Harlem Capital, a New York City venture capital firm based in — you guessed it — Harlem, was originally founded in 2015 as an angel syndicate. However, in 2019, the VC firm raised over $40 million for its inaugural fund, with half of the fund’s individual LPs being women or people of color. Fund I has invested in 23 companies, 61% of which are led by Black or Latinx founders and 41% are led solely by women.
While the first fund remains active — with hopes to invest in five more companies — the diversity-focused venture capital firm recently announced that it raised $134 million for its second fund. Harlem Capital’s Fund II well exceeded its initial target of $100 million. This time, Harlem Capital has received investments from big names like Paypal, and continues to work on its diversity mission with 42% of Fund II’s LPs being women or people of color.
Another one of Harlem Capital’s investors is Apple, which announced back in January that it would pledge $100 million for its Racial Equity and Justice Initiative. Apple will invest $10 million with Harlem Capital over the next 20 years as well as continue to work closely with the VC firm to improve Apple’s own diversity efforts and develop an internship program with Harlem Capital.
Despite these efforts, investors and VC-backed companies are seriously lacking in terms of diversity. Crunchbase’s 2020 Diversity Report found that Black and Latinx founders received only 2.6% of all venture capital funding in 2020. Meanwhile, Fortune found that female founders received only 2.2% of all VC funding for the same year, less than they received in 2019. Harlem Capital’s Fund II is still looking to invest in businesses founded by women and people of color but much more funding is needed to actually change these low numbers. While Harlem Capital itself is led by a diverse group of investors, it shouldn’t be hard for other, less diverse VC firms to see the value in investing in underrepresented founders — or even hiring diverse investors. Until then, much of the burden to diversity the industry will fall on groups like BLCK VC and Harlem Capital.