For the second year running, Google is giving out equity-free money of between $50,000 and $100,000 to Black founders of early-stage startups in Africa, raising the number of beneficiaries from 50 to 60.
Nigerian startups make up a third of the 2022 cohort having constituted half of last year’s. Startups from Kenya, South Africa, Rwanda, Cameroon, Ghana, Senegal, Ethiopia, Uganda, and Botswana were also funded. The 100-plus companies from both cohorts are spread across various sectors including food, media, and travel, but the majority are in fintech, logistics, and healthcare.
What is Google’s Black Founders Fund?
Google started its Black Founders Fund as a commitment to invest in Black entrepreneurs. It followed the wave of concern in 2020 after the George Floyd protests in the US that venture capitalists disproportionately focused on white founders.
That concern has been heard in Africa too, especially in Kenya where there continues to be a perception that white founders who spring from the region’s expatriate community have easier access to financing.
And so besides its $5 million fund for Black-founded US startups, Google set up a $3 million fund for Africa to complement its other projects on the continent, from the Equiano subsea cable that has landed in Togo and Nigeria to a $50 million venture capital fund (this one is equity-based). The Black Founders Fund in Africa for this year was raised to $4 million.
Startups in last year’s program include Kenyan logistics company Marketforce, Nigeria-based e-commerce enabler Bumpa, and Bongalo, the Rwandan AirBnB-like company. Together the cohort has gone on to raise $97 million as of Sept. 5, Folarin Aiyegbusi, who heads the company’s startup ecosystem programs in Africa, tells Quartz.
A new gender milestone
And unlike last year, Google is funding an equal number of men and women-founded startups. Healthtracka, one of the women-founded startups from Nigeria, launched in May last year.
“We have been intentional in attempting to hit gender parity and we’ve done that through our marketing efforts. So we have more women on our campaign materials but the selection process was purely a meritocracy,” Aiyegbusi said.
Google will not directly make money from the $4 million it is disbursing this year. But as they grow, the size of the startups’ operations could see them become large-scale customers of the tech giant’s cloud services and other offerings. In addition to the cash grant, the Black Founders Fund program is offering $200,000 in Google cloud credits to beneficiaries.
African startups raised $5.2 billion last year in deals where the average seed round was over $1 million. Will Google’s grants move the needle for its Black founders in Africa?
“It’s very easy for us to assume that $100,000 is small from a global perspective, but a dollar in Europe and America is almost worth $10 in Africa,” Aiyegbusi said. He expects the startups from this year to build on the grants to raise more funding over the next year, despite the prevailing climate of skepticism among venture capitalists.