Bola Adegbulu’s idea came to him by accident – literally. Narrowly avoiding a car crash inspired the Londoner’s idea for smart navigation software that could predict the safest route for drivers and prevent some of the 1.3 million deaths due to road accidents globally each year. With more than 90% of those fatalities taking place in developing nations, including Adegbulu’s native Nigeria, the concept hit home.
The 30-year-old spent two years working on the pilot for his company, Predina, with co-founder Meha Nelson, before clinching funding from Impact X Capital Partners: a new black-owned-and-run venture capital firm in London aiming to reverse the lack of funding for startups led by, or serving, women and people of colour.
The total amount of funding Predina clinched last month is still under wraps, but the duo – who recently launched an app for consumers, Waymaker – plan to spend the money on extra staff to help develop their product with the aim of selling it to big businesses, including car manufacturers, across the globe.
Impact X, which quietly launched last year, is now on a fundraising drive of its own and is tapping wealthy individuals and institutional investors along the way. Its chief executive, Eric Collins, is hoping to attract £100m to invest in companies his team believes will not only deliver financial returns, but have a positive social impact on under-represented communities across Europe.
That for-us-and-by-us approach has already attracted high profile investors from across the black community, including the comedian Lenny Henry, the actor Adrian Lester, and Uber board member Ursula Burns – the first black woman to run a Fortune 500 company when she served as the head of Xerox. It has now backed nine companies, ranging from iPhone subscription services to film production companies.
Venture capitalists like to invest with the people they went to college with, the people they rowed on the crew team with
Collins, 53, said venture capitalists had been investing in marginalised groups in his native US for decades, but that European talent had been relatively untouched.
“Venture capital funds in Europe have not done so much investing in these categories. It allows us to have a fantastic green field of opportunity,” Collins explained. “Less than 1% of venture capital goes to people of colour, less than 4% of venture capital goes to women. And given the numbers that exist in Europe, it’s a great time to be investing in under-represented populations.”
But reversing that trend is a big task in a business that, stereotypically, backs the same young white men that venture capital bosses rubbed shoulders with at university and has fuelled a “frat bro” culture often synonymous with Silicon Valley.
“We want to put our resources into something which is actually going to benefit under-represented entrepreneurs,” said Collins. “In Silicon Valley, if you look at entrepreneurs and even workforces, there are just so few people of colour, there are so few women. Let’s not replicate that in Europe.”
The problem was not that black entrepreneurs were rejected for funding after making a pitch, he said: it was that they struggled to even get in the door. When it is a matter of who you know, the chances of success for marginalised communities decline.
Collins’s co-founder, Paula Groves, said: “Venture capitalists like to invest with the people they know, the people they went to college with, the people they rowed on the crew team with, people that they attended weddings with.” The 55-year-old American – originally from New Orleans but now commuting between Colorado and London – has been working in venture capital since the 1990s, when she founded Axxon Capital. The £54m fund, aimed at investing in minority- and female-owned startups, backed firms such as online security company Guardent, which sold for $140m, before Groves left in 2004.
Groves said the Impact X team had been drawing on their own networks for up-and-coming talent. They include members of the black communities from their Ivy League university days, who are now spread around the globe, as well as local colleges and tech incubators across Europe and the UK: “We think we can identify gems from under-represented communities just in the way Silicon Valley has identified gems in their communities.”
They have scouted out 400 firms in the past year, nine of which have made the cut – Predina among them. They include Pace, which uses AI to help hoteliers determine what price to set for rooms, and Raylo, an iPhone leasing service offering a new handset every two years for a monthly subscription of less than £50, before selling the devices abroad. Impact X plans to vet a similar number of firms each year as new talent crops up in sectors spanning lifestyle, media and entertainment, tech, health and education.
The small five-person team is based in London, but while they are constantly on the hunt for new investment opportunities, Collins encourages entrepreneurs who are not approached to get in touch by email.
Collins, originally from Alabama, had his first brush with venture capital in the late 1990s. The son of a university professor and a music teacher, he graduated from Princeton University and spent some time in working as a strategy consultant specialising in deals and mergers before founding SpeedSolve, a consumer complaint tracking platform that he took to Groves for funding. That firm was gradually wound down just as the dotcom bubble burst in 2001, but Collins was not deterred.
Over the next 20 years, he helped launch and sell a handful of firms – including predictive text firm SwiftKey, which was bought by Microsoft for a reported £250m in 2016 – before joining forces with Groves to start Impact X.
Collins said the venture should have been launched decades ago, but the opportunities in Europe were now too vast to ignore. “We want to find the young woman in Bristol, we want to find the man in Edinburgh, who is an under-represented individual who has an idea which is going to change the world and benefit it greatly, and we think we actually can identify those through our backgrounds.”