Google is the last major African investor with a $ 50 million fund – Quartz Africa

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At a virtual event on Wednesday, October 6, Google CEO Sudar Pichai said his company would invest $ 1 billion in Africa over five years to build an undersea Internet cable, support nonprofits and finance businesses.

The cable, named Equiano after the Nigerian-born 18th-century abolitionist, has been in the works since 2019, when it was first announced. It will connect Africa to Europe and augment Google’s global internet infrastructure, which includes Dunant, which stretches from Virginia Beach in the United States to the French Atlantic coast, and Curie, which connects Chile to Los Angeles. .

Google is “making tremendous progress” in building Equiano branches that will land in Nigeria, Namibia, St. Helena and South Africa, according to Nitin Gajria, the company’s chief executive for Africa. When completed, the cable “will provide around 20 times more network capacity than the last cable built to serve Africa” ​​and reduce Internet prices by 21%, Gajria said.

Equiano is one of two undersea internet cable projects from big tech companies in Africa, in addition to Facebook’s 2Africa which was extended this month to cover 26 countries. But Google is embarking on a space where Facebook has not yet entered: directly financing African startups with venture capital.

Google is the last big name of VC in Africa

One of the highlights of the event was the announcement by Onajite Emerhor, who runs Google’s startup accelerator in Africa, that 50 entrepreneurs will receive a share of a $ 3 million fund for black founders. in Africa. The initiative resonates because even if Africa is a predominantly black continent, white privilege has sometimes ousted black founders.

Some of the 50 have already raised six-figure funds from investors, but Google’s no-capital money comes with perks like credits for cloud storage that, for start-ups, free up money for. money for other needs. The package is similar to what the company’s startup accelerator program has offered to more than 80 start-ups since 2017 in Africa.

However, for growing African businesses, Google now has a $ 50 million venture capital fund. In a call with reporters, Gajria said check sizes and equity holdings will differ depending on each startup Google invests in, and that there are no restrictions on the industry. The fund will seek out startups “solving real challenges in Africa,” he said.

It’s a subjective definition that will become clear when Google begins to be mentioned in funding announcements for African startups. But as much as it is a giant of Silicon Valley, Google will probably not be an innovator in terms of technology financing in Africa since it is joining a marketplace that already has large global investors, institutional players. like SoftBank and Tiger Global to strategic technology. investors like Mastercard, Visa, Alibaba and Stripe.

The companies backed by Peter Thiel, Jeff Bezos, and Mark Zuckerberg have long been active on the continent, contributing to a steady growth in startup funding over the past decade and the creation of unicorns.

Can Google look beyond the Big Four Africans?

That said, Africa does not yet have enough funding for Google to become an excess investor.

Indeed, as most of the funding has remained in Nigeria, Kenya, South Africa and Egypt, there is a demand for new sources of money that can fund minorities such as women-led startups in these countries. , as well as entrepreneurs in less funded regions such as French-speaking Africa. .

Google’s five physical offices in Africa are located in Johannesburg, Nairobi, Lagos, Cairo and Accra, but Gajria said that would not limit their ability to seek opportunities across the continent. That remains to be seen because for now at least, these countries have first banked on Google’s other business plan for Africa – a $ 10 million fund that will provide low-interest loans. interest in small businesses in Ghana, Kenya, Nigeria and South Africa. It will be managed by Kiva, a California-based not-for-profit microfinance company.

From a technology standpoint, the other notable announcement of the day was that Google is now running a funding partnership with Safaricom for Kenyans to buy Android smartphones, and plans to do the same with other operators like Airtel, MTN, Orange and Vodacom in other countries.

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