Google supports black-led tech start-ups in hunt for venture capital

Recipients of last year’s inaugural fund have gone on to raise $63 million in funding and hire 21 per cent more staff.

Ethnic minority women are paid significantly less than their average male colleagues (Picture: Getty)

WITH ‘BLACK start-up founders’ being ‘underserved in access to venture capital’, according to Ade Rawcliffe, the ITV Group Director of Diversity and Inclusion said the organisation was delighted to be involved with Google for Startups.

Rawcliffe was speaking in the week that UK-based Black-led tech start-ups were being invited to apply for this year’s Black Founders Fund, worth a total of approximately £3 million, in an effort to help tackle the stark inequality in venture capital (VC) funding.

The Black Founders Fund will be awarded to the most innovative, Black-led tech start-ups across Europe with business plans that showcase how they’re using technology to pioneer creative solutions to all sorts of challenges.

Google for Startups will give each successful company up to $100,000 in non-dilutive cash awards, $200,000 in cloud credits and ad support, 1:1 mentoring by industry experts, and invaluable connections within Google’s network. 

“The UK is one of the most start-up-friendly environments in the world. Yet, Black start-up founders are underserved in access to venture capital,” Rawcliffe highlighted.

“According to an Atomico report, while Black and Multi-Ethnic communities represent 14 percent of the UK population, all-ethnic teams received 1.58 per cent of all venture capital funding.

“In order to change this, we must work together. We are very grateful to Google for their highly successful European Black Founder Fund initiative and are super excited we can join them and WPP in providing £1 million of airtime and therefore even more value to Black Founders.”

The first Black Founders Fund, launched last year, offered $2 million worth of funding to 30 Black-led start-ups across Europe, 20 of which are located in the UK.

The funds were distributed by OneTech, a London based organization supporting underrepresented founders.

Prior to the program’s launch in 2020, less than 0.25 per cent of venture capital (VC) funding went to Black-led start-ups in the UK and only 38 Black founders received venture capital funding in the last 10 years. 

Marta Krupinska, Head of Google for Startups UK said: “When we launched the Black Founders Fund last year, we received almost 800 applications from across Europe from truly incredible businesses, putting to bed the myth that the lack of representation in the start-up space is due to a pipeline problem.

“This is why we’re excited to double this year’s fund, to scale our efforts to support Black startup founders and help address inequality in VC funding.”

The success of last year’s cohort shows the impact that direct and targeted support can have in helping to level the playing field, by supporting Black founders who are disproportionately locked out of access to capital.

Across Europe, the founders raised an additional $63 million in follow-on funding and increased their headcount by 21 per cent.

In 2021, seven of the 16 Black women to receive funding in the UK were part of the Black Founders Fund program and eight of the founders were featured in Europe’s top 10 Black Founders to watch.

Last year’s UK-based founders represented a wide variety of industries, ranging from advertising, beauty, education, fitness, and healthcare and included: Audiomob – non-intrusive audio gaming specialist – raised a $14m (£10m) in Series A, Definely – a legal technology business – raised $3m (£2.2m) in seed funding, Scoodle – the education influencer platform – raised $1.9m (£1.4m) in a seed funding round and Afrocenchix – the natural haircare e-commerce business – raised $1.2m (£896k) in its seed funding round.

Ismail Jeilani, CEO and co-founder of Scoodle, said: “Beyond cash, one of the most valuable things that any investor can provide is the stamp of approval, or the recognition and signal in the market.

“That’s something that we can’t even quantify. It’s powerful to go into meetings being able to say that we’ve received funding and support from Google.

“That in itself elevates us to a certain level that may not have been there without Google. Since receiving the funding, we’ve tripled our monthly active users and raised additional capital.”

ITV, WPP,  Soho House, and Allen & Overy partnered with Google for Startups to provide support to last year’s grant recipients. ITV gave eligible UK-based start-ups the opportunity to take part in the network’s industry-leading program which provides £1 million worth of airtime and production in 2022, equity free.

TV ready start-ups – those with backend operations that could meet the demand TV would create – attended bespoke media education workshops to help familiarize them with the world of TV marketing.

The founders of these businesses were also offered media planning and pilot spot production sessions to help bring their TV ads to life. 

Rachael Palmer, Head of VC and Startup Partnerships, EMEA, Google said: “Many of last year’s start-ups are already generating significant returns for their early investors, that are in some cases more than 10 times higher than the initial investment in less than a year.

“The fund’s recipients have clearly demonstrated that there’s a whole world of untapped potential within the Black community and many overlooked investor opportunities. We’re keen to unlock even more of this talent.

“That’s why we’re doubling this year’s fund and inviting organizations that share our vision to join us in helping to transform the start-up ecosystem, and facilitate more equal access to funding, so we can go further together.”

The Black Founders Fund is just one of the ways that Google is working to help support historically underrepresented groups.

In addition to contributing to economic opportunities with this fund and Youtube’s Black Voices Fund our company is working to improve representation at senior levels internally.

Externally, Google is working to ensure that its products help Black users, examples of this include the inclusive Real Tone technology on the camera of the Pixel 6, which helps to more accurately portray the skin tone of different ethnicities, as well as the Black-owned feature on Search and Maps which helps people to find and support Black-owned local businesses.

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