Google has committed $6 million to African technology startups and women-led businesses
Google has committed $6 million to African technology startups and women-led businesses
Google announced the launch of two new initiatives aimed at assisting African-founded startups and women-led businesses operating in underserved communities across the continent.
Among the programs are a $3 million Black Founders Fund for African startups and a $3 million Google.org grant to assist women in low-income communities in developing entrepreneurial skills and gaining access to capital.
Google is aiming to support women's economic opportunity in Sub-Saharan Africa through the latter, with a $3 million grant to the Tony Elumelu Foundation. Through its annual entrepreneurship program, the foundation will then provide entrepreneurship training, mentorship, coaching, and access to networks and key markets to at least 5,000 women.
Additionally, 500 African female informal business owners in rural and low-income communities across Nigeria, South Africa, Kenya, and select francophone countries will receive seed capital in the form of one-time cash grants.
“We believe that this will enable and prepare these women who would not have had the opportunity to navigate their independent business journeys through the critical start-up and early growth phases,” Google stated on its website.
The African debut of the Black Founders Fund
The Google for Startups Black Founders Fund awards grants and provides technical assistance to early-stage companies led by black and diverse teams with the goal of advancing the black community.
Launched in 2020 as part of a series of racial equity commitments aimed at bridging the funding gap faced by black entrepreneurs, Google reports that the program has seen proven success in the United States, Brazil, and Europe.
The US technology behemoth has now expanded the initiative to Africa, a continent where indigenous startups face limited starting capital, a scarcity of angel investors, and a lack of financial support.
According to Bosun Tijani, CEO of Co-Creation Hub (CcHub), which is collaborating with Google on the Black Founders Fund Africa, the African startup funding gap is caused by a number of factors.
“On the demand side, the number of ventures emerging to address pervasive challenges is increasing. As the number of ventures grows, so does the need for funding,” Tijani told TechCabal.
While investor confidence has increased as a result of the success stories emerging from the ecosystem, investors remain skeptical of the potential for massive exit opportunities. “This highlighted risk frequently reduces the amount of funding committed to the ecosystem.”
Additionally, the number of African venture capital firms closing funding rounds is not growing at the same rate as the number of emerging ventures; institutions with long-term liabilities (such as insurance companies, pension funds, and endowments) that align with the VC asset class are hesitant to support the ecosystem's development because it is still in its infancy; and there are insufficient government incentives.
In light of these obstacles, Google intends to distribute the $3 million non-dilutive fund among a pipeline of 50 investable African startups, with each receiving up to $100,000 in equity-free cash awards. Additionally, each chosen company will receive $220,000 in Google Cloud Credits and Ad Grants, as well as mentoring, technical, and scaling support.
The company is partnering with CcHub, a leading technology community hub with locations in Nigeria, Kenya, and Rwanda, to distribute the funding to the 50 selected businesses throughout Africa.
According to Tijani, the CcHUB team will be actively involved in the process, providing insight and technical support throughout the selection process and final deployment of the capital. “We will monitor and evaluate the performance of the businesses that receive catalytic funding,” he explained.
Which startups are eligible to apply?
Apart from having a black founder, the Black Founders Fund Africa (BFFAfrica) is looking for startups that are headquartered in Africa or have a legal presence on the continent; are building for Africa and a global market; are creating jobs, have the potential to raise additional funding, and are making an impact; and have demonstrated early traction (product in the market / pilots / MVP live / early revenue).
The founding team should be diverse, with at least one black C-level founding member; it should be committed to directly supporting the black community, and it should possess the necessary expertise to succeed (either through their background or an assembled team).
Additionally, Google is looking for technology startups that have a live product on the market or businesses that rely on technology to scale (not consultancies or not-for-profits), as well as compatibility with Google products.
Africa's inaugural funding round is open to startups in 13 countries, including Botswana, Cameroon, Côte D'Ivoire, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Rwanda, South Africa, Tanzania, and Uganda.
“We encourage all startups in these countries to apply if they meet the criteria. Female-led businesses that meet the criteria are also encouraged to apply,” Tijani said.
Applications for the Fund are now open until July 7th, and interested startups can apply at goo.gl/BFFAfrica.
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