A £3 million cash fund for black founder-led tech businesses has been announced by Google.
The Black Founders Fund, running for its second year, will be awarded to innovative European tech startups run by black founders.
Recipients will need to demonstrate how they’re using technology to solve everyday problems.
In return they will receive up to $100,000, plus $200,000 in credit to use towards Google’s cloud services and advertising support, and mentoring by industry experts.
The scheme, run by Google’s startup-focused arm, is supported by organisations such as the ad giant WPP, the private members’ club Soho House, and the law firm Allen & Overy.
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The first Black Founders Fund, launched last year, provided $2 million (£1.5 million) of funding to 30 black-led startups, including 20 in the UK such as Audiomob, an audio gaming specialist; Definely, a legal technology business; and Afrocenchix, founded by Rachael Corson, which sells products for afro and curly hair.
The 30 companies collectively raised an additional $63 million in follow-on funding — both cash grants and equity — and increased their headcount by a fifth.
Rachael Palmer, who heads up the programme at Google, said: “Many of last year’s startups are already generating significant returns for their early investors, that are in some cases more than ten 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.”
The fund was launched to help level the playing field for black founders who struggle to access capital. Research by Extend Ventures, which tracks investment barriers facing ethnic minority-led businesses, found that between 2009 and 2019 only 0.24 per cent of all venture capital available to UK startups went to just 39 black founders.
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Richard Robinson, co-founder of Robin AI, a legal technology business, told The Times earlier this year that improvements had been made in access to funding for ethnic minority founders in the last two years. “[In 2020] I felt like there were some things that really needed to change. But I have seen some progress since,” he said. “It is easier to get an [investor] meeting now than it was two years ago.”
Robin AI was one of a dozen companies founded by black entrepreneurs that were chosen by the UK consulate in New York to visit the city last month on a trade mission, where they met more than 100 US investors.
However, Robinson’s experiences of improved access to funding were not shared by some of the founders on the trade mission. Sharon Obuobi, founder and CEO of Oarbt, an non-fungible token business, said: “In my experience of talking to investors in the UK it continues to be difficult.”
