Google will invest up to $50 Million in African startups at the early and growth stages via its Africa Investment Fund. This is a major boost to efforts to support other businesses on Africa.
Google announced its plans today at a virtual event. CEO Sundar Pichai revealed that the tech giant will invest $1 billion in Africa-led tech initiatives over the next five year.
These initiatives include investments in startups and small businesses, as well as improved connectivity via Google's subsea cable Equiano.
Google has fulfilled its obligations to the latter via its Google for Startups Accelerator Africa program, and the newly launched Black Founders Fund.
The accelerator program has supported over 80 startups from seed to Series A stages in three years. It provides equity-free mentorship as well as resources. Google for Startups Accelerator Africa accepted startups such as Twiga and Paystack. Together, these 80+ startups have raised more than $100 million in venture capital.
The Black Founders Fund, on the other hand, gives cash awards that are non-dilutive to black-led businesses in three countries. The Black Founders Fund in the United States has a $5 Million fund, while in Africa it has a $3 Million fund and in Europe it has a $2,000,000 fund.
50 startups have been chosen to take part in the Africa program, which will begin on October 13. Each startup will receive equity-free capital up to $100,000, credit from Google Cloud, Google.org Ad Grants and other support.
Google claims that 40% of the 50 startups are women-led and represent nine countries as well as 12 industries.
Access to funding is not easy for many groups. Access to funding is not always available for all groups. This has been the case with female-founded startups and black-founded startups. Our goal with the Black Founders Fund was to close that gap, stated Nitin Gajria (managing director, Sub-Saharan Africa at Google), during a conference call to highlight why the internet juggernaut established the fund.
The $50 million Africa Investment Fund, which Google announced recently, will allow Google to take equity in African high-growth startups in return for varying check sizes.
Gajria said that it is like Google bringing in venture capital to the continent.
According to the fund's investment thesis, the managing Director stated that the Africa Investment Fund does not have any preference for particular countries or sectors. The fund could work in the same way as the Google for Startups Accelerator program, he says.
The accelerator accepts applications from startups located in under-funded or overlooked regions of Africa, despite the fact that Africa is home to the Big Four (Nigeria Kenya South Africa, South Africa, South Africa, and South Africa).
These include Algeria, Botswana and Cameroon.
We don't limit ourselves to certain verticals. Gajria stated that we are looking for investments in areas where Google can add value. Our investment thesis would include founders who create interesting products that solve real problems in Africa.
Google promises that startups who receive investments from Africa Investment Fund will have access its network, employees and technologies. Gajria was asked when Google would make its first investment. We are hopeful that we will soon have more information.
We will keep you posted.
