February is Funding & Enterprise Supplier Development Month on SME South Africa. Follow along here for all our coverage.
The most active investors in African startups were recently revealed in Disrupt Africa’s 2017 African Tech Startups Funding Report.
The list is dominated by US-based venture capital (VC) funds with the exception of Algebra Ventures, an Egyptian venture fund; Kalon Ventures, a South Africa-based section 12J venture capital fund and Nigeria’s Ventures Platform.
These investors prove that there is an appetite for African startups, the same report shows that 2017 was the most successful year of fundraising by African startups.
Below are the startups they have invested in and what they are looking for.
1. GREYCROFT PARTNERS
This US-based venture capital company recently invested in a Kenyan bitcoin payment solution, BitPesa and Nigerian payment solution, Flutterwave.
They have two funds available: Greycroft IV, a $204 million venture fund and Greycroft Growth II, a $365 million growth-stage fund.
Greycroft Growth II starts at $10 million and will invest up to $35 million in a company.
What they are looking for
The company mainly invests in digital media and tech startups. They target early-stage companies with young founders, typically in “seed” or “Series A” rounds according to Fortune. They also have a keen interest in startups that are headed by female founders and entrepreneurs, according to the same report.
2. 500 STARTUPS
500 Startups is a US-based Silicon Valley early-stage venture fund and seed accelerator. They have previously invested in Egyptian-based companies: food startup Mumm and event management company, Eventtus, according to Disrupt Africa.
What they are looking for
This fund typically invests in a diverse range of companies in tech, from marketplaces and SaaS to media and AI.
According to their website, they welcome a variety of startups for their seed programmes, however, startups are required to pay a fee of $37,500 in order to take part. These fees can, however, be deducted from their investment amount.
The accelerator, according to their website, invests $150,000 in exchange for 6% equity in all startups that take part in their seed programme.
3. ACCION
Accion is a US-based non-profit organisation that focuses on providing services to underserved consumers and businesses.
In 2017, they partnered with Quona, a fund that invests in fintech startups with a social purpose. Some of the startups they have invested in include Nigeria’s fintech solution Lidya and South Africa’s insurance company AllLife.
What they are looking for
Accion sponsors and is the anchor investor in the Accion Frontier Inclusion Fund, the first global fintech fund for the underserved.
Managed by Quona Capital, the fund invests in companies that innovate to expand access to financial services to underserved consumers and businesses in emerging markets.
4. ALGEBRA VENTURES
Algebra Ventures is considered Egypt’s “largest ever tech-focused VC fund”. They focus mainly on tech startups. The fund has backed startups like online grocery startup GoodsMart, event management company, Eventtus and home services marketplace, FilKhedma.
In a Venture Burn article, Algebra confirmed that investments would mostly be in the range of $500 000 to $4 million.
What they are looking for
The firm specialises in Egypt-based startups, early venture, mid venture and growth capital investments in the tech sector, according to Bloomberg. Their venture capital fund also looks closely at tech startups that focus on technology IP, fintech, ecommerce and consumer internet.
5. Y COMBINATOR
Y Combinator is a US-based seed accelerator which has been taking on increasing number of African tech startups into its programmes and providing further investment down the line.
Last year, they have invested in Morocco-based ecommerce firm WaystoCap, Nigeria-based B2B marketplace Releaf and Nigerian fintech startup Aella Credit.
Twice a year Y Combinator invests a small amount of money ($120k) in a large number of startups in exchange for 7% of the company’s equity, they say on their website.
What they are looking for
Startups don’t need to be based in Silicon Valley, but upon receiving funding, startups are required to move to Silicon Valley for three months, during which they will work intensively with the accelerator to get the company into the best possible shape and refine their pitch to investors.
According to the website, the company invests in a range of industries, however they state that the majority of the startups they fund are internet and mobile companies. On their website, they mention that they like to fund startups that have been in existence for a while, but will help any startup that hasn’t already raised a series A round from VCs.
6. KALON VENTURE PARTNERS
Kalon Venture Partners (previously Grotech) is a South Africa-based section 12J venture capital fund and is one of a few 12J funds that invests in tech startups.
Their focus is on disruptive tech startups. Last year they invested in shopping app, Snapnsave, solar power financial system, Sun Exchange, and online payment processor i-Pay.
The company invests as little as R110 000 and as much as R20 million into startups.
What they are looking for
The company invests in disruptive technology startups that aim to solve problems in Africa, with the potential for global application. According to their website, they invest in post-revenue startups. They also look closely at the startup’s ability to identify a clear exit strategy.
7. VENTURES PLATFORM
Ventures Platform is a VC and tech hub focussing on early and growth-stage tech companies.
Having only launched in 2016, Ventures Platform has already established itself as a major player in Nigeria.
The company has backed Nigeria-based tech startups, including design and print business Printivo, financial service provider, Kudi, and accounting software, Accounteer.
What they are looking for
According to their website, Venture Platform looks for growth-stage startups that are solving real problems, have a solid team and display the potential to scale. For the accelerator programme, the company requires startups to be primarily based on a site in Lagos, Nigeria.
The company invests up to $40,000 in cash and $10,000 in services. According to the website, in addition to funding, they also provide services such as AWS credit, thousands of dollars in Facebook credit, legal service, finance, and accounting support, hands-on business support, training, a strong global mentor and expert network, workspace and several other add-on services and discounts on other services.
