Software startup Five to Nine raised $4.25 million last week in what was one of the largest fundraising rounds for a Black woman-led startup in Chicago in recent memory.
But Five to Nine's story was close to not taking place in Chicago at all.
Founded in Chicago by Jasmine Shells and Denise Umubyeyi in 2018, the startup relocated to New York City after struggling to raise pre-seed funding in Chicago.
"We picked up and moved to New York because we weren’t getting any funding here. It was really hard," Shells said. "It was very, very difficult."
Five to Nine raised $1.5 million in New York from Morgan Stanley and other investors, but decided to venture back to the city after Shells was accepted to the University of Chicago's Booth School of Business. There, the startup participated in the school's prestigious New Venture Challenge startup competition in 2019, finishing fourth.
With some funding, traction, and a successful run at UChicago's NVC, Five to Nine decided to once again call Chicago home, with Shells describing it as a "reintroduction" to the Chicago startup community.
The company, which makes software that helps companies manage and measure employee events and other initiatives, like DEI programs and all-hands meetings, has now raised even more funding for growth.
Its latest $4.25 million seed round was led by Black Ops Ventures with participation from Slack Fund, the workplace communication company's VC arm.
Five to Nine now also counts several Chicago investors among its cap table, including Don Thompson's Cleveland Avenue, along with local angel investors like Mike Gamson, Aaron Rankin, Chris Deutsch, Laura Desmond and others.
Five to Nine's customers include companies like Yahoo, Expedia and DoorDash, who use the startup to help organize events and get data on the impact of their Employee Resource Group (ERG) initiatives. The startup now has 14 employees, up from four last year. It plans to grow to 20 by year's end.
The significance of two Black women raising $4.25 million isn't lost on Shells and Umubyeyi, who are now among the fewer than 250 Black women who've raised at least $1 million in venture capital, according to TechCrunch.
Shells says she's been encouraged to see the progress made in Chicago to fund more diverse founders, specifically from founder-led groups like LongJump and Fifth Star Funds that are working to back founders of color.
Chicago had the highest percentage of angel and seed-stage investment going to Black and Latino founders of any major tech hub in the U.S., according to a report from P33, which also found that Chicago nearly tripled its investment in Black and Latino founders since 2019.
"It's part of my personal mission to see more Black founders get funded," Shells said. "I'm really excited to see the tide is starting to shift — just a little bit. We have a lot more work to do, but it's been really great seeing more money going to the hands of Black and Brown founders in the city."
