Google has changed concluded plans to invest up to $50 million in African prospective and growing existing startups through its Africa Investment Fund, boosting contributions to support more businesses on the continent.
In a virtual event over the week, CEO Sundar Pichai announced the tech giant’s intentions to commit $1 billion over the next five years in tech-led initiatives in Africa.
These drive ranges from improved connectivity through Google’s subsea cable Equiano to investments in small businesses and startups.
Google already has an existing and running program for Start-ups in Africa called Startups Accelerator Africa program and also recently launched Black Founders Fund.
Over the course of three years, the accelerator program has supported more than 80 startups in seed to Series A stages, providing equity-free mentorship and resources. Google for Startups Accelerator Africa has accepted startups like Twiga, Paystack and Piggyvest and collectively, these 80+ startups have raised over $100 million in venture capital.
The Black Founders Fund gives non-dilutive cash awards to black-led startups in three regions. In the U.S, the Black Founders Fund operates a $5 million fund; in Africa, a $3 million fund; and in Europe, a $2 million fund.
Presently, 50 startups have been selected to participate in the Africa program starting on October 13. Each will receive up to $100,000 in equity-free capital along with credits from Google Cloud, Google.org ads grants and additional support.
Of the 50 startups, Google says 40% are women-led, representing nine countries and 12 sectors.
“There is a significant gap in terms of access to funding. Some groups do not have access to funding as much as other groups. We’ve seen that with black and female-founded startups. And our effort with the Black Founders Fund is to help close that gap to some extent,” said Nitin Gajria, the managing director of Sub-Saharan Africa, Google, on a conference call highlighting why the internet juggernaut created the fund.
However, unlike both existing initiatives, the newly announced $50 million Africa Investment Fund will see Google take equity in high-growth African startups in exchange for varying check sizes.
“Think of it as Google bringing venture capital into the continent,” said Gajria.
Per the fund’s investment thesis, the managing director said the Africa Investment Fund doesn’t have any preference for specific sectors or countries. He adds that the fund might work in a similar fashion as the Google for Startups Accelerator program.“We are not restricting ourselves to certain verticals. We are focusing on investments where we believe that Google could add value,” Gajria said. “If there are founders building interesting products solving real challenges in Africa, that would fall squarely within our investment thesis.”
African countries can participate and benefit from the lastest funding are; Nigeria, Kenya, South Africa and Egypt. Others are Algeria, Bostwana, Cameroon, Côte d’voire, Ethiopia, Ghana, Morroco, Rwanda, Senegal, Tanzania, Tunisia, Uganda and Zimbabwe.
Google CEO reiterated the tech giant commitment to funding startups in Africa, “We are not restricting ourselves to certain verticals. We are focusing on investments where we believe that Google could add value,” Gajria said. “If there are founders building interesting products solving real challenges in Africa, that would fall squarely within our investment thesis.”
For startups who get investments from the Africa Investment fund, Google says they will have access to its employees, network and technologies. On when Google will make its first set of investments, Gajria said, “We are in advanced stages of various discussions, nothing that I can talk about more specifically at this point. But I’m hopeful we can come back with more information soon.”
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