Black Fashion Tech Founders: Give Us A Level Playing Field, Not Charity!

Not as "Guinea Pigs Or Marketing Tools", are you ready to give Black Founders' Fashion Tech businesses a fighting chance?

The virtual 3D fashion show by US-based Congolese designer Anifa Mvuemba, for her brand Hanifa, left everyone mesmerized. The digital show, executed with finesse, not only sent ripples across the fashion-tech circuit but also sparked enthusiasm amongst the Black community, widely underrepresented in this space.

In fashion, the number of Black-owned independent designer brands is on the rise, but the tally of Black founder-led tech startups lags far behind. It is common knowledge that setting up a fashion-tech business (whether an e-commerce or a SaaS solution) is harder as one needs tech expertise and capital. But Black founders end up chasing not only money and skill support but also face systemic racism at every step of their entrepreneurial journey.

However, in the wake of recent Black Lives Matter protests, the diversity agenda has come to the fore, giving rise to more candid and uncomfortable discussions. And Black founders have a singular message for investors and companies that want to breed fashion-tech innovation— “give us a level playing field.”

Funding To Get Off The Ground

Raising money for a fashion-tech startup is hard enough because the fashion industry has been slow to embrace technology. Unfortunately, the Black founders have it harder because they often find themselves judged on the colour of their skin rather than the strength of their business plan.  

Urenna Okonkwo, the founder of Cashmere, a fashion fintech app, admits to being racially discriminated against on several occasions. A senior investor at a networking dinner refused to share his business card with her but readily handed it out to a white entrepreneur. During a product pitch earlier in the year, she admitted to being undermined with condescending feedback while her white peer presenting a similar point was held in high regard.

Urenna Okonkwo presenting Cashmere [Image Credit: Cashmere]

She sums it up in one line, “the investors invest in people who look like them.” While global statistics are unavailable, US-centric reports strongly support her statement. A Rate My Investor study tracked venture-backed deals between 2013 and 2017. Across all sectors, only 1% of VC dollars went to Black entrepreneurs, compared to 77% for white entrepreneurs. Another report by Harvard Business School suggests more than 80% of venture firms don’t have a single Black investor, and therefore, the implicit bias has historically perpetuated.

“If the data shows that the most successful startup founders are white men who are technical founders with an Ivy-league education and your goal is to derisk your investment, you go with what the data says.”

Anastasia Nicole, startup mentor and Managing Director, Labs at Shadow Ventures,

Anastasia Nicole, startup mentor and Managing Director, Labs at Shadow Ventures, says, “It is pattern matching. If the data shows that the most successful startup founders are white men who are technical founders with an Ivy-league education and your goal is to derisk your investment, you go with what the data says.”

To tackle that challenge, Black investors have launched diversity focussed firms over the last five years. There are VC firms like Harlem Capital and Impact X and angel investor networks like UK-based Cornerstone Partners.

WOC in DC, event in December 2019. The panel had a strategic conversation on entrepreneurship and intrapreneurship for creatives in DC. [Image Credit: WOC]

But Okonkwo, currently seeking investment to take her app beyond the beta, points out these funds do not focus on the pre-seed stage. “Several founders are taking much longer to get the idea off the ground. It isn’t that we are not capable, but we don’t have access to funding as our white counterparts who often raise the initial investment through friends and family.”

Ayotunde Rufai, Co-Founder & CEO of Jendaya, a luxury fashion marketplace aimed at African customers, echoes her sentiment. “I don’t come from a struggling background, but my dad or my immediate middle-class friendship circle cannot offer me 150k to kickstart the pilot phase of my startup, for various reasons.”

“I don’t come from a struggling background, but my dad or my immediate middle-class friendship circle cannot offer me 150k to kickstart the pilot phase of my startup, for various reasons.”

Ayotunde Rufai, Co-Founder & CEO of Jendaya

This isn’t to say that everyone else (including the white community) can easily access family wealth as initial capital. However, decades of racial discrimination has led to the harsh wealth inequality that places Black founders at the bottom of the totem pole. An oft-quoted American stat reveals that an African American family has 10 cents in wealth for every $1 whites own.

Some news reports suggest that some VCs are taking steps towards the creation of pre-seed investment funds aimed at companies coming from historically Black colleges and universities(HBCUs). However, given his stress-inducing past experiences, Rufai is cautiously optimistic.

And it does not seem to matter whether the Black founder is a fresher in London or a 17-year industry veteran working in New York, the story of struggle is universal. Luxury fashion professional Felita Harris did the rounds of investor companies to acquire funding for her concept, Enform Sales, an app for staff product knowledge training.

She neither got a flat no for an answer nor tangible feedback.

“You are continuously out there proving yourself but keep wondering whether it is the colour of your skin or the product that stops the investor from writing a cheque.” Disheartened by the response, she brought in a software company as a co-founder, pooled in joint resources to develop the app. She acknowledges it was her years in the fashion industry, working with global retailers that led to a set of leading luxury brands as first clients. As the next step, she intends to tap diversity funds for further expansion. Harris is powering on yet several competent Black founders, despite the resilience, do not have a fighting chance of even launching a minimum viable product (MVP), let alone a profitable business.

Leandrew Robinson, Founder of HingeTo talking to Black Enterprise about building their brands through retail and merchandising and his path to eCommerce success. [Image Credit: Black Enterprise Youtube]

In contrast, the story of Californian Leandrew Robinson stands out as an exception rather than the norm. After a 6-year senior management stint at a streetwear e-commerce site, he co-founded Hingeto, a B2B marketplace and dropship solution in 2015. In three years, he participated in the Y-Combinator programme, raised $2.8 million and is currently negotiating the buyout of his firm. Robinson acknowledges his journey has been different. He is grateful for the support by Kapor Capital, an investor that also supported Robinson’s nonprofit venture during college days. “They gave me the initial credibility, and I had to focus on building a great product mainly.” He says, “There are a few investors like Precursor Ventures who would be open to supporting founders like Urenna and Ayotunde at the idea stage. But you need to know an insider who can take you to them. Unfortunately, the lack of access systematically locks out the Black founders from the investor ecosystem.”

To Succeed, Offer Opportunity & Visibility

Indeed, startup success is as much about industry support and mentorship as it is about securing money.

However, the problem of ‘lack of people who look like the Black founders’ also extends to fashion’s C-suite— influential professionals who can make quick introductions, purchase decision-makers when it comes to new technologies and those who could even agree to sit on startup advisory boards. Fashion’s diversity-in-the-backend problem is tragic and ironic, given the customer base is multi-hued.

Rufai explains, “A lot of our white and even brown counterparts have the benefit of the natural network. For example, their dad might be the head of a fashion retailer or know one in their network. They have a good handle on that network or the relevant positions, and it’s as easy as saying ‘my son is running a startup and needs your guidance or investment’ alleviates a lot of the cold call/email grind.”

Hiring more Black people in decision-making roles needs to be a definitive goal for fashion companies that are taking an anti-racist stance on social media. But how can these organizations support Black-owned startups that are working on solutions for the industry? How does the 15% shelf space campaign extend to the B2B universe?

Fit-tech consultant Jessica Couch and co-founder, Women of Color Fashion-Tech Brunch suggests: “Brands and retailers will need to increase diversity in decision-making positions and not just in the roles of diversity and inclusion. Companies can also do a better job of sourcing available entrepreneurs, allowing them an opportunity to participate in company-run incubators and accelerators.” She adds if the scouting seems complicated, “the companies can liaison with organizations like Black Women Talk Tech and our community to connect with the pool of relevant startups. The talent exists; however, the efforts have to be genuine and intentional.”

Jessica Couch and co-founder, Women of Color Fashion-Tech Brunch [Image Credit: Wilson College News]

Robinson says, “If only companies are willing to tackle the diversity problem like other business problems, i.e. setting milestones and transparent reporting, tangible change can be achieved. We aren’t asking for charity or supporting unqualified startups. Companies need to work harder to find suitable candidates.”

Harris agrees, “I hear so many times, there is a ‘pipeline issue’. They say they don’t know where the Black founders are. We are here on Linkedin and emailing you. Please answer the call.”

Existing fashion and retail-tech accelerators like Farfetch and LVMH could follow the 15% campaign approach and explicitly offer spots on the programme to the under-represented founders.

Says Gary Stewart, CEO, The Nest, an app for entrepreneurial education and former MD of Wayra UK, a tech accelerator, “Everything starts with data. Companies have been unwilling to take targets except for gender. Such goals for diversity in accelerators as well as for hiring will likely drive corporate commitment.”

“Minority founders on such programmes should not be made to feel like guinea pigs or marketing tools”.

Gary Stewart, CEO, The Nest

Companies could also band together to back a fashion-tech diversity accelerator, akin to the sustainability focussed Fashion For Good programme. Stewart recognizes the potential, especially amongst the American corporates, but offers a caveat. “Minority founders on such programmes should not be made to feel like guinea pigs or marketing tools. Those from less privileged backgrounds might regard it as a chance of success and give up their full-time jobs to attend the sessions. They should get the proper value.” Also, since unbundling of the accelerators is now a reality, there is potential to create a model suited to the needs of the diverse founders.

While accelerators bring increased visibility, Couch believes “industry trade shows can also amplify the voices of minority-owned startups by making dedicated efforts to source these businesses and have them represented.” A regular on the fashion tech speaking circuit, she is fed up with being the token Black voice and wants to see more deserving faces on-stage. 

The Black Community Activation

Representation and visibility are critical because “without role models who look like you and model future possibilities, how do you know what is possible?”, says Simon.

And within the Black community, there aren’t many fashion-tech success stories. Most accomplished Black founders have built businesses in sectors like health tech, fintech and media. For instance, The Black Founder List, a recently crowdsourced database of over 240 US-based venture-backed startups includes only four fashion-tech companies, with one of them being Robinson’s Hingeto.

“We need our version of Edward Enninful (British Vogue’s first Black editor)”, declares Rufai. 

Edward Enninful Appointed as Editor-in-Chief of British Vogue in 2017.

“Fashion-tech is a new conversation in the Black community which is riddled by genuine and psychological barriers to tech access,” explains Jean Jimbo, a tech product manager and ambassador, Coding Black Females.

Still, change is in the offing as more youngsters recognize the future of tech and are willing to opt out of careers like finance and medicine, traditionally considered respectable in African American and African diaspora households.

London based Elizabeth Esenam Blege and Judith Omoregie, founders of EFITTER, are second-generation immigrants. They are researching a fit-tech tool and want to use the heightened conversation around racial inclusion to their advantage. “A lot of people who we look up to in fashion-tech are now proactively reaching out to offer mentorship or answer specific questions.”

“Fashion-tech is a new conversation in the Black community which is riddled by genuine and psychological barriers to tech access.”

Jean Jimbo, a tech product manager and ambassador, Coding Black Females

To activate ongoing peer support, Esenam and Omoregie want to start a community of Black fashion-tech founders. They could plug into the already active Black tech collectives like Afrotech and UK Black Tech as a springboard for further discussion.

Meanwhile, to push for community inclusion early on, Couch is connecting the dots between Black tech education initiatives like the nonprofit, Black Girls Code and schools. “We have been doing outreach programmes at HBCUs to drive awareness towards the interdisciplinary nature of fashion tech. The STEM students don’t realize that their skills are transferable in fashion, and opportunities worth tapping do exist.”

Therein lies an opportunity for tech companies, armed with bigger marketing budgets and a keenness to improve their diversity credentials. If Microsoft can set up a ‘Future Of Fashion’ incubator for students at the London College of Fashion, there is an equally compelling case to adopt a similar yet rigorous approach to cultivate the pipeline of POC (Person of Colour) tech talent in fashion.

For now, the political climate has put the spotlight on Black businesses and forced the industry to face the stark realities of disparity. However, most of the founders are not terming it as a turning point. At least, not yet. Instead, they will wait to see whether the intentions to course-correct transform into investment flows and long-term support.

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Molshree is a fashion consultant and researcher based in London. With a background in fashion retail, she is currently focussing on projects that propel the sustainability agenda into the mainstream.