Crunchbase has expanded its tagging options in Europe and has begun tracking how much venture capital funding goes to minority founders on the continent.
Diversity Spotlight is a Crunchbase feature that allows businesses to add tags to their profiles to label them. For example, a business can be labeled as Black-owned or women-led. Crunchbase is currently offering this feature in Europe.
I³ Investing, a queer and immigrant founder-focused firm, served as the exclusive launch partner for the feature in the UK and Europe. Other partners include Female Founders, Tech Nation, Black Tech Fest and Colorintech.
Crunchbase first launched its Diversity Spotlight feature in 2020 and expanded it last year by adding an LGBTQ+ tag, and if the feature is widely used in Europe, it will hopefully fill some of the gaps in the data landscape and make it easier to find up-to-date information on how much venture capital funding is going to ethnic minorities.
Ryan Husk, director of business development and partnerships at Crunchbase, said in a blog post Tuesday morning that the goal is to “address systemic underfunding and discrimination based on race, ethnicity, and gender” and to “foster a more inclusive and equitable startup ecosystem.”
The latest data on ethnic minority venture funding in the UK shows a similar pattern to the US. According to a report by Extend Ventures, black founders in the UK receive less than 1% of the total venture capital invested in the country. Furthermore, because ethnicity and race are so difficult to track in some countries, such as France and Germany, there is often little to no information on the amount of venture funding that ethnic minorities actually receive.
Meanwhile, globally, women generally receive less than 2% of venture capital funding worldwide. There are some initiatives in European countries to change this, such as French companies pledging to join the SISTA Charter, but we all know there is still a lot to be done.
The European startup ecosystem seems excited about the feature. Vigille Houarault, French founder of startup Crowdea, said any attempt to bring transparency to the market is good news. “This will not only help measure the bias in the investment environment, but also help minority founders position and evaluate their companies based on facts and metrics,” he said.
Over 70,000 U.S. companies have already added a diversity tag to their Crunchbase profiles, so if you're interested in following suit, you can do so here.
This story has been updated to reflect the number of companies that have added diversity tags to their Crunchbase profiles.