Capital and Code: How Novastar and Google Are Scaling African AI and Climate Startups

Novastar Ventures Secures 147 Million Dollars for Pan-African Expansion

Nairobi-based venture capital firm Novastar Ventures has successfully closed its third investment vehicle, the Africa People and Planet Fund III, securing 147 million dollars. Although the final close fell slightly below the initial 200 million dollar target, the capital represents a 40 percent increase from its second fund, which closed at 108 million dollars in May 2020. Moving beyond its previous geographic focus on East and West Africa, Novastar is expanding its mandate to back businesses across the entire continent, including Northern and Southern Africa.

The fund is designed to support startups addressing economic, environmental, and climate resilience challenges. Backed by development finance institutions and global corporations, the fund's key investors include British International Investment, Norfund, Swedfund, Proparco, COFIDES, and the Green Climate Fund. A notable surge in Japanese participation is marked by backing from SBI Holdings, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation, Mitsui O.S.K. Lines, and the Japan International Cooperation Agency. Novastar has already deployed capital from this fund into companies such as Egyptian delivery startup Breadfast, Nigerian food delivery service Chowdeck, electric mobility platforms Greenwheels and ARC Ride, affordable smartphone provider MoPhones, and sustainable farming company Sistema.bio. Andrew Carruthers, co-founder and managing partner at Novastar Ventures, noted that the fund represents a natural progression of the firm's strategy to back transformative businesses generating financial, social, and environmental value.

Google Accelerates AI Innovation Through Class 10 Cohort

Parallel to these funding developments, Google has advanced its support for growth-stage technology startups through the tenth cohort of the Google for Startups Accelerator Africa. For this installment, Google selected 15 AI-driven startups from a pool of nearly 2,600 applicants. The three-month hybrid program provided founders with direct pairing with industry experts, technical deep dives, and product design workshops to scale their businesses.

According to Folarin Aiyegbusi, Google's Head of Startup Ecosystem in Africa, the program aims to shift the regional narrative from technological hype to commercial reality. The graduating startups in Class 10 focus heavily on leveraging artificial intelligence to address immediate challenges in fintech, agritech, and health tech, building sustainable and high-yielding business models suited for the African market.

A Collaborative Applied AI Lab to Support Local Founders

Solidifying their shared focus on local innovation, Novastar Ventures and Google teamed up to launch an Applied AI Lab. Applications for the initiative officially opened on July 1, 2026. The lab is designed to assist African startups and researchers developing AI-native solutions in critical sectors, specifically healthcare, agriculture, and education.

Supported by Google DeepMind and backed by Google's AI Futures Fund, the lab provides local founders with access to specialized tools and technical support that are typically dominated by global technology giants. By offering these resources, the partnership aims to lower the barrier to entry for African innovators building native AI applications. Whether this influx of late-stage capital and specialized technical infrastructure can successfully insulate African AI startups from the broader global venture funding slowdown remains the critical test for the region's tech ecosystem.