The 25 African-based start-ups selected for this year’s $4 million (R73m) Black Founders Fund were announced by Google for Start-ups (GfS) yesterday, with three from South Africa.
Selected from South Africa were:
– Excel At Uni (South Africa): Supports student funders via digital services.
– HealthDart (South Africa): Digital HMO providing end-to-end health services with insurance.
– Zinacare (South Africa): Online platform for accessible, affordable healthcare services.
The Black Founders Fund, now in its third year, aims to help tackle systemic racial inequality in venture capital (VC) funding by providing equity-free grants and mentoring to early stage black-led high-growth businesses across Europe and Africa.
Folarin Aiyegbusi, the head of Startups Ecosystem, Africa at Google, said start-ups played a major role in advancing Africa’s digital transformation.
“We look forward to working with this group of innovative founders who are using technology to solve some of the most pressing challenges in Africa. The Google for Startups Black Founders Fund is committed to addressing the stark inequality in VC funding by providing black founders with the resources and support they need to succeed,” Aiyegbusi said.
The selected cohort of 40 start-ups from Europe and Africa included 25 African start-ups. Start-ups led or co-founded by women made up 72% of the group, highlighting the role women played in shaping Africa’s start-up ecosystem.
Google said the funding would provide the businesses with the capital needed to take their ventures to the next level and expand to new markets, supercharging economic opportunities and job creation.
Each selected start-up would receive up to $150000 in non-dilutive cash awards, up to $200000 in Google Cloud credits, Ad support, 1:1 mentoring by industry experts and invaluable connections within Google’s network.
Google said since its inception, the Black Founders Fund has facilitated over $205m in investor conversations, representing a 12-fold increase. This had sparked significant growth within the participating start-ups, with their combined monthly recurring revenue now exceeding $6.1m, marking a 7% increase.
However, less than 1% of gross domestic product in Southern Africa was invested in private equity, it said.
“As a result, a significant funding gap exists in the growth stage sector-businesses that are too big for venture capital funding, or need follow-on funding, but considered too small for traditional private equity investors. In fact, there is an estimated funding gap of between R86 billion and R346bn because SMEs cannot unlock traditional financing,” Google said.
Ifedayo Durosinmi-Etti, the founder of Herconomy, selected for the 2023 Fund, said at Herconomy they were on a mission to re-imagine the financial landscape for women in Africa.
“Being chosen for the prestigious 2023 Black Founders Fund will fuel our revolutionary vision and accelerate our progress. With the funding and support provided by the programme, we will expedite the development of our innovative solutions, enhance support for our valued customers, and expand our presence on an international scale,” Durosinmi-Etti said.
BUSINESS REPORT