Business & Opportunities

Nex Cubed Launches $40M Fund To Invest In Startups With HBCU Founders

February 24, 2023
How Africa News

NexCubed Team

 

Nex Cubed has created a new fund to ensure that HBCU founders are not overlooked for possibilities.

 

According to a news statement, the worldwide accelerator has established a $40 million HBCU Founders Fund to support firms run by at least one HBCU student, alumnus, or faculty member.

 

Costco Wholesale, a firm that shares Nex Cubed’s aim of addressing gaps in venture capital funding for Black entrepreneurs, contributed $5 million to the investment.

 

“The Costco commitment validates both our investment thesis that there is a ton of talent within the HBCU community that can support a $40 million venture fund,” Marlon Evans, CEO of Nex Cubed, told AfroTech exclusively. “Then, I think, also for the founders, from their perspective, it can give them a sense of pride that there’s an investor like Costco that recognizes that talent, and that it’s not overlooking all the amazing opportunities that are coming out of HBCUs.”

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“We are proud to partner with the HBCU Founders Fund to help foster a more inclusive venture capital environment and accelerate Black entrepreneurship,” Richard Galanti, Executive Vice President and Chief Financial Officer of Costco Wholesale, said in a news release.

The funds will support a 16-week hybrid program beginning in April. Nex Cubed is now accepting applications for the first cohort till March 10.

According to Evans, about 8-10 founders will be chosen and will get an initial investment of $120,000. The training will lead up to an in-person Showcase Pitch Event in Silicon Valley this summer.

Furthermore, firms who continue to make progress may be eligible for follow-on financing worth an average of $250,000 while preparing to conclude a capital round.

Nex Cubed intends to sponsor at least ten firms and make over 80 investments over the next four years.

The HBCU Founders Fund is an outgrowth of the HBCU Founders Initiative, which has assisted over 600 students and graduates from 75 HBCUs.

“Historically, Black founders have received only 1-2 percent of venture funding annually,” Jade Lockard, Program Director at The HBCU Founders Initiative, said in a statement. “This illustrates the vast funding gap that Black founders face when raising venture funding. At Nex Cubed we are excited to fund often-overlooked founders such as HBCU Founders. This funding will lead to an increase in generational wealth that can then be circulated back into HBCU campuses. This is just the beginning.”

 

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