Abu Dhabi, UAESaturday 28 November 2020

SoftBank will invest in 14 companies run by founders from minorities

The Japanese conglomerate will invest at least $150,000 into each company but the final amount will depend on the individual stage of the firm

Rajeev Misra, head of SoftBank's Vision Fund, said the company is looking to support entrepreneurs from underrepresented groups. Reuters
Rajeev Misra, head of SoftBank's Vision Fund, said the company is looking to support entrepreneurs from underrepresented groups. Reuters

SoftBank will make investments in 14 start-ups run by underrepresented founders, its Vision Fund chief Rajeev Misra said.

The investments are part of the Japanese conglomerate’s Emerge accelerator programme, which offers mentoring to black entrepreneurs and others from underrepresented groups.

For the coming year, SoftBank is extending the programme to Europe, and expanding it to two cohorts instead of one, Mr Misra said, adding that the number could eventually grow to three.

The Emerge accelerator was developed before the current focus on race in Silicon Valley, driven by the protests around the killing of George Floyd in May.

Since then, many technology companies have spoken out in support of black people in the industry and have cumulatively pledged more than $300 million (Dh1.1 billion) in contributions or investments towards the minority groups.

SoftBank will put at least $150,000 into each of the companies, according to a person familiar with the company. However, the final investment amounts will depend on the stage of each company.

Many of the start-ups - in industries from health care to housing to driving technology - have already raised early rounds. Separately, capital could be made available from the $100m Opportunity Growth Fund that SoftBank rolled out earlier this month.

Emerge and the Opportunity Growth Fund represent “meaningful, concrete steps to lowering the hurdles that I know remain too high for many of you,” Mr Misra said.

In addition to the capital injection, SoftBank plans to introduce the Emerge founders to other SoftBank companies, including those in SoftBank’s massive investment vehicle, the Vision Fund, Mr Misra said.

“More than 90 per cent of those founders we have had amazing experiences with,” he said. “Of course, there are some exceptions.”

Some of the founders said SoftBank had already made key introductions.

Megan Gray, founder and chief executive of the automotive safety company Moment AI, said she has already met with Vision Fund company Cambridge Mobile Telematics and that she is working with its founders.

Accelerators have become a rite of passage for many of the Silicon Valley’s top start-ups, but relatively few are devoted to underrepresented groups.

Y Combinator, an American seed money start-up accelerator, has created initiatives such as the Female Founders Conference, but the industry still suffers from a dramatic racial and gender imbalance, in particular for black people.

From the early internet days of 1990 to 2016, just 0.4 per cent of people who received venture capital were black, according to a Harvard University study.

Updated: June 19, 2020 11:10 AM

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