Google-backed African startups raised $266 million in 3 years – Report
The Google Black Founders Fund offers startups $100,000 equity-free cash awards and up to $200,000 per startup in Google Cloud credits
African startups backed by the Google for Startups Black Founders Fund have collectively raised $266 million from VCs in the last three years.
This was revealed in a report by Google for Startups and Notion Capital, which measured the impacts of the Google initiative in Africa and Europe.
According to the report, startups backed in Europe have raised $91 million, bringing the total raised by the African and European startups to $379 million with the addition of the $100,000 initial investments.
The Google for Startups Black Founders Fund was established in 2021 to support Black entrepreneurs and address the longstanding disparities they face in accessing capital and resources.
Since then, Google said the Fund has supported 220 European and African companies, comprising 135 from Africa and 85 from Europe.
Job creation
While noting that the Black Founders Fund companies have raised $2.51 million on average, the report highlighted the impact of the startups in the area of job creation.
“Companies funded by Black Founders Fund have over 6,000 employees, which has grown from 902 in 2021—an increase of nearly seven times growth since the Fund commenced.
“African Black Founders Fund companies currently employ 4,059 employees. This is a more than four-time increase from the initial 1,050 in 2021 when the African fund commenced,” the report stated.
It added that Black Founders Fund companies are outperforming peers at the same growth stage—on average, growing 61% faster over a three-year period.
Investment gap
The report indicated that black founders in both Africa and Europe are less likely to receive funding, unlike their white counterparts. According to the report, this has created an investment opportunity gap of $4.2 billion in Europe and nearly $10 billion in Africa.
“Since 2000, $2.5 billion has been invested into Black-led tech businesses in Europe and Africa; however, this seemingly large figure represents just 0.51% of the total investment made into all startups.
“In Europe, 0.43% of all investment was made into Black-led startups ($2.09 billion, out of $482.5 billion), and in Africa, 3.11% of all investment was made into Black-led startups ($413 million out of $13.3 billion),” the report pointed out.
The report, therefore, advised startup stakeholders to collaborate with policymakers to advocate for policies that incentivise diversity in tech and address systemic barriers faced by Black founders in accessing capital.
It also called for the implementation of educational programs for investors to raise awareness about biases and challenges faced by underrepresented founders, fostering a more inclusive investment landscape.
The report emphasised strengthening community building to create a supportive ecosystem where Black founders can connect, collaborate, and share experiences.
The Google Black Founders Fund offers startups $100,000 equity-free cash awards and up to $200,000 per startup in Google Cloud credits.
In addition to equity-free cash awards, Black Founders Fund recipients receive ongoing Google mentorship, Google Cloud credits, and product support to help them navigate every stage of their startup journey.
In 2022, 23 Nigerian startups were part of the 60 African startups selected for the second cohort of the program. Some of the startups include Eden Life, Estate Intel, Healthtracka, Haul247, and Flexfinance, among others.
