Image Credits: Sony

Sony Group introduced right now that it has established Sony Innovation Fund: Africa (SIF: AF), a program that can assist the expansion of leisure companies in Africa. Appropriately, the Tokyo multinational conglomerate, by Sony Ventures Corporation (SVC), has earmarked $10 million for early-stage startups in gaming, music, movie and content material distribution.

Sony Ventures’s newest endeavor to assist know-how companies throughout markets and phases is that this fund centered on African leisure startups. Last yr, SVC accomplished the primary closing of Sony Innovation Fund 3 at $215 million to again all phases of rising know-how firms. The subsidiary manages all of Sony’s enterprise funding actions by SIF3, Sony Innovation Fund (SIF); Sony Innovation Growth Fund by IGV, a joint venture with Daiwa Capital Holdings; and Sony Innovation Fund: Environment.

The Japanese tech large’s enterprise arm has made greater than 100 investments in client and enterprise-facing companies throughout numerous sectors like leisure, robotics, AI, mobility, fintech, healthcare, logistics and SaaS from all these funds.

In Africa, fintech stays probably the most funded sector, attracting nearly half of the enterprise capital coming into the continent final yr. And although different sectors equivalent to logistics, healthcare and mobility are prime of thoughts for native and international traders eager on African tech, it’s leisure, which is usually missed, that Sony Ventures is selecting to begin with for its first foray into Africa.

Gen Tsuchikawa, CEO of Sony Ventures, instructed TechCrunch that though the Japanese behemoth established the Sony Innovation Fund in 2016 to spend money on ventures throughout numerous enterprise fields, it stays a inventive leisure and know-how firm whose mission is to fill the world with sentiment by the ability of creativity and know-how.

“The entertainment field has been a key area of focus for Sony Innovation Fund since the beginning and will continue to be. Africa, in particular, has a vibrant community of creators and entrepreneurs looking to invent new ways to enhance entertainment experiences for audiences and that propelled Sony to establish SIF: AF,” he added.

Sony’s Africa-focused fund will function a much-needed enhance to the continent’s leisure tech startups, which have struggled to obtain constant enterprise capital through the years. According to Partech Africa, in 2022, these startups obtained $42 million, representing 0.9% of Africa’s complete enterprise capital investments regardless of the large potential to be unlocked in gaming, music, film and content material distributions, important areas throughout the business that Sony is explicit about.

Take gaming, for example. Per data from video games market knowledge suppliers Newzoo and Carry1st, a South African writer of video games and digital content material, the gaming market in Sub-Saharan Africa is ready to surpass $1 billion by 2024.

Similarly, video-on-demand subscriptions in Africa are projected to hit 13.7 million in 2027, up from 4.89 million on the finish of 2021, with revenues tripling from $623 million in 2021 to $2 billion in 2027. Netflix, which this April mentioned it had invested €160 million in movie content material manufacturing in Africa since 2016, and Amazon Prime face competitors from different streaming platforms customizing for African audiences equivalent to Showmax, Canal+, Disney+ and ROK within the race to seize market share within the video streaming market. On the opposite hand, the music business is bolstered by the widespread streaming of indigenous genres equivalent to Afrobeats and has expanded to the purpose the place it’s attracting international report labels to signal its native artists.

“We are exploring investments in these areas because we see great potential and exciting creativity from the creators, entrepreneurs and teams in Africa, and we want to support that. There is also growing adoption of technology overall in these areas, which we are excited about,” Tsuchikawa commented.

“Since Sony’s entertainment business group is exploring and supporting young talented creators in Africa, this fund will also try to support those creators and the growth of entertainment business in Africa in various ways such as providing technologies, collaborating with creators, intellectual property, and contents, marketing support, and others which Sony can contribute.”

Tsuchikawa acknowledged that along with the fund’s seed and early-stage funding technique, it can supply follow-on investments to its portfolio firms. There’s no set time-frame to deploy the $10 million or a set variety of startups the fund plans to spend money on; nonetheless, SIF: AF expects its ticket sizes to vary from $250,000 to $1 million. “We have initiated due diligence on a few startups, but I can’t share any details at this time,” answered Tsuchikawa when requested if SIF: AF has made some investments but and if startups like a16z-backed Carry1st and Tencent-backed Kukua are on its radar. “We plan to start our work with South Africa, Kenya, Nigeria and Ghana, but there is a possibility of expanding the scope of the project in the future.”

Sony Ventures has an workplace in all markets the place it has invested by its funds: Japan, India, Israel, Europe and the U.S. In Africa’s case, it’ll take a much less direct strategy. According to Tsuchikawa, the fund will initially be supported by the Sony Ventures staff in Europe; nonetheless, the corporate is at the moment working to rent a full-time member on the continent who can tackle the enterprise capital sourcing operate.

As with most company enterprise capital constructions, Sony Innovation Fund, through the years, has supported the expansion of its portfolio firms by offering alternatives for collaboration, starting from the supply of Sony-owned applied sciences to joint growth and enterprise alliances. Approximately 40% of Sony Innovation Funds portfolio firms have strategically partnered with Sony. Similarly, Tsuchikawa mentioned the fund will promote the opportunity of its African portfolio firms collaborating with the leisure enterprise group of the Sony Group relying on the stage and timing of the enterprise, connecting them with its in depth community of sources, technical experience and business insights.

Meanwhile, Sony has concluded a collaboration settlement with the International Finance Corporation (IFC), the biggest international growth establishment centered on the non-public sector actively investing in rising markets, together with Africa. In addition to monetary funding, this collaboration will assist the expansion of the African leisure business by leveraging each events’ strengths, in keeping with Toshimoto Mitomo, the chief vice chairman of Sony Group Corporation.

“Sony Group has been fostering next-generation technologies and startups and promoting open innovation through its corporate venture capital activities. Through the activities of Sony Innovation Fund: Africa, we hope to accelerate the growth of the African entertainment industry and contribute to the progress and development of the region by providing opportunities for collaboration with the entertainment businesses within the Group,” Mitomo added.