St. Louis nonprofit WEPOWER has made the first investment from a $1.5 million fund it has launched to provide capital to local Black and Latino entrepreneurs.
WEPOWER provided the capital to St. Louis e-commerce startup Bold Xchange. The nonprofit did not disclose the amount of funding provided to Bold Xchange, but said it plans to make investments of $50,000 to $200,000 into companies through the fund.
WEPOWER, which targets creating equitable education and economic systems in St. Louis, announced the fund's launch in August 2021. It established the fund through a $500,000 investment from New York-based Living Cities, a collection of foundations and financial institutions focused on making investments to eradicate racial gaps, as well as with significant backing from St. Louis-based investors.
Bold Xchange said it plans to use its investment from WEPOWER to grow its online marketplace, which sells items from Black-owned businesses. Initially based in Charlotte, North Carolina, Bold Xchange moved to St. Louis in 2020 after winning a $50,000 grant from local nonprofit Arch Grants.
After launching its marketplace in 2018 with a focus on appealing to consumers, Bold Xchange has shifted to a business-to-business model, with brands that include Centene Corp. (NYSE: CNC), Home Depot (NYSE: HD) and CarMax (NYSE: KMX) using its platform to buy gifts for employees and events. Through its investment from WEPOWER, co-founder Danielle Deavens said Bold Xchange will be able to forge relationships with potential customers.
"What makes this opportunity so exciting is that WEPOWER not only provides capital and community, but also offers to leverage their connections with universities, hospitals and large corporations to support our growth and expansion,” she said in a press release.
Through its new $1.5 million fund, WEPOWER uses a revenue-based funding model that involves companies paying back the funding monthly based on a fixed percentage of their revenue.
“When we looked at the options available to entrepreneurs, we saw risk-averse banks on one side and venture capitalists looking for big bets on the other side, and very little in between,” Yoni Blumburg, vice president of community wealth building at WEPOWER, said in the press release. “Our goal is to build community wealth, so it was important to find a model that is both accessible and wouldn’t remove ownership from those that are building the business. Revenue sharing achieves that by letting us take more risks than banks, with fewer barriers and without requiring entrepreneurs to give up a significant share of ownership.”
WEPOWER said it plans to expand the investment portfolio of its fund, with several deals in the works.
