The SoftBank Group logo in Tokyo.
Philip Fong | AFP via Getty Images
LONDON – SoftBank aims to put your money in diversity.
SoftBank Investment Advisers, which manages the Japanese conglomerate’s Vision Fund for technology investment, said Wednesday that it will launch its Emerge accelerator program focused on diversity in Europe.
The company first introduced Emerge last year in the US with WeWork Labs, the office rental company’s startup incubator, to support 14 startups whose founders come from underrepresented backgrounds. SoftBank says it has invested $ 5 million in 13 startups in the program so far.
Now, SoftBank is bringing Emerge to Europe, but with a twist. This time, it is bringing in Speedinvest and other notable venture capital investors on the continent to provide access to a broader network of potential investors and partners.
“Softbank is a famous late-stage investor, with massive global successes,” like Uber, Speedinvest co-founder and managing partner Oliver Holle told CNBC in an interview. “But they are not prepared to invest in those initial stages of business creation.”
Other venture funds participating in the European program include Breega, Cherry Ventures, firstminute capital and Kindred.
Start-up acceleration programs are a common way for entrepreneurs to access mentorship in the early days of building their business. Today, many well-known tech companies have applied for acceleration schemes and launched successful businesses, including Stripe, Airbnb, and Coinbase.
Catherine Lenson, Managing Partner and Human Resources Director at SoftBank Investment Adivsers.
Two key differences between conventional acceleration programs and SoftBank’s is that SoftBank not only targets black and other minority founders, but also invests in companies.
“It went from being an accelerator of connections, tools, networks and opportunities to being an accelerator that financed companies in the end,” Catherine Lenson, managing partner and director of human resources at SoftBank Investment Advisers, told CNBC.
Last year, the murder of George Floyd and subsequent Black Lives Matter protests against police brutality and racism sparked boardroom discussions about how companies should address diversity. Tech is a sector that has gotten a bad rap for diversity, with predominantly white and male people working in the industry.
Several technology investors, including SoftBank and Andreessen Horowitz, have come up with initiatives aimed at addressing the problem. Some companies, like London-based Ada Ventures, endorsed new standards for venture capital that bring diversity to the forefront of investment decisions.
In Europe, about 91% of venture money went to startups with all-male founding teams last year, according to a report by Atomico. And 62% of underrepresented founders had a harder time raising cash, up from 31% in 2019.
“What we are seeing is that founders from diverse backgrounds were going through incredible incubators very early in their lives,” Lenson said. But “when they got to later funding rounds, what we found was that the doors were still closing on them,” he added.
SoftBank’s Emerge program, which lasts eight weeks, will be open to a cohort of early-stage companies that already have a viable product with potential to scale, and at least one founder who identifies as non-white, female, LGBTQ +, disabled. or a refugee.
Investors would then back the seed rounds of successful startups, with SoftBank pumping up to $ 2.5 million and Speedinvest matching this sum, Holle said. The other private equity firms would participate with lower commitments.
Due to the coronavirus pandemic, SoftBank was unable to run its 2020 program in person as originally planned. Lenson said the same would happen this year, however he hopes there may be an in-person component as travel restrictions ease in the coming months.
Emerge is not SoftBank’s first diversity-focused investment initiative. The company also created a $ 100 million “Opportunity Fund” for minority-owned businesses, for example. However, SoftBank does not have the best track record of supporting diverse teams, having invested in only a handful of companies created by black or female founders.