Research from the Crypto Council for Innovation reveals ongoing racial disparities within web3, highlighting that Black and Latino founders receive a disproportionately small share of funding compared to their counterparts. This challenges web3’s aspiration to democratize economic opportunities equally for all participants.
According to a report shared with crypto.news, overall venture capital (VC) investments in 2022 decreased by 36% due to rising inflation and interest rates. Investments in Black-led businesses experienced an even sharper decline, falling by 45%.
In 2022, Black-led and Latino-led crypto businesses raised significantly more funds, totaling $16.5 billion, compared to $1 billion in 2017. However, this combined amount represented only 0.5% of the total funding volume in the web3 industry for 2022, a notable decrease from their 7.1% share in 2017.
According to the Crypto Council for Innovation (CCI), the decline marks the largest year-over-year decrease in funding for Black entrepreneurs in the past decade, underscoring ongoing inequities in web3. The research highlights that despite demonstrating consistent value, Black- and Latino-founded companies are disproportionately affected during market downturns, amplifying existing disparities in capital allocation.
Mónica Talán, founder of CryptoConéxion, emphasized the challenges faced by Latinos in accessing capital, noting a lack of understanding about available funding options among U.S. Latinos. The CCI projects significant growth in fintech and data storage within web3, areas where Black and Latino developers are actively contributing, addressing market needs historically overlooked by investors and industry stakeholders.
