Jane Lanhee Lee

OAKLAND (Reuters) – Black and Hispanic tech startup funding ticked up in Florida and Georgia this year, following an influx of investors fleeing California and efforts by some venture capitalists to focus on minority founders in the wake of George Floyd’s killing.

Technology has been long criticized for not paying attention to Latino and Black founders. The improvement in this area was met with caution. Floyd’s passing sparked national protests about how people of color are treated in various areas. However, there were rarely clear outcomes.

The numbers are not working, is it? Paul Judge, managing Partner at Panoramic Ventures, Atlanta, said that the numbers are an order-of-magnitude away from what they should be. Panoramic Ventures focuses its investments on startups founded by minorities. “But they do have movement based on a more diverse city to begin with.”

Many Silicon Valley venture capitalists fled California after the epidemic, which saw remote work rise. Both Miami with its large Latino population and Atlanta with its large Black population have seen more interest.

Crunchbase data compiled by Reuters shows that startups founded by Black and Hispanic entrepreneurs received 3.5% of record-breaking $311 billion U.S. Venture funding for the year ended Dec. 16. This is up from the average 2.5% over the five previous years.

Only Florida and Georgia had significant deals flow, with a rise in Latino and Black companies. These deals increased to 41 in Florida from 35, and 23 in Georgia from 21. From 2.5% the five prior years, 4.5% of total $6.9 Billion of funding was allocated to deals with minority founders.

Georgian minority founders received 13.7% of $3.2Billion in financing, an increase from the 5.3% recorded in five previous years.

California and New York are the two largest hubs for venture capital. They both saw severalfold increases in financing of minority founders in dollars, in part due to huge deals. However, the amount of deals for companies owned by minorities, an indicator of the speed at which new companies find backers dropped, to 178, from 252 California, and 102, from 108 New York.

Shu Nyatta, Managing Partner at SoftBank Group International was one of those who relocated to Miami. Shu Nyatta said that although the funding has improved incrementally, it could lead to something more important.

“If you are a founder of color in Miami, it is easier just probabilistically to sit at the table with someone who can write a decent size check than in San Francisco,” he said.

SoftBank spent over $300 million in Miami this year to support the development of Miami as a technology hub. The SB Opportunity fund was also established by SoftBank in 2020, to help Latino and Black entrepreneurs. 75 million have been invested into 65 startups from the fund’s $100 million.

META4, a crypto currency fund founded by two Silicon Valley entrepreneurs, received backing from Andreessen Horowitz. The partners of META4 have spent time in Miami.

“If we weren’t in the same place at the same time talking through things and connecting, it would have been very different,” said Meta4 co-founder Nabyl Charania, a South Asian born in Kenya.

He says that things can be difficult for Black founders and Brown entrepreneurs in Miami. “It’s a nuanced conversation,” Charania said.