Whittling down 500 applicants to just five finalists, VC firm Revolution’s Rise of the Rest Tour culminated in a pitch battle this afternoon,
And while they didn’t walk away with the top prize, local startups Kanarys and Zirtue walked away with $500,000 in funding each as runners up. In addition to the funding, both companies also won a spot in Morgan Stanley’s Multicultural Innovation Lab 2021 cohort. And Revolution co-founder Steve Case said he would commit at least $100,000 to any funding round of $1 million or more for the companies.
Taking home the top prize of $1 million was Chicago-based B2B resource management SaaS startup Rheaply.
“I’m incredibly humbled that a major VC fund like Rise of the Rest believes in Kanarys and am so encouraged by their commitment to Black founders everywhere,” said Kanarys CEO and co-founder Mandy Price in a statement. “Their support will bring us closer to creating workplaces where everyone belongs.”
Half of the funds came from Revolution, while the other half came from Morgan Stanley’s Multicultural Innovation Lab. Applicants were reviewed by others, including 100 Black Angels & Allies and Opportunity Hub.
Unlike previous Rise of the Rest tours, this ninth one was virtual due to the pandemic. Originally, it had intended to make stops in places like Oklahoma City, St. Louis and north western Arkansas. The tour, dubbed the Equity Edition also had a focus on Black-founded startups.
That decision came in the wake of protests and calls for racial equity across the country following the killing of George Floyd, as many VC firms looked at ways to change a historically unequal ecosystem. Black founders making up only about 1 percent of those receiving VC money and Black women making up about .06 percent.
The new funding comes at a time when both Kanarys and Zirtue have been gaining traction. In July, both companies were accepted into the inaugural cohort for Google for Startups Accelerator for Black Founders. Then in October, the accelerator invested $300,000 in both companies, along with other local startups ShearShare and CourMed.
In addition to the new funding from the pitch competition and Google, Kanarys, which offers a platform for both employers and employees to help create a diverse and inclusive culture and workplace, closed on a $1.5 million pre-seed round late last year. That funding made co-founders Price and Star Carter two of only about 50 Black women to raise more than $1 million in VC funding.
Zirtue, a peer-to-peer, relationship-based lending platform, also ended 2019 on a high note, after landing a $1 million Seed round. And like Kanarys, Zirtue was also one of NTX Inno’s 2020 Inno on Fire Blazer winners.
“This tour is just one part of what must be a broader effort to scale and sustain inclusive entrepreneurship ecosystem building in overlooked cities across America,” Case said in a statement announcing the competition.
