Startups supported by Google for Startups Black Founders Fund in Africa have collectively secured $266 million in venture capital funding over the past three years, a report by Google for Startups and Notion Capital has revealed.
The initiative, aimed at supporting Black entrepreneurs and addressing their longstanding challenges in accessing capital and resources, has also benefited startups in Europe, which raised an additional $91 million. Combined with the $100,000 initial investments, the total amount raised by these startups amounts to $379 million.
Since its establishment in 2021, the Black Founders Fund has supported a total of 220 companies across Africa and Europe, with 135 from Africa and 85 from Europe.
The report highlighted significant impacts on job creation attributed to the Black Founders Fund. Startups supported by the fund have seen substantial growth in employment, with over 6,000 employees collectively. This marks a nearly seven-fold increase from 902 employees in 2021. Specifically, African companies backed by the fund currently employ 4,059 individuals, a more than four-fold increase from the initial 1,050 employees in 2021.
The report also noted that companies supported by the Black Founders Fund are outperforming their peers at similar growth stages, achieving an average growth rate 61% faster over a three-year period.
However, it highlighted a significant investment gap for Black founders in both continents. Black-led startups in Europe and Africa are substantially less likely to receive funding compared to their white counterparts, resulting in a $4.2 billion investment gap in Europe and nearly $10 billion in Africa. Since 2000, only $2.5 billion has been invested in Black-led tech businesses in these regions, representing a small fraction (0.51%) of total startup investments.
To address these disparities, the report recommended collaboration between startup stakeholders and policymakers to advocate for policies that promote diversity in the tech sector and dismantle systemic barriers facing Black founders.
It also called for educational programs aimed at investors to raise awareness about biases and challenges encountered by underrepresented founders, fostering a more inclusive investment environment. Strengthening community building initiatives was also emphasized to create a supportive ecosystem where Black founders can network, collaborate, and share experiences.
The Google Black Founders Fund continues to provide equity-free cash awards of $100,000, along with up to $200,000 in Google Cloud credits to selected startups. Recipients also benefit from ongoing mentorship, product support, and access to Google Cloud services to aid their growth journey.
In 2022, 23 Nigerian startups were among the 60 African startups selected for the program’s second cohort, including notable names like Eden Life, Estate Intel, Healthtracka, Haul247, and Flexfinance, showcasing the fund’s impact and reach across the continent.
