Black and Latino startup founders in Greater Boston took in more venture capital than their counterparts in all but two other major metropolitan areas over the past five years, according to a new study. But the results are as much a reflection of the nationwide underrepresentation of those groups in tech than they are a signal of the region’s success.
The report, released Wednesday by the business information firm Crunchbase, found that $2.3 billion in funding went to Black- and Latino-founded startups in Boston between 2015 and August of 2020. That was topped only by San Francisco and New York.
But the investments are only a tiny portion of the massive amount of venture capital that has flowed into companies here and elsewhere over the past half-decade. The report found that across Massachusetts, companies with Latino founders accounted for 3.9 percent of the venture capital invested. Companies with Black founders received only $100 million over that time — 0.2 percent of the total funding in the state.
The numbers are similarly low across the country. The Crunchbase report found that nationwide, companies with Black and Latino founders received 2.4 percent of the venture funding doled out to companies across the United States. According to Census data, Black and Hispanic or Latino people together make up 32 percent of the population.
In Boston, there have been a handful of industry efforts to make the technology scene more representative of the local population.
Some efforts focus on improving the hiring of people from Black, Latino, and other underrepresented backgrounds. Others look to develop technology skills in communities of color, and increase networking and internship opportunities to help investors become aware of ideas for innovative products and businesses that they might otherwise miss.
“Progress toward a more equitable funding landscape has been slow. This is despite many venture capital firms, incubators and community organizations for underrepresented founders launching in the last few years,” the report said. “The reality is, there’s a lot of work that needs to be done to ensure that underrepresented founders have access to the same opportunities as nonminority founders.”