Softbank capital for start-ups run by minorities

CALIFORNIA • SoftBank Group will make investments in 14 start-ups run by under-represented founders, its Vision Fund chief Rajeev Misra said.

The investments are part of the Japanese tech conglomerate's Emerge accelerator programme, which offers mentoring to entrepreneurs from under-represented 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. He was speaking at Emerge's online event on Thursday, where founders pitched investors, showcasing the first group of companies completing the programme.

SoftBank's Emerge accelerator programme was developed before the current focus on race in Silicon Valley, driven by the protests around the police killing of unarmed African-American man George Floyd last month. Since then, many technology companies have spoken out in support of black people in the industry and have cumulatively pledged more than US$300 million (S$418 million) in contributions or investments towards minority groups.

SoftBank will put at least US$150,000 into each of the start-ups, according to a person familiar with the company who asked not to be identified, but the final investment amounts will depend on the stage of each company. Many of the start-ups - in industries from healthcare to driving technology - have already raised early rounds.

Separately, capital could be available from Softbank's US$100 million Opportunity Growth Fund, which will back founders of colour. 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've had amazing experiences with," he added. "Of course, there are some exceptions."

Mr Adam Neumann, the co-founder of WeWork, created an embarrassing set of challenges for SoftBank, after the co-working start-up's attempt at an initial public offering last year dramatically collapsed.

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

In recent years, venture firms have sprung up to back under-represented 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, afterwards said she was contacting some of the start-ups to discuss potential investments.

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