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From Boom to Bust: What Happened to Funding for Black Beauty Brands?

Published December 8, 2024
Published December 8, 2024
Troy Ayala x Lucas Gouvêa via Unsplash

The beauty industry has long been celebrated for its ability to adapt to cultural moments, innovate product offerings, and foster entrepreneurial creativity. However, therein lies a persistent challenge—the systemic underfunding of Black beauty entrepreneurs. Despite the global momentum sparked by the Black Lives Matter movement in 2020—when corporations and investors made bold pledges to support Black-owned businesses—recent numbers reveal a decline in funding for Black founders. According to a 2023 article by McKinsey & Company, “While there has been cumulative growth in donated amounts—and new funding [reflecting] that there are businesses still making new decisions to support racial equity—the pace of monetary commitments has slowed year-over-year (down 32 percent since 2021).”A Promising Beginning: The Surge in 2020In 2020, the world witnessed an unprecedented reckoning with racial inequity. Major corporations, including beauty giants, publicly committed to empowering Black entrepreneurs. For a brief period, these efforts seemed promising. Venture capital funding for Black founders across industries saw a noticeable uptick, with Crunchbase reporting that Black-led start-ups raised $1.8 billion in 2021—a more than fourfold increase compared to the same time frame in 2020. Beauty retailers such as Sephora and Ulta Beauty launched high-profile initiatives like the 15 Percent Pledge, dedicating shelf space to Black-owned brands and promoting their visibility. Also, JCP partnered with Thirteen Lune in 2021, a relationship that was restructured in 2024. Yet, as the fervor of public pledges has faded, so too has the funding pipeline.

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