C4 launches Untapped funding scheme for ‘overlooked’ company founders
Channel 4 has launched an investment initiative that aims to find new revenue from non-traditional business founders who have been “overlooked” by the venture capital funding ecosystem.
The public-service broadcaster has launched Untapped, led by its consumer investment arm Channel 4 Ventures, and will seek to invest in high-growth business led by founders with a “broader range of profiles” based on their gender, education, socioeconomic history, race and ethnicity.
Vinay Solanki, head of Channel 4 Ventures, said: “Untapped will enable Channel 4 to invest in and incubate high-growth businesses, delivering significant commercial returns to drive forward Channel 4’s distinctive remit.
“The data implies that a wide range of talented founders leading attractive commercial organisations are being overlooked by the current ecosystem and we are committed to identifying and backing them. More broadly, Untapped can be a catalyst to grow the UK consumer investment landscape and encourage others to follow in the investment space.”
Channel 4 Ventures has committed to taking a significant proportion of potential deals from Untapped to its investment committee for approval each year — something that, it said, would channel millions of pounds of media value into a “new wave” of entrepreneurs.
The initiative is meant to generate new revenue for Channel 4, which began a programme of job cuts at the beginning of the year in response to sharp decline in linear TV ad revenue last year. CEO Alex Mahon forecast the drop to be 14% in 2023.
Each of the UK’s major TV broadcasters have launched some form of “airtime-for-equity” scheme in recent years, in which they gave startups the chance to advertise on TV for the first time in exchange for a minority stake in the business.
Channel 4 Ventures first launched as the Commercial Growth Fund in 2015, followed by UKTV Ventures in 2018 and ITV AdVentures in 2021. Sky Media has a cross-functional Direct to Scale team that aims to help fast-growing direct-to-consumer and performance-led brands with their next stage of growth, while Channel 5 used to have a media-for-equity set-up investing in internet companies in the early 2000s.
Founders: An elite group
The initiative is informed by research using publicly available data from LinkedIn and PitchBook, which found that the overwhelming majority (94%) of company founders were men, despite men representing less than half (41%) of all UK graduates. Channel 4 Ventures benchmarked the profiles of hundreds of founders who secured investments valuing their companies at £100m or more since 2013.
The research also revealed:
>> Founders are 51 times more likely to have graduated from an Oxbridge university or its US equivalents than a university outside the top 100 institutions globally.
>> Consumer companies in London, Oxford or Cambridge are 11 times more likely to have raised a valuation of £100m-plus than a company located anywhere else in the UK.
>> White university graduates are 10 times more likely to have founded a consumer company at a valuation of £100m-plus than a black graduate and nearly twice as likely as an Asian graduate.
>> Two-thirds (67%) of founders were either previous founders or came from within the traditional startup/investor ecosystem.
Channel 4 is inviting proposals by 17 April and will run a series of Untapped roadshows across the UK.