When it comes to investment funding for early stage ventures, female and minority startup founders have long been underrepresented. While diversity in the venture funding ecosystem is improving, more needs to be done.
Leading the way is Expert DOJO, a tech accelerator committed to offering opportunities to minority and female-founded tech companies, which currently represent 75% of the total investments it has made.
As founder Brian Mac Mahon explains, its strategy is to invest in global founders with extraordinary skills, resilience and grit, based on the belief that everybody in the world should have an equal opportunity of having a successful business, irrespective of gender, color or privilege.
Founded in 2016, Expert DOJO started as a studio to educate startups and help them grow. “We’ve always believed that unless they have the fundamental tools to grow, they will fail,” says Mac Mahon. “This is contrary to the venture capital thought process, which believes that all problems can be solved with additional investment.”
He didn’t set out to focus on supporting women and minorities, but the more minorities and female founders who came through the program, the more startup success he was seeing.
“This compelled us to look further into continents like Africa and India to invest in more and more great founders just because of what they can achieve,” he says. “What was very interesting was just how successful these marginalized founders were.”
Over the last two years, Expert DOJO has invested in over 100 startups, with over 65% securing follow-on rounds. One of the first African startups to be invested in was StarNews Mobile, a network of mobile video channels that allows celebrities and brands to monetize their fan bases, which went on to grow to over 10 million mobile subscribers across Africa.
Two examples of successful female founded startups from the last cohort were Klasha and Akiba Digital. Founded in Lagos, Nigeria by a team of ex-Amazon, Shopify, Net-a-Porter and ASOS employees, Klasha simplifies borderless payments for commerce in Africa. South Africa-based Akiba is a financial data aggregation, consolidation and enrichment engine that predicts consumer behavior.
“Both companies had incredible teams and both oversubscribed their rounds at lightning speed,” says Mac Mahon. “The world is waking up to the global potential of what venture used to treat as the forgotten people.”
Other success stories include internet security firm Suavei, whose sales revenue has increased by 6,000% compared to last year, health tech company Sensate, which has driven up sales revenue by 600%, and offline digital wallet solution Yuva Pay, which has increased platform revenue from $100,000 per month to $10,000,000 per month in just two years.
Mac Mahon believes that the accelerator offers fertile land for startups to build and nurture an obsessive mindset for growth. He says: “We start by building a story arc, formed from the founder’s vision, then we focus on brand and personal brand, and finally, we help build marketing plans for them. Our eight-week growth hacking course is designed to ignite viral growth.”
Each accelerator program invites 13 companies to join, based on their market size, potential to break through, and opportunity to scale fast.
“We love fast scaling,” says Mac Mahon. “We do care that they can raise additional funding later on, but not that much. This is probably why our cohort looks nothing like a cohort from Silicon Valley.”
He emphasizes the fact that companies are not chosen because they simply deserve to get a break. “They are chosen because they are the best at what they do and we will receive a superior financial return by doing the right thing,” he says.
With diversity and inclusivity now priority issues for businesses, there are signs that other accelerators and investors are shifting their approach to supporting more minority and female-run startups.
“We have females running 80% of the DOJO and we only care about results, not how someone looks,” says Mac Mahon. “There are definitely more female and minority funds and we are cautiously optimistic about how strong the impact will be.”
Expert DOJO is the currently third most active startup accelerator in the U.S., with a valuation of $32 million and investments in over 25 countries. The plan is to invest in 80 companies, from all over the world this year, with a goal of exceeding 1,000 investments within the next 10 years.
Investments will be segmented into 10 separate accelerator programs and will include an Africa cohort, a healthcare cohort, and a blockchain cohort. Each cohort will focus on trending industries and marketplaces and will be run by managing directors with ownership positions within their cohorts.
A Wefunder campaign has also been launched to help build an army of investors for startups who will benefit financially from supporting early-stage companies.
“We intend to keep investing until we have 1,000 companies in our portfolio,” says Mac Mahon. “At that stage, we will take comfort from knowing we’ve done our part in tilting up the startup ecosystem for both startups and investors.”