Global tech giant Google has matched rhetoric with action towards promoting African based startups and women led businesses as part of its two new initiatives to support African-founded startups and women-led businesses in underserved communities on the continent. The programs include a $3 million Black Founders Fund for African startups and a $3 million Google.org grant to help women in low-income communities develop entrepreneurial skills and access funding.
Through the latter, Google is looking to support access to economic opportunity for women in sub-Saharan Africa with a $3 million grant to the Tony Elumelu Foundation (TEF). The foundation will then provide entrepreneurship training, mentorship, coaching, and access to networks and key markets for at least 5,000 women via its annual entrepreneurship program. In addition, seed capital in the form of one-time cash grants will be given to 500 African female informal business-owners in rural and low-income communities across Nigeria, South Africa, Kenya, and select francophone countries.
“We believe this will enable and prepare these women who otherwise wouldn’t have had the opportunity to navigate their independent business journey through the critical start-up and early growth phase,” Google said in a statement on its website.
The Google for Startups Black Founders Fund provides grants and technical assistance to early-stage startups led by black and diverse teams, with a goal of advancing the black community. Launched in 2020 as part of a series of racial equity commitments to close a funding gap experienced by black entrepreneurs, the program has seen proven success in the United States, Brazil, and Europe, according to Google.
The U.S. tech giant has now expanded the initiative to Africa, a continent where indigenous startups are faced with insufficient starting capital and a lack of angel investors, and also find it difficult to secure financial support.
According to Bosun Tijani, CEO of Co-Creation Hub (CcHub), which is partnering with Google on the Black Founders Fund Africa, the shortage of funding for African startups is driven by several factors.
“On the demand side, there is an increase in the number of ventures emerging to solve the pervasive challenges that exist. As the number of ventures increases, the requirement for funding increases,” Tijani was quoted as saying.
He adds that while there has been improved investor confidence as a result of the success stories that have come out of the ecosystem, investors remain skeptical about the potential for huge exit opportunities. “This highlighted risk often dampens the quantum of funding commitment the ecosystem gets.”
In addition, the number of African venture capital firms closing their funding rounds is not growing as quickly as the number of emerging ventures; institutions with long-term liabilities (such as insurance companies, pension funds, endowments) that match the VC asset class are not willing to support the development of the ecosystem because it’s still nascent; and there are not enough government incentives required to encourage investments into the tech ecosystem.
In light of these challenges, Google plans to allocate the $3 million non-dilutive fund across a pipeline of 50 investable startups in Africa, with each firm receiving up to $100,000 in equity-free cash awards. Each selected company will also receive $220,000 in Google Cloud Credits and Ad Grants, as well as mentoring, technical, and scaling assistance.
The company is working with the CcHub, a leading tech community hub with a presence in Nigeria, Kenya, and Rwanda, to distribute the funding to the 50 selected companies across Africa.
The CcHUB team will be actively involved in the process providing insight and technical support from the selection process through to the final deployment of the capital, according to Tijani. “We will monitor and evaluate the performance of the companies that benefit from this catalytic funding,” he said.
Apart from having a black founder, the Black Founders Fund Africa (BFFAfrica) is looking for a startup that is headquartered in Africa or has a legal presence on the continent; building for Africa and a global market; creating jobs, has growth potential to raise more funding, and making an impact; has proven 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 directly supporting the black community, and have the relevant expertise on board to be successful (either through their background or an assembled team).
In addition, Google is looking for technology startups with a live product in the market or businesses where technology is core to their ability to scale (not for consultancies or not-for-profits) as well as compatibility with Google products.
The inaugural funding for Africa is open to startups in 13 countries – including Botswana, Cameroon, Côte D’Ivoire, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and Zimbabwe.
“We welcome all startups in these countries that meet the criteria to apply. Female-led startups that meet the criteria are also strongly encouraged to apply,” Tijani said.
Applications for the Fund are currently open until July 7th and eligible startups can visit goo.gle/BFFAfrica now to apply.