Diversity-focused Harlem Capital raises $134M

Harlem Capital is announcing that it has raised $134 million for its second fund — well above its target of $100 million and its initial cap of $125 million.

The firm was founded in 2015 by managing partners Henri Pierre-Jacques and Jarrid Tingle. It started out as an angel syndicate with the goal of investing in founders from diverse backgrounds, then announced its first VC fund of $40 million at the end of 2019. The firm’s investments include e-commerce companies Pangaea, CashDrop, Malomo and Repeat, as well as wellness startups, Wellory, Expectful, Wagmo and Shine.

It hasn’t invested all of that initial $40 million yet — the firm says it’s aiming to make five more investments from Fund I. Apparently 61% of Harlem Capital’s Fund I portfolio companies are led by Black or Latinx executives, while 43% are led exclusively by women. While the firm was founded in New York City’s Harlem neighborhood — where I live and am typing these words — it invests in startups across the United States.

Meanwhile, with Fund II, it’s shifting its focus to seed stage investments in companies that are post-product, aiming to invest between $750,000 and $1.5 million and take a 10% stake or more. The firm says it’s industry agnostic, but will be focusing on both consumer and enterprise tech with the new fund. It will also introduce the idea of “culture carry,” where the founders backed by the fund will split 1% of the carry — basically, they’re getting a stake in the fund’s profits and in each other’s success.

The focus on diversity extends to the limited partners who invested in Fund II, with 42% of LPs being women or people of color.

“We are focused on building an institution and platform to support diverse founders for many generations,” said Managing Partner Henri Pierre-Jacques in a statement. “Fund II is one step closer to our mission, but we know the work and journey continues. We are excited to provide more capital and resources to even more diverse founders tackling unique problems.”

Last week, Harlem Capital also announced that it had promoted Brandon Bryant to partner and Gabby Cazeau and Kelly Goldstein to principal.