Ami Colé, a beauty startup focused on makeup for darker skin tones headquartered in New York, will cease operations in September 2025.

Founded by Diarrha N’Diaye-Mbaye in 2021, the company gained recognition for its inclusive beauty products and was sold through retailers such as Sephora.

N’Diaye-Mbaye, one of the few Black women to secure over US$1 million in venture capital, announced the closure in an article for “The Cut”.

She attributed the decision to challenges in sustaining the business within the current market.

Ami Colé raised over US$3 million in funding from investors including G9 Ventures, Greycroft, and angel investors like Hannah Bronfman.

The closure highlights broader challenges faced by Black-founded startups.

Venture funding for Black entrepreneurs has decreased in recent years.

N’Diaye-Mbaye mentioned pressures from investors and competition with larger companies, despite having a loyal customer base.

Ami Colé did not respond to requests for comment.

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🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Post-2020 DEI funding surge followed by sharp decline creates challenging environment for Black founders

Ami Colé’s closure reflects a broader pattern of declining support for Black-founded startups after an initial surge following George Floyd’s murder in 2020.

Black founders received only 0.4% of total startup funding in 2024, representing a multi-year low and demonstrating how quickly investor enthusiasm for diversity initiatives has waned 1.

N’Diaye-Mbaye directly acknowledged this shift, noting that some investors’ attitudes toward equity and “betting big on inclusivity” had noticeably changed from what she experienced in 2020, contributing to the company’s sustainability challenges.

The funding landscape for Black entrepreneurs has become increasingly difficult despite specialized programs emerging to address the gap, with organizations like Black Ambition Prize and Google for Startups Black Founders Fund attempting to counter this trend 1.

This pattern shows how short-term corporate commitments to diversity without sustained structural changes can leave founders vulnerable when market sentiments shift.

2️⃣ Beauty startups face unique challenges balancing sustainability and investor growth expectations

N’Diaye-Mbaye’s experience highlights the common tension between building a sustainable beauty business and meeting the aggressive growth expectations of venture capital investors.

Her company struggled with the retail reality of inconsistent sales, “one week selling straight through, and another not moving a unit,” while simultaneously facing pressure to compete with larger companies with deeper pockets for marketing.

The beauty market’s competitive nature makes it particularly challenging for startups to achieve the rapid scaling that venture capital typically demands, especially when competing against established players with extensive marketing budgets and distribution networks.

Ami Colé’s story demonstrates how venture funding, while enabling initial growth, can sometimes create misaligned incentives that prioritize rapid expansion over building a sustainable customer base.

3️⃣ Market opportunity for inclusive beauty products remains strong despite individual brand challenges

Despite Ami Colé’s closure, significant evidence suggests the market for inclusive beauty products continues to grow, particularly for consumers with deeper skin tones who have been historically underserved.

Black Americans represent 12.5% of the U.S. beauty market with significant purchasing power, creating a substantial economic opportunity for brands that effectively address these consumers’ needs 2.

Content creator Golloria George’s viral digital series highlighting the lack of inclusive shade ranges demonstrates ongoing consumer demand for better options, while the “Fenty Effect” has catalyzed increased product development for diverse skin tones across the industry 2, 3.

The emergence of successful Black-owned beauty brands like Danessa Myricks Beauty and Topicals shows that companies meeting these needs can achieve impressive engagement and market presence when properly supported 4.

This suggests that while individual startups may face challenges, the fundamental market opportunity that Ami Colé was pursuing remains valid and potentially lucrative for companies that can navigate the complex beauty retail landscape.

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