Top Black Tech Stories Of Challenge And Success In 2018
Here we are at the end of 2018 — a year which came with successes and challenges for many in the tech industry.
It was a year for popular “unicorn” companies and their executives to catch major heat, from Theranos — a blood analyzer company valued at billions that crashed and burned cinematically — to Facebook being called out every month for something nefarious, to Elon Musk’s erratic behavior with music artist Azealia Banks and smoking pot on-air.
Listen to GHOGH with Jamarlin Martin | Episode 39: Tunde Ogunlana
Jamarlin talks to family wealth advisor Tunde Ogunlana, CEO of Axial Family Advisors, about estate planning and Snoop Dogg’s comment that he doesn’t need a will (“I don’t give a f— when I’m dead. What am I gonna give a f— about?”). They also discuss the growing college debt bubble, whether more free tuition will help solve the problem, and why MBAs are like the bachelor’s degrees of 30 years ago.
Despite the negative spotlight that caused the public to question tech companies and the startup community, by August of 2018 there were more than 260 unicorns — companies valued at $1 billion or more. That’s up from 91 unicorns in 2017, according to Inc Magazine. In October 2018, investments in startups had already surpassed 2017, Crunchbase reported.
Not all startups will make unicorn status or haven’t yet, but many new startups took center stage in 2018. They drew positive attention for raising money, pioneering new concepts, bringing attention to tech hubs outside of Silicon Valley and for founders who look different from the typical founder stereotype — young white males.
We’re honoring Black tech founders such as Kellee James of Mercaris in Maryland, Harold Hughes of Bandwagon in South Carolina, Frederick Hutson of Pigeonly in Las Vegas, and Dr. Tye and Courtney Caldwell of ShearShare in McKinney, Texas. All were among many tech founders who caught our attention as we launched Mogul Mondays here at Moguldom this year.
This year gave us many opportunities to highlight the accomplishments, trials, and insights from the Black tech ecosystem with the launch of Moguldom’s podcast, GHOGH (Go Hard or Go Home) with Jamarlin Martin, the founder and CEO of Nubai Ventures and Moguldom, a multi-brand digital media platform. Devin Johnson, the president of Uninterrupted, Marlon Nichols, co-founder of Cross Culture Ventures, Angela Benton, founder of NewMe Accelerator and many others appeared with Martin on the GHOGH show.
2018 gave us AfroTech, Black Tech Week, Black Wallstreet: Homecoming, Afrotectopia and more. It also gave us people to be proud of, to learn from and to create and manufacture new things with Black-owned companies like Maker’s Row and Drop.
Let’s dive into some of the top news in Black tech for the year. We broke it down into four major themes.
On the rise: Black investors and Black founders raising funds
The number of black investors is on the rise. If BLCK VC, an organization formed by Black VCs for Black VCs, has its way, the number of Black VCs will be around 400 — nearly doubling by 2024. The organization announced its goals in 2018, and we’re impressed. Led by Storm Ventures associate Frederik Groce and NEA (New Enterprise Associate) analyst Sydney Sykes, the group strives to increase the number of higher-ranking professionals at investment firms. The idea is to raise the number of Black investors, increase the amount of money black founders receive and reduce the disparities of dollars raised by Black founders. This is one initiative we will be watching closely.
This focus on Black investors comes at a time when Harlem Capital identified more than 100 black startups that have raised $1 million-plus for a total of $2.7 billion. Read their report. We can be happy with the news of many Black-led startups receiving millions in funding. Pindrop’s latest funding round of more than $90 million brings their total funding raised thus far to $200-million-plus. Black-owned legal tech company Court Buddy received an additional $6 million to bring them to $7.1 million in funds raised, further affirmation that Black founders are capable of creating innovative and profitable companies.
Even Florida with its can’t-get-anything-right image (hello 2018 midterms and other recent elections) is growing its tech community. A new fund was recently announced by the Tampa-based Black tech consortium The Mainframe. The most significant milestones to count are the Black-led investor funds of $36 million earmarked for Black female founders thanks to Arlan Hamilton of Backstage Capital, $137 million by Base 10 Ventures Adeyemi Ajao, $145 million by Motley Fool Ventures Ollen Douglass and $1.37 billion funds led by Kenneth Chenault, the only Black member of the Facebook board of directors. Black is the new financial Black.
Lawsuits and bad blood
The Black tech community was stunned to learn that Brian Brackeen, founder of Miami-based facial recognition firm Kairos, was ousted from his company via a voice message per Brackeen. Accusations of Brackeen misleading shareholders, misappropriating corporate funds and more were made, and Kairos filed a suit against the founder. Brackeen shared his story publicly on what happened before he was fired and he has since filed a countersuit for $10 million for libel, civil conspiracy, violation of statutes and breach of contract. In a year where Kairos announced a multimillion-dollar acquisition of an Irish startup, EmotionReader, the Black tech community was shocked. The drama continues to unfold.
2018 was the year the Securities & Exchange Commission doubled down on its efforts to gain a handle on fundraising by companies using cryptocurrency. Floyd Mayweather and DJ Khaled found out the hard way there are rules for promoting securities relative to initial coin offerings (ICOs), especially when you do not reveal you are paid to do so. It’s a costly way to gain the Fed’s attention. The SEC managed to get both Black celebrities. Without admitting or denying the findings, Mayweather and Khaled to agree to pay disgorgement, penalties, and interest as well as agree to not promote any securities for up to three years. Fines totaled $614,775 for Mayweather and $152,725 for Khaled, according to an SEC press release. (I wonder if he’ll still want us to call him Floyd Crypto Mayweather?)
We moved from cheering on Jay-Z with his streaming service, Tidal, to worrying about it in 2018. The late great music artist, Prince, has an album slated to release on Tidal. Prince’s estate said Tidal lied about numbers and it wants the album pulled. Adding fuel to the fire, Beyoncé took time to strike back at Spotify’s accusations that Tidal used false numbers through lyrics in the song, “Nice.” Based on an article by The Verge, a data breach at Tidal shows the company is not being truthful about subscriber and streaming numbers.
Expect lawsuits and the SEC diving further into cryptocurrency in the new year.
Tech is being used as a weapon for hate, division and manipulation on social media
When Facebook manager Mark S. Luckie called out the social network in a memo, he said Facebook is failing its Black employees and its Black users. Black techies were quick to chime in. The memo was circulated to employees at Facebook before Luckie left the company. He gave examples where the company didn’t represent its Black users and how it marginalized its employees according to his observations. The New York Times reported on the extent to which Facebook was used by Russian intelligence to try and persuade Blacks against voting. Let’s say, maybe Luckie’s words ring even truer. Following the NYT articles, the NAACP called for a weeklong online boycott, #LogOutFacebook.
However, it is important to note YouTube was also used in the same plot against the African American community. Let’s not forget the “Let’s go N-word Hunting” video on Snapchat. Let’s not forget Roseanne Barr’s tweet and Twitter being called out by Recode for not sharing a full picture on its employment diversity numbers. Maybe 2019 will be a better year for social media tech companies, especially if Our Collective, a group of professionals in the Bay area looking to add diversity in the workplace and their Coalition of Black Excellence Week continues.
Black youth and millennials highlighted
Can we take a moment and pause for “Black Panther“? The positive effects of the release of the Marvel comic book-turned- Hollywood movie and the worldwide blockbuster hit reverberated throughout the year. Former U.S. President Barack Obama listed the movie as one of his favorites this year. The young female character, Shuri, (which is now also an action doll, folks) has inspired Black youth and young adults around the world. Casting a positive light on the intelligence and capability of young Blacks in tech has been a benefit felt throughout the year. There’s been an increase in stories about teens and young adults launching and growing businesses. Teens such as Charlie and Hannah Lucas from Georgia with their mobile app, “notOK”. George Hofstetter created “Up to Code” and “CopStop.” Keila Banks is teaching other teens to code and is a speaker at tech events. The future of the next generation of Black tech leaders is looking good. Let’s not forget the dynamic young duo of Mars Reel — Bradley And Brandon Deyo — young adults who have already raised millions of dollars and secured partnerships with major media outlets. All hail the next group of tech kings and queens.
Over the past year, Moguldom shared the successes and challenges in the Black tech community. It’s hard to close out a note highlighting the ups and downs when so much occurred in Black tech news in 2018. However, a quote by Chinedu Enekwe, partner and developer at Affiniti Ventures, seems right. In a Moguldom interview earlier this, Enekwe said, “What sets us apart is our ambitions. We’re not coming for the crumbs. We’re going to take the whole table.”
Sign up for the Moguldom newsletter — business news you need to know about economic empowerment for the digital age, delivered to your inbox.