Funds to chase more African unicorns

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Global investors are replenishing their war chests to tap opportunities in underserved areas as they chase down new unicorns in Africa’s vibrant startup market.

In just under two months, three funds have launched fundraising drives, targeting growth and venture capital, with some recording a positive reception and one fund has already surpassed its initial target.

Endeavor Catalyst, a co-investment fund created by the international accelerator Endeavor, recently announced the close of its fourth fund, a $292-million venture capital fund. This is its largest fund in close to 25 years and more than its initial target of between $200-million and $250-million.

The early-stage investor said the investments will be used to support a self-sustaining business model and fuel Endeavor’s mission of supporting more entrepreneurs in emerging and underserved markets.

Among the notable African technology funding rounds the global VC firm has participated in is Flutterwave’s $35-million series B in 2020, before it became Africa’s fourth unicorn. 

Africa has five unicorns after Seychelles’ cryptocurrency exchange KuCoin shot to “decacorn” status, following a $150-million fundraising a month ago.

Endeavor Catalyst has also participated in Egypt’s largest non-bank lender MNT-Halan’s record-breaking $120-million seed round and Apollo Agriculture’s $40-million Series B funding round.

The fund said that 49 of its investors in Latin America, Europe, Southeast Asia, Africa and the Middle East have reached the billion-dollar mark in valuation, including several initial public offerings and acquisitions.

The global inclusive tech accelerator, Catalyst Fund, has received backing from British government-funded Financial Sector Deepening (FSD) Africa with a $3.5-million investment. FSD Africa will help Catalyst Fund to scale its work with a target of contacting 40 entrepreneurs for pre-seed funding.

The women-led fund plans to extend growth funds across diverse sectors with a focus on solutions for addressing climate change and lifting up vulnerable populations in emerging markets.

“We are particularly proud to share that at least 40% of the founders in our portfolio will be women and at least 80% local to their country of operation,” said Catalyst Fund managing director Maelis Carraro.

On its radar are fintech, insurtech, agtech, carbon finance and water management for resilience building and climate adaptation.

The new startups will join Ghana-based KudiGo, a mobile-powered integrated business software start up, Kenya’s micro-insurtech company, Turaco and customer verification firm Smile Identity.

The three startups are among 61 in Catalyst’s portfolio across emerging markets that have together raised more than $573-million in follow-on funding.

Tunisia’s Anava fund of funds, managed by Smart Capital, a company mandated with the development of the Tunisian entrepreneurial galaxy, has committed to sinking $5.2-million into Silicon Badia’s Impact Squared Fund (BIF2), a pioneer venture firm that supports growth-stage tech start-ups in the Middle East and North Africa region.

Information, Communication and Technology firms in Northern Africa, including Egypt, Tunisia and Morocco, are targeted with this new growth fund.

“We regard Anava’s investment in our second regional fund as a crucial strategic step in our efforts to grow our presence in North Africa, which is now solidified to include Tunisia. Our fund has already made its first investment in Tunisia’s thriving innovation environment, where we are enthusiastic and eager to create bridges and invest,” said Silicon Badia’s chief executive, Fawaz Zu’bi.BIF2’s initial investment in the Tunisian fintech startup, Expensya, came in November 2020, when it co-led the company’s $20-million Series B fundraising. — bird story agency