Google has launched and is set to invest a 50 million-dollar equity-based funding into African startups, bolstering its efforts to help more of the continent’s enterprises.
Google made this announcement during its very first “Google for Africa” event that was held on Oct. 6. At the event, Google CEO Sundar Pichai announced that the company will invest $1 billion over the next five years in tech-led initiatives in Africa.
The investment will run over the next five years and will cover a range of initiatives, from improved connectivity to investments in startups.
Selected companies will be provided with access to Google’s employees, network and technologies, to help them build products.
Targeted at early- to growth-stage startups, the new investment fund is equity-based, marking a significant shift in Google’s approach to investing in African startups.
Over the last three years, the company’s existing initiative – Google for Startups Accelerator Africa – has provided more than 80 African startups with equity-free finance, cash awards as well as other benefits, including working space and access to expert advisors.
Through its Africa Investment Fund, Google is helping to lessen the gap in funding accessibility and will provide each of the selected startups with up to $100,000 in equity-free funding, access to its employees, network and technologies including Google Ad Grants and Cloud credits.
“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 Nithin Gajria, the managing director of Sub-Saharan Africa, Google.
Google is working with Nigeria’s technology innovation centre Co-creation Hub (CcHUB) which also has in Kenya and Rwanda, to distribute the funding to the selected companies across Africa.
The selected startups drawn from Nigeria, Kenya, South Africa, Ghana, Ethiopia, Cameroon, Rwanda, Zambia, and Cote d’Ivoire will take part in the Africa program, which will begin on October 13th.
Meanwhile, the Google Black Founders Fund will invest in black-led startups in Africa by providing cash awards and hands-on support.
“In the last year, we have seen more investment rounds into tech startups than ever before,” Nitin Gajria, Managing Director for Google in Sub-Saharan Africa, said in an official statement. “I am of the firm belief that no one is better placed to solve Africa’s biggest problems than Africa’s young developers and startup founders.”
The new fund is part of a larger $1 billion that the US tech giant plans to invest in Africa over a five-year period, which CEO Sundar Pichai said will “support the continent’s digital transformation”.
The investment focuses on enabling fast, affordable internet access for more Africans through advanced infrastructure; building helpful products; supporting entrepreneurship and small businesses; and helping nonprofits to improve lives across Africa.