VC Funding Drops as Latinx Founders Investors Retreat from Underrepresented Collective • TechCrunch

Latest Crunchbase Latinx-based companies in the United States raised $250 million of the $39.85 billion in venture capital raised in the U.S. in Q3 — or about 0.63%, according to data.1 The Q3 total is a significant decrease from the $2.3 billion raised in Q3 last year and the $1.3 billion recorded in Q2 this year.

A total of 1.5% of all venture dollars will be allocated to Latinx-based companies by 2022, down from 2.5% last year, according to a Crunchbase analysis.

The numbers are not surprising. Minorities and women in general are seeing dramatic changes in venture funding this year. TechCrunch previously reported that black founders raised $187 million this Q3, meaning that given historical data trends, the amount of money allocated to Latinx-based companies won’t be too far from that total.

Meanwhile, Pitchbook reports that women-founded companies have raised 1.9% of all venture funding so far this year, which is again, a decrease of 2.4% from the group raised last year. TechCrunch has previously reported that investors are turning to their old networks to fund founders they know during the economic downturn — and those people are white men.

The somewhat encouraging news is that funding for early stage Latinx-based companies is on track to surpass the 2021 total. Much of the decline we see in the above numbers has come from the recent decline in financing. As the reality continues, women and minorities are no longer in a good position to raise VC, and hopes for change are dashed. Last year, Latinx-based American companies raised $8.5 billion. By the end of Q3 2022, that number had reached $2.7 billion, not even close to surpassing last year’s record-breaking total.

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