The battle to save the soul of Digital Africa Venture Capital Fund, a venture capital fund sponsored by French President Emmanuel Macro in support of African startups made up of about 20 fund managers and which had also announced it had increased its fund size from $76 million to $152 million, rages on. Kizito Okechukwu, the association’s interim president, has declared his resignation just days after a group of the fund’s executive committee released an open letter re-affirming life to the troubled fund.
“But we had differences on the implementation of this strategy and after careful consideration, I think my resignation is the right thing to do,” Okechukwu said.
The Nigerian founder and executive director of the 22 On Sloane incubator based in South Africa, will step down on May 2, 2021. The reason given is linked to the French Development Agency (AFD).
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Okechukwu hopes that by stepping down, he would force AFD to make the systemic changes needed to achieve Digital Africa’s objectives. Nonetheless, the Nigerian claims that he and the Agency were in complete agreement about the plan.
Obviously, his situation was no better than that of his predecessor, Karim Sy who also criticized AFD’s working practices when he left.
Why Is The Crisis Significant For The African Startup Ecosystem?
The direction the crisis goes is important because some of the continent’s venture capital firms and accelerators catering to startups on the continent are plugged into the Digital Africa Venture Capital Fund.
Set up late 2019, the Digital Africa Venture Capital Fund aims to provide initial funding to Africa’s tech startups. Between 10 to 20 fund managers are members of the Digital Africa Investment Club.
The fund targets tech startups directly via 4 programs managed by Greentec Africa Foundation, African Business Angel Network, Investisseurs & Partenaires and MercyCorps Ventures.
The fund also targets incubators and accelerators via 2 programs managed by Bond’Innov and AfriLabs.
Before now, the fund is led by Nigerian Kizito Okechukwu who is its Vice-President, and outgoing interim president, after the resignation in July, 2020 of Franco-Senegalese-Malian, Karim Sy, who is the founder of Jokkolabs.
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To-date, Digital Africa is touted to represent a bright future to support Emmanuel Macron’s new-deal project for Africa’s digital economy. The French Development Agency (AFD), which is a member of it, even managed to mobilize some 130 million euros for equity investments in African startups.
Digital Africa fund crisis Digital Africa fund crisis
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer