The Algerian Startup Fund is set to undergo a capital increase in the upcoming days to meet the growing demand for financing, according to Yacine El-Mahdi Oualid, the Minister of Knowledge Economy, Start-ups, and Micro-enterprises. The announcement was made in Algiers on Saturday during a speech at the seminar on “Financing and Banking Support for Investment Projects” organized by the Algerian Agency for Investment Promotion (AAPI) in collaboration with the Professional Association of Banks and Financial Institutions (ABEF), as reported by the APS news agency.
During his speech, the minister highlighted the need to enhance the capital of the Algerian Startup Fund to better address the financing requirements of start-ups. He emphasized that since its establishment, the Fund has been highly active, recognizing that the diversification of the national economy necessitates a range of financing options tailored to innovative activities and investments.
The Algerian Start-up Fund was established in October 2020 through a partnership between the Ministry of Knowledge Economy, Start-ups, and Micro-enterprises and six public banks. It began with a capital of 1.2 billion Algerian dinars (DA). The Fund provides different financing opportunities based on the nature of the start-up. These options include funding of up to 5 million DA (maximum limit) for early-stage start-ups, funding of up to 20 million DA for operational companies, and additional funding of up to 150 million DA (maximum limit) for large enterprises.
Importantly, the financing provided by the Fund follows a purely economic approach that does not involve charging interest to start-ups. Instead, start-ups are considered partners in venture capital.
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In his address, the minister also shed light on the state of micro-enterprises in Algeria, revealing that they constitute only 7% of the total number of companies in the country, with an average of 25 companies created per 1000 Algerians. In comparison, the global average stands at 45 companies per 1000 individuals. Recognizing the need to foster entrepreneurship, particularly within universities, and facilitate the establishment of companies, the minister stressed the importance of catching up by encouraging entrepreneurship and announced the launch of entrepreneurship centers at universities in the near future. These centers aim to train future project owners and reduce the failure rate of newly established enterprises.
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