Google for Startups has upped its investment in UK black-led tech start-ups, giving founders an opportunity to receive $4m (approximately £3m) to help fund their businesses and tackle the inequality in venture capital.
Since launching last year, the has doubled the value of the grant. In 2021, start-ups were offered $2m, which was distributed by OneTech, an organisation supporting under-represented founders. The funding went to 30 black-led start-ups across Europe, including 20 in the UK.
ITV and WPP are among the companies partnering with the Black Founders Fund to provide support for recipients.
Last year, ITV invited start-ups to take part in the network’s industry-leading programme, which provides £1m worth of airtime and production in 2022, equity free. WPP also offered founders access to the company’s creative agencies as well as providing marketing expertise that would help start-ups reach their audiences.
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, one-to-one mentoring by industry experts, and connections within Google’s network.
Before this initiative, less than 0.25% of venture capital funding went to black-led start-ups in the UK and only 38 black founders received venture capital funding in the past 10 years.
Last year’s recipients increased their staff by 21% and raised an additional $63m in follow-on funding. Seven of the 16 black women to receive funding in the UK were part of the Black Founders Fund programme and eight of the founders were featured in Europe’s top 10 Black Founders to Watch.
“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,” Marta Krupinska, head of Google for Startups UK, said.
“This is why we’re excited to double this year’s fund, to scale our efforts to support black start-up founders and help address inequality in VC funding.”
Rachael Palmer, head of VC and startup partnerships, EMEA at Google, added: "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 organisations 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."
Ade Rawcliffe, group director of diversity and inclusion at ITV, described the UK as "one of the most start-up-friendly environments in the world".
She continued: "Yet, black start-up founders are underserved in access to venture capital. According to an Atomico report, while black and multi-ethnic communities represent 14% of the UK population, all-ethnic teams received 1.58% of all venture capital funding.
“In order to change this, we must work together. We are very grateful to Google for its highly successful European Black Founder Fund initiative and are super excited we can join it and WPP in providing £1m of airtime and therefore even more value to black founders.”
Karen Blackett, WPP UK country manager and GroupM UK chief executive, said: “Developing an innovative idea, product or service is only the start. In order to grow your business you need to be able to communicate your vision and reach your audiences in a meaningful way.
“We know that starting a business is hard enough without tackling additional barriers as a black founder, and WPP is proud to provide pro bono training and support through Google’s European Black Founder Fund to these start-ups that will become the global business leaders of the future.”
The 2021 UK-based founders included Audiomob, a non-intrusive audio gaming specialist; Definely, a legal technology business; Scoodle, an education influencer platform; and Afrocenchix, a natural hair care ecommerce business.
“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,” Ismail Jeilani, chief executive and co-founder of Scoodle, explained.
“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.”
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