(Bloomberg) -- Morgan Stanley is preparing to invest one million pounds ($1.36 million) in five startups led by women or ethnic minorities in Europe, the Middle East and Africa, expanding a program that's run for the past four years in the U.S.
The Wall Street bank aims to help groups that often struggle to find seed capital. According to Morgan Stanley, less than 3% of venture capital invested in the U.K. over the past decade went to teams led entirely by women and less than 2% to ethnic minority founders. Total funding for European startups and scaleups rose to 12 billion euros ($13.9 billion) last year, according to trade body Invest Europe.
“Whichever way you look at the numbers, it's a bit appalling,” said Sanghamitra Karra, a managing director specializing in risk management, who is running the program in London. “We need to start a conversation and bridge the funding gap and we want to keep the momentum going.”
Applications will open in January for the London-based Multicultural Innovation Lab, with successful founders getting 200,000 pounds each to develop their businesses. Morgan Stanley said it was focused on startups building “technology solutions that promote a more inclusive and sustainable future.”
Entrepreneurs will also get access to Morgan Stanley mentors and advisers for five months before a ‘demo day' where they will pitch their businesses to invited investors. More than a hundred Morgan Stanley employees will be involved in the European lab, including some of its most senior bankers.
Originally started in the U.S. in 2017, Morgan Stanley's program has invested in more than 50 startups through that have gone on to raise over $80 million in further funding. Carla Harris, vice chair of global wealth management, leads the initiative globally along with managing director Alice Vilma.
“Establishing a platform in London giving access to critical advice, experience and funding to women- and minority-owned enterprises is not only something we are well-positioned to offer, but also allows us to address a significant market inefficiency,” said Clare Woodman, Morgan Stanley's head of EMEA and co-sponsor of the EMEA Lab.
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