Deal To Watch: The Networking Platform for Professional Diversity

Key Stats:

Summary

Divercity.io has been selected as a “Deal To Watch” by KingsCrowd. This distinction is reserved for deals selected into the ​top 10% -20% of our deal diligence funnel​. If you have questions regarding our deal diligence and selection methodology, please reach out to ​hello@kingscrowd.com​.

Problem

Women account for just 16% of executive team members across the United States.  Women of color? Even less. This is specifically problematic in the rapidly growing tech industry. And not only does improving these statistics create a more welcoming, inclusive, environment, it actually correlates with improvements in financial returns.  

Specifically, “companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians. Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.”

There are, however, very few platforms strictly dedicated to connecting underrepresented individuals and recruiters or companies looking to diversify. And since the advent of Linkedin, people have been turning more and more to their personal networks throughout the job search and hiring process. 

Solution

Divercity.io is attempting to demystify the hiring of diverse candidates by creating a networking platform unique to minorities and underrepresented individuals. The platform is fully-functional across mobile and web platforms. Features include job posting, group creation, real-time mobile chatting, and diversity rankings. 

The company’s revenue model calls for a monthly company subscription fee that can vary from $100-$1000 based on company size. In addition, there is a referral fee for staffed candidates that is 15-20% of 1st year base per candidate.

So far as professional networking goes, Linkedin broadly covers the professional networking portion of the market and was acquired by Microsoft in 2016 for $26.2 billion. This leaves room for vertical growth in the professional networking market for more niche user bases.  

A few of these niche users base platforms have cropped up for underrepresented minorities in the job market.  Jopwell is one such platform dedicated to the advancement of ethnic minorities in school and in the workplace.  Jopwell, though a more established competitor, does not have chat functionality, diversity ratings, and the group creation feature offered by Divercity.io. Other popular networking sites like AngelList and GlassDoor lack a minority-advancement focus. 

Divercity.io further differentiates through user-reported demographic data, centralized special-interest communities, and the development of a proprietary AI recommender and collaborative filtering engine.

The Team

Founder and CEO, Chuka Ikokwu, holds an MBA from MIT’s Sloan School of Management. He has past experience as the Senior Manager of Analytics at Warner Brothers and was Head of Data Analytics at Unity Technologies. Most recently, he served as the Senior Data Analytics Specialist at Hush, Inc.

Cofounder, Onuwa Uzor, continues to act as a Senior Manager at Ernst & Young. He has spent 13+ years at the company and became one of the youngest partners in the company’s history.  He holds a Master’s degree in Accounting from the University of Virginia.

Market Size and Early Traction

The Divercity.io team has identified a significant pain point in the social networking market which brought in over $40 billion in revenue in 2019 and has a steady annual growth rate at around 29%.  In addition, the staffing and recruiting market size in the US sits at $148 billion and is expected to increase to $157 billion in 2020.  Capturing even a fraction of this market could yield large returns.

Since its launch, Divercity.io boasts a five-star rating in both app stores. In addition, 7,000 members and 3,000 jobs have been added to the network.

In 2018, Warner Brothers became the first customer of the platform. Since its adoption, Amplitude, and Unity Technologies, and STARZ, and other tech companies joined the platform. In addition, Divercity.io has partnerships with ZipRecruiter and greenhouse.io.

Why We Like it

• Impressive Early Adopters: By kicking off customer acquisition with Warner Brothers, the team set itself up for early success. Backing from such a large corporation grounds trust in the product and Divercity.io has since seen growth in its customer base.

• Scalability and Untapped Market Potential: By entering into the intersection two large markets, social networking and recruiting, Divercity.io positions itself well for large returns or a positive acquisition. This vertically-focused professional network also proves to be quite scalable and differentiated from other players in the field.
• Organic User Traction: The 7000+ users and 3000+ job posting already on the site are entirely organic, proving that the team has identified and perhaps solved a significant market pain point.

The Rating: Deal To Watch

Divercity.io is a Deal To Watch.

Though the field of professional networking services is crowded with large incumbents like LinkedIn that offer broad services, there are few legitimate contenders vertically focused on servicing minority professionals. 

It’s not hard to imagine an acquisition event at some point in the future;  LinkedIn was acquired by Microsoft for $26.2 billion. In addition, this space is particularly relevant as the pressure to increase diversity in the workplace mounts and the financial benefits of inclusive networks become more well-known.

Challenges lie ahead in gaining and retaining both users and customers, as well as continuing to differentiate, but with strong early adopters, including Warner Brothers leading the way. For this startup, we think the future looks promising.