Last week, Google held its Google for Africa event led by CEO Sundar Pichai, which focused on expanding technology and entrepreneurship support on the continent. The company began expanding operations to Africa fourteen years ago, and in this announcement have committed an additional $1B to develop digital connectivity and investments in startups over the next five years. The announcement included three key areas the company will continue to focus on: connectivity, startup investment, and non-profit support.
First is Google’s initiative on digital infrastructure through a subsea cable, which isn’t necessarily a new development (as I wrote about here) but is still a focus of the $1B commitment. First announced in 2019, Equiano (as the cable is named) will connect the continent to Europe and provide 20x more network capacity than current cables serving the continent. Google estimates that the project will decrease connectivity costs in Africa by 21%, increase speeds across the continent, and create 1.7M new jobs over the next five years as the digital economy grows in the region.
In addition to building the foundation for internet connectivity, Google announced a partnership with Safaricom to launch a “device financing plan” for first-time smartphone users in Kenya, giving more people access to devices to connect to the internet. The plan is one of the first in the country, where few financing options are available and will expand across the continent through partnerships with other mobile carriers such as Airtel, Orange, and Vodacom.
From a venture capital and startup perspective, infrastructure is the foundation needed to drive innovation in an ecosystem. Bringing more affordable access to the internet allows for more users, a larger marketplace, and more business opportunities. On the flipside, connectivity also gives more access to education and digital skills training, breeding more entrepreneurs to tackle those opportunities.
Google also announced initiatives to invest in startups in Africa directly through equity investments and grants. The company announced a $50M Africa Investment Fund focused on providing traditional venture capital investments to early- and growth-stage startups, expanding on its active accelerator program in the region. The fund will be vertical-agnostic and vary in check size and equity for each investment.
The company also highlighted its $3M Black Founders Fund (also active in the U.S. and Europe) specifically for Africa. The fund, announced in June this year, provides equity-free investment to black entrepreneurs. Google announced that 50 entrepreneurs would be receiving funding from this particular vehicle, along with credits for various services such as Google Ads and Google Cloud. The startups also get access to Google’s network for mentors and experts. The company will partner with Africa-focused Co-Creation Hub to distribute funding to the various companies.
Beyond equity and grants, Google announced a collaboration with non-profit Kiva to support small businesses with $10M in interest-free loans focusing specifically on hardships created by Covid-19. The partnership will provide loans to entrepreneurs in Ghana, Kenya, Nigeria, and South Africa. As if that wasn’t enough, Google also announced support for non-profits in the country. Google.org will expand commitments with $40M to organizations improving lives across the continent.
So that was a lot of stuff! Africa currently has 300M people online today, and estimates are that number will double over the next five years. The exploding market receives much attention from other international investors and companies, from institutions like SoftBank and Tiger Global to strategic tech investors like Alibaba and Stripe. Google wants in on the action.