Capchase, the provider of financing solutions for Software-as-a-Service companies, announced a milestone for its 2021 initiative to provide non-dilutive capital to women- and minority-led startups.
Over the last two years, the company has “deployed more than $100 million in funding to these underserved groups using the company’s proprietary AI technology to increase the speed at which the funds were deployed.”
Funding for founders who identify “as a woman or as a person of color has always been disproportionately small.”
The economic downturn in 2022 “that caused venture investment to decline by more than 50% only exacerbated the issue.”
In the U.S. only 2% of total venture capital funding “during 2022 went to women-founded startups, and minority-founded companies only received 1.8% of total funding.”
The issue of equality in startup funding “goes beyond the U.S. – women-only teams in Europe received just 1% of total capital in 2022 and minority-founded startups raised 0.7%.”
Miguel Fernandez, co-founder and CEO of Capchase, said:
“Global venture capital funding has fallen dramatically and startups in general are continuing to have a difficult time securing funding. We all have a role in improving equality in the technology industry and providing women- and minority-founders with the funding they need to grow is one of the areas where we knew we could help. At Capchase our data-driven approach to providing revenue-based financing gives us the ability to support brilliant women and minority founders without the inherent bias typically found in traditional funding processes.”
Despite the headwinds, these founders “have proven to be successful entrepreneurs, with female-founded startups maintaining a lower median burn rate than male-founded startups — an important metric for startup health, longevity, and growth when capital is harder to receive.”
The data supports “why the $100 million initiative was successful – Capchase bases funding decisions on the applicant’s company’s revenue, subscription, and financial data, ensuring all founders are given an equal opportunity to receive funds, grow their businesses and retain their equity.”
Flora Azucena, CEO and founder of Alchemy Vision, said:
“As an immigrant, woman, and founder, it’s no secret funding can be more difficult to receive. Capchase understands deploying capital to diverse founders can create greater opportunities for individuals and innovation. The financing provided by Capchase allows our team at Alchemy Vision to focus on our mission of supporting patient care and practice growth, as well as my personal mission to teach, lead, and inspire the medical staff providing care in this noble profession.”
Capchase will continue “to support female- and minority-founded startups through the use of its technology that determines eligibility and draw amounts on applicant startup fundamentals and scenario analysis.”