Google announced today that SafeBoda, a Ugandan super app, has received the first investment from its Africa Investment Fund.
The unannounced investment comes only two months after Alphabet CEO Sundar Pichai revealed the company’s plans to invest $1 billion in “tech-led projects” over the next five years, including a $50 million Africa Investment Fund aimed at early- and growth-stage African firms. In October, he announced this during the Google for Africa event.
Prior to the fund’s inception, Google provided assistance to businesses through its Google for Startups Accelerator Africa program.
With equity-free mentorship and tools, the accelerator program has helped more than 80 firms from seed through Series A.
They’ve raised over $100 million in venture financing between them.
Google has just announced the Black Founders Fund, a $3 million non-dilutive fund that will invest in 50 firms each year.
Fintech companies from Nigeria, Kenya, Egypt, and South Africa are particularly appealing to venture capitalists. Fintech businesses received 25% of all venture capital funding in Africa last year, while the Big Four startups received more than half of all funding on the continent.
VC firms and institutional fund managers who spoke recently said they aim to close the funding gap by investing in underserved African regions and sectors. One of them is Nitin Gajria, Google’s managing director for Sub-Saharan Africa, who echoed similar comments when the company introduced the Africa Investment Fund in October.
“We don’t limit ourselves to specific verticals.”
In October, the managing director stated, “We are focusing on investments where we feel Google can offer value.” “If there are founders in Africa producing intriguing technologies that solve real problems, that would fit right into our investment thesis.”
Though Google’s investment in SafeBoda serves as an early reminder of Gajria’s assertion, the fund’s portfolio will most likely be filled with entrepreneurs from the Big Four markets in the coming years.
Before launching a mega app strategy two years ago, the Ugandan business began as a two-wheel ride-hailing platform.
It now serves over 1 million users in Uganda and Nigeria with rides, parcel delivery, food and retail, payments, savings, and other financial services.
In combined markets, the company has over 25,000 drivers who have processed over 40 million orders.
The money from Google’s Africa Investment Fund will help SafeBoda “push its expansion in Uganda and Nigeria, scaling its transportation-led app to offer new payment and financial services solutions for its expanding range of customers: passengers, drivers, and merchants,” according to the company.
In a statement, co-founder Ricky Rapa Thomson said, “SafeBoda welcomes Google to their community and are pleased to continue to promote innovation in informal transportation and payments in the boda boda (East Africa) or okada (West Africa) market.”
“This crucial business is the heartbeat of Africa’s cities and drives economic growth.” SafeBoda is ecstatic that big global corporations like Google see the importance of supporting businesses working toward these objectives.”
The investment in SafeBoda was undertaken to “strengthen a relationship with a prospective future partner that has a strategically aligned vision of better logistics and transportation,” a spokeswoman said.