVID-related closures. When allowed to safely reopen, barbers were concerned with how to safely get back in business.
Enter Squire, a barbershop management and POS/booking mobile application that connects barbers and clients nationwide. Founded in 2015 by Dave Salvant and Songe LaRon, Squire closed a $59 million funding round led by Iconiq in December 2020. Its timely funding, and years of experience in the space, positioned the company nicely to help barbers get back on their feet and comply with new regulations. In an effort to not further burden the barbershops, Squire decided to waive subscription fees for shops that signed on with the service.
Squire allows patrons to book appointments via its mobile app, and a virtual waiting room allows patrons to wait outside or in their cars until the barber is ready for them. The Squire app handles all payments, reducing the time patrons need to linger inside the shop and eliminating the need to exchange currency or credit cards. With more than 2,000 barbershops using Squire, the company is showing some impressive growth and shows no signs of slowing down, especially amidst the pent-up demand for barbers created by the pandemic.
LeaseQuery
Have you ever been obsessed with a problem? If so, it may be time to start a company. In 2011, George Azih knew the lease accounting industry had a problem. “My top advice to those starting their own business, no matter the industry, is to find a problem you’re obsessed with and then find your solution,” George has said. A financial authority specializing in technical accounting and accounting research, George knew he had both the passion and expertise to fix it.
Enter LeaseQuery, a CPA-approved software that helps accountants and finance professionals eliminate lease accounting errors. In November 2019, the company announced a $40 million Series A fundraising through Goldman Sachs’ merchant banking division. Today, LeaseQuery is one of Atlanta’s fastest-growing companies.
Chime Solutions
The COVID pandemic has wreaked havoc on the entire US workforce, but it has had an outsized effect on Black Americans, particularly women.
Enter Chime Solutions, a US-based provider of customer contact services. Mark Wilson, co-founder and CEO of Chime Solutions, has made it his mission to create opportunities in under-resourced communities and facilitate economic mobility. To achieve this, Mark set a goal of creating 10,000 jobs across 10 cities — all in communities with a significant Black population.
With nearly 3,000 employees and counting, the company is one of the largest and fastest-growing minority-owned businesses, having been founded in 2016 by Mark and his wife, Shelly Wilson, the company’s chief operating officer. In late October 2020, the company announced that it closed on a $30 million recapitalization investment with BBH Capital Partners, the private investing arm of Brown Brothers Harriman & Co. Proceeds from the raise are being used to support Chime's core business and its mission of having a positive economic and social impact in underserved communities across the country.
SoLo Funds
If faced with an unexpected $400 bill, about 40% of Americans would struggle to come up with the cash - even before the pandemic. Their options? Sell something or go into debt...often in the form of predatory loans.
Enter SoLo Funds, a peer-to-peer short-term lending platform and alternative to predatory financing options like payday loans, founded by Rodney Williams and Travis Holoway, the duo behind the ultrasonic authentication service LISNR. SoLo’s immediate purpose is to provide users quick access to capital in a pinch, but the ultimate goal is to create a virtuous cycle, in which borrowers ultimately become lenders on the platform.
Since the pandemic began, SoLo Funds has seen revenue growth of 40% month over month, and the platform currently has 100,000 monthly active users. This month, SoLo Funds announced a $10M Series A led by ACME Capital.
The Lip Bar (rebranding as TLB Beauty)
The global pandemic has inspired many to try new things in the kitchen; did someone say banana bread? But in 2012, long before the global pandemic, Melissa Butler started making vegan lipsticks in her kitchen, frustrated by the lack of inclusive, high-quality, and reasonably priced cosmetics available.
Enter The Lip Bar, a vegan and cruelty-free luxury cosmetic brand made to flatter a variety of skin tones, founded by Melissa Butler. Many might know The Lip Bar as the lipstick company famously rejected by the sharks on Shark Tank back in 2015. But Melissa turned rejection into opportunity and continued to follow her dreams and intuition. The Lip Bar boasts an all-female team and its products are now available in over 1,000 stores nationwide.
So, what do barbershops, lease accounting, call centers, consumer lending, and lipstick have in common? These traditional businesses are being completely transformed by technology, with all-star Black or African American and female founders in the Endeavor portfolio at the helm.
And while it’s too soon to reach any conclusions about the venture capital landscape this year, funding rounds of $100 million+ to early-stage US companies in January and February have actually been pretty diverse, with 30% of these investments going to teams with Black or female founders. These “supergiant” funding rounds garner a fair amount of attention, as companies that secure the largest early-stage investments are most likely to become the next generation of unicorns and decacorns. We love to see it, and we’ll take it as a positive sign that change is underway.
Jackie Carmel is the Managing Director of Endeavor Catalyst, an innovative, rules-based co-investment fund through which Endeavor invests into its portfolio companies in emerging and underserved markets. You can reach Jackie on LinkedIn here.
