SAN FRANCISCO – SoftBank Group Corp. will make investments in 14 startups run by underrepresented founders, its Vision Fund chief Rajeev Misra has said.
The investments are part of the conglomerate’s Emerge accelerator program, which offers mentoring to entrepreneurs from underrepresented groups.
For the coming year, SoftBank is extending the program to Europe, and expanding it to two cohorts instead of one, Misra said, adding that the number could eventually grow to three. Misra spoke at Emerge’s online event Thursday where founders pitched investors, showcasing the first group of companies completing the program.
SoftBank’s 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 ¥32 billion ($300 million) in contributions or investments toward minority groups.
SoftBank will put at least ¥16 million into each of the companies, according to a person familiar with the company who asked not to be identified speaking about private details, but the final investment amounts will depend on the stage of each company. Many of the startups — in industries from health care to housing to driving technology — have already raised early rounds. Separately, capital could be available from the ¥10.6 billion Opportunity Growth Fund that will back founders of color.
Emerge and the Opportunity Growth Fund represent “meaningful, concrete steps to lowering the hurdles that I know remain too high for many of you,” 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, Misra said. “More than 90 percent of those founders we’ve had amazing experiences with,” he said. “Of course, there are some exceptions.” Adam Neumann, the co-founder of WeWork, created an embarrassing set of challenges for SoftBank, after its attempt at an initial public offering last year dramatically collapsed.
Some of the founders said SoftBank had already made key introductions. After the event, Megan Gray, who presented her automotive safety company Moment AI, said she had met with Vision Fund company Cambridge Mobile Telematics Inc., and that she is still working with its founders.
Accelerators have become a rite of passage for many of Silicon Valley’s top startups, but relatively few are devoted to underrepresented groups. Y Combinator 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 percent of people who received venture capital were black, according to a Harvard University study.
In recent years, venture firms have sprung up to back underrepresented founders, such as Concrete Rose Capital, whose founder Sean Mendy was in Emerge’s virtual audience on Thursday and called the companies “a super strong group.”
Lightspeed Venture Partners partner Mercedes Bent, who spoke at Emerge, said afterwards she was contacting some of the startups to discuss potential investments.
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