Sony wants to invest $10 million in Africa's entertainment sector

Sony Group Corporation ("Sony") has launched “Sony Innovation Fund: Africa”, a $10 million fund to invest in seed to early-stage startups in Africa's entertainment industry, including startups in the gaming, music, movie and content distribution sectors. 

Additionally, Sony has also announced a collaboration with the International Finance Corporation (IFC), the largest global development institution focused on the private sector which is actively investing in emerging countries, including startup companies in Africa. In addition to financial investment, this collaboration will support the growth of the entertainment industry in Africa by leveraging the strengths of both parties.

“And I am confident that our collaboration with IFC, which has a strong presence in emerging markets, will enhance this activity by leveraging both parties' strengths," says Toshimoto Mitomo, Executive Deputy President and CSO, Sony Group Corporation. “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.”

Since its inception, the Sony Innovation Fund has supported the growth of its portfolio companies by providing opportunities for collaboration, ranging from the provision of Sony-owned technologies to joint development and business alliances. With the “Sony Innovation Fund: Africa,” Sony will continue to make value-added investments and potential expansion of this activity will be considered based on its progress.

According to Makhtar Diop, Managing Director of IFC, “This partnership will harness IFC's expertise in emerging markets and our extensive investments in the digital landscape. Sony's exceptional track record as a leading global player in entertainment, media, and technology positions us well to contribute to the economic growth of the creative sector.”

With most of the venture capital going to fintech startups, the entertainment sector has struggled to raise funding; only a few startups like South Africa's Carry1st, which raised $27 million pre-Series B earlier this year from Bitkraft Ventures, a16z and Konvoy Ventures to drive mobile gaming adoption on the continent, have been able to access funding for their startups.

By 2024, African gaming is projected to be worth about $1 billion, according to data from research firm Newzoo. In 2022, games sold in the region generated $862.8 million in revenue, up 8.7% YoY.

“The African games market is a story of potential. For the last three years, growth in the market has outpaced the global average, and it is set to keep doing so for the coming years. Saying that it’s also a challenging region to find success in. Sub-Saharan Africa houses 7% of the global player audience, but its players spend less than half a per cent of global gaming revenues,” says Tom Wijman, Lead Games Analyst at Newzoo.

This fund will serve as a boost to entrepreneurs in the sector. Gen Tsuchikawa, CEO of Sony Ventures, told TechCrunch that: “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.”