With a $50 million fund set up, Google plans to invest in African start-ups

Through its Africa Investment Fund, Google intends to spend up to $50 million in African early and growth-stage enterprises, increasing its efforts to assist more startups on the continent.

As CEO Sundar Pichai revealed during Google’s virtual event, the tech giant aims to invest $1 billion over the next five years towards African initiatives powered by technology.  Some of these initiatives include Google’s Equiano undersea cable, which will increase connectivity, as well as investments in startups and small enterprises. 

For a long time, Google maintained its commitments in the African startup ecosystem through the Google for Startups Accelerator Africa programme and the newly established Black Founders Fund.  The accelerator programme has provided equity-free mentorship and resources to more than 80 entrepreneurs from seed through Series A over the last three years. Startups including Twiga, Paystack, and Piggyvest have been selected into the Google for Startups Accelerator Africa and have collectively raised over $100 million in venture financing.

Instead of giving non-dilutive financial awards to minority-led firms, the Black Founders Fund does so in three different parts of the country. There are three Black Founders Funds in the United States: one with $5 million, one with $3 million, and one with $2 million in Europe.

The Africa programme will begin on October 13 with the participation of 50 startups. In addition to Google Cloud credits, Google.org ad grants and other support, they will receive up to $100,000 equity-free financing.  Among the 50 ventures, Google estimates that 40 per cent are run by women, with companies hailing from nine different countries and 12 different industry sectors.

“There’s a big financing deficit right now,” the company reckons. The financing available to some organisations is significantly less than the funding available to other organisations. Black and female-founded firms have shown this. We’ve seen it time and time again. ” For this reason, we’re supporting the Black Founders Fund,” said Nithin Gajria, director of Sub-Saharan Africa at Google, in an interview about why the internet giant set up the fund.

The new upcoming $50 million Africa Investment Fund, on the other hand, will see Google invest in high-growth African startups in exchange for varied check sizes, unlike either of the previous projects.  Gajria compared it to Google delivering venture finance to Africa.

The managing director of the Africa Investing Fund stated that the fund has no preference for certain sectors or countries in accordance with the investment thesis. He goes on to say that the fund may operate in a manner similar to Google’s Accelerator programme for startups.

In spite of the continent’s Top 4 in terms of startup and venture capital activity (Nigeria, Kenya, South Africa and Egypt), the accelerator has made it a point to welcome proposals from startups in underfunded and underappreciated locations.

Algeria, Botswana, Cameroon, Ivory Coast, Ethiopia, Ghana, Morocco, Rwanda, Senegal, Tanzania, Tunisia, Uganda, and Zimbabwe are among of the nations included in this grouping of nations.

In other words, “We’re not sticking to just one industry.” Gajria made clear, 

Gajria made clear,  This would be a perfect fit for our investment thesis if there were African founders producing innovative products to address real-world problems.

Google promises startup investors in the Africa Investment Fund access to its personnel, network, and technologies. To the question of when Google will make its first investments, Gajria replied, “We are in advanced phases of various discussions; nothing that I can talk about more explicitly at this point. However, I’m optimistic that we’ll have more news to share in the near future.”