Tribe Network is launching Tribe Ventures, a venture capital fund that will invest in pre-seed and seed-stage businesses led by racialized founders. The purpose of the fund is to level the playing field for entrepreneurs who have traditionally faced systemic barriers when accessing capital, according to the Tribe Network.
The $20-million fund will seek out racialized founders building high-growth technology companies, and will focus primarily on entrepreneurs based in Canada. However, some 15 percent of the fund will be reserved for international investment in Africa.
“For years, Black business communities have faced significant barriers to accessing traditional avenues for growth and support.”
Minister of Small Business
Tribe Network said it is currently in the process of raising the fund, and throughout June and July will host events in Halifax, Toronto, Montreal, and Calgary to engage investors and racialized founders.
Alfred Burgesson, CEO and founder at Tribe Ventures, told BetaKit that Tribe Network hadn’t raised anything yet, but was looking toward a number of sources and had some soft commitments.
Burgesson said the fund intended to approach the Venture Capital Catalyst Initiative and from the Social Finance Fund. The former is a federal government initiative to increase the availability of capital for Canada’s high-potential innovative firms, including those in the life sciences sector and for entrepreneurs from underrepresented groups, such as women and racialized communities.
The federal government also operates the Social Finance Fund, which has given three fund managers $400 million to invest over the next five years. The investments will go toward existing or emerging social-finance investors, which raise money from investors to make social finance investments, use innovative and complementary strategies to sustainably grow the social finance market, and expand flexible financing opportunities for social purpose organizations.
Burgesson said they are also in discussions with provincial governments as to how they might support the fund.
Tribe Network wants to close the fund at the end of the year, and hopes to begin investing in early 2024. In the Canadian market, deal sizes will range from $150,000 to $300,000 over the 10-year life of the fund.
The African market will see deal sizes of $150,000 to $200,000. “Our team has strong connections in Africa,” Burgesson said, explaining why Tribe Ventures intends to invest there. “It’s an emerging market. We also believe that it’s a strong opportunity for Canada to position itself as a global HQ for some of the emerging talent that’s coming out of Africa.”
Tribe Network launched in 2020, aiming to create an entrepreneurship and innovation hub for entrepreneurs identifying as Black, Indigenous, and People of Colour (BIPOC).
A study conducted in 2022 found that Black entrepreneurs received less than one percent of venture capital funding in the United States,” according to Techcrunch.
“[Africa] is an emerging market. We also believe that it’s a strong opportunity for Canada to position itself as a global HQ for some of the emerging talent.”
CEO, Tribe Ventures
“Based on the data and what we know, racialized founders are consistently underserved, underfunded and underestimated in the venture capital ecosystem,” Alfred Burgesson, CEO and founder at Tribe Ventures, said in a release.
“The genesis of Tribe Ventures is to address this imbalance and build capacity for these founders.”
Mary Ng, the federal minister of small business, export promotion and international trade, said the same thing in 2021 at the launch for the first round of applications from the Black Entrepreneurship Ecosystem Fund. At the time, she stated: “For years, Black business communities have faced significant barriers to accessing traditional avenues for growth and support and this includes a lack of access to capital, resources, and other opportunities.”
Tribe Network’s fund somewhat mirrors KR Capital’s. KR Capital, formerly known as Black Innovation Capital, closed an additional $4.5 million CAD in 2022 for its venture capital fund focused on Black tech entrepreneurs in Canada.
The close comes in addition to the $6.4 million BKR Capital secured last year from lead investor BDC Capital, and RBC, Globalive Capital, and Telus Ventures.
BKR Capital aims to back 18 Canadian tech companies founded by Black entrepreneurs over the next four years. BKR Capital also increased its target fund size to $20 million from its initial $10-million goal.
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