The Fund for Export Development in Africa of the multinational trade financing agency Afreximbank has announced its first $670 million closing (FEDA). Four sub-funds will be fed by the new financing.
Consequently, $270 million will go to the FEDA Direct Equity Fund 1, which will invest equity in businesses engaged in the industries for which it has been designated. The Strategic Initiatives Fund, a programme of the Afreximbank to execute innovative and high-impact investments in industries crucial to expanding intra-African trade and creating value-added exports on the continent, is allocated $250 million. The Africa Credit Opportunities Fund, LP (“ACOF”), sponsored with $125 million by FEDA and Gateway Partners Group, is the third beneficiary fund. It seeks to provide suitable consumers with loans through private placement.
The fourth fund, which will have a $25 million endowment, will focus on startup ventures that require focused funding, such as those developed by startups. By 2024, the FEDA hopes to raise up to $1.3 billion. Afreximbank is situated in a sector of the economy where there is a high demand for financial resources but a significantly smaller supply.
Read also Afreximbank Launches Trade Payment Services (AfPAY)
This mismatch has presented a business opportunity for specialised investors like Launch Africa in the venture capital and startup funding sector. According to statistics, this Mauritius-based company has taken part in more than 115 start-up financing transactions this year (until the end of September), totaling close to $106 million in funding. The deployment of Afreximbank funds will follow.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh