South African startups now have access to more VC  funds as the country’s SME Fund and the government’s Technology Innovation Agency (TIA) has announced a public-private partnership to co-invest R350 million across three venture capital funds.

Here Is All You Need To Know

• A Memorandum of Understanding (MOU) was signed between TIA and SME Fund at the Innovation Summit in Cape Town on Friday 13 September, 2019.
• The partnership sees over R350 (over $23 million) invested in three venture capital funds.
• These fund managers will invest in a portfolio of early stage businesses and provide capital, as well as other support, to the entrepreneurs, to help them commercialise technologies and grow their businesses. 
• The South Africa’s SME Fund’s mandate to the three fund managers includes a requirement that they invest at least 50 percent of the fund into businesses owned by black entrepreneurs.
• The SA SME Fund and TIA also signed the legal agreements for the OneBio Seed Investment Fund, officially launching the only biotech dedicated investment fund in South Africa.

Which Fund Managers Get The Funds

The fund will go to:

1. OneBio Seed Investment Fund, a biotechnology dedicated fund. R83.5 million has already been given to the OneBio Seed Investment Fund. 
2. Savant Venture Fund, a hardware technology incubator and Fund Manager (in which two deals have already been pre-funded by TIA’s Seed Fund. Savant Venture Fund has received R111.5 million so far. Savant Venture Fund recently ZAR9.5 million (US$635,000) in E-health startup, SmartBlade’s. 
3. The fund will also be made to South Africa’s newly established University Technology Fund (UTF). An anticipated commitment of R152.5m million will be made into the University Technology Fund (UTF) (for which the SA SME Fund anticipates receiving formal approval by the end of September).

Why Investment Was Made Into The Funds And What Startups Will Expect

According to Ketso Gordhan, Chief Executive of the SA SME Fund: 

“We are hugely excited and energised by this partnership to support and invest in innovation, especially in black-owned start-ups and scale-ups in this space. This forms part of our commitment to support government, together with TIA, in stimulating and intensifying technological innovation to improve economic growth, create jobs and impact on the quality of life of all South Africans”.

Fuzlin Levy-Hassen, Interim Chief Executive of the TIA, said:

“This new investment partnership is the result of the synergies and commitment that exist between Government and the private sector. We are aligned in our vision of turning bright young minds into viable and sustainable business founders whose successes will create jobs and drive economic growth. The sophistication and creativity already evident in these businesses should make us proud as a country, and encourage us to further support innovation”.

Read also: New Funding Round Opens For Small Businesses In South Africa

What Startups The New VC Funds May Be Targeting 

The SA SME has invested in these three VC funds because they are trying to support innovation and the creation of entrepreneurs in South Africa. They also seem to be supporting underdeveloped sectors. For instance:

1. OneBio is a fund that focuses on biotechnology, which historically has been the purview of Big Pharma, but technology and declining costs in the research and development mean that our engineers can develop great solutions using local resources for global needs.
2. Savant a first time Fund Manager focused on hardware technology Fund. This Fund is plugging the shortage of investment into hardware technology within the South African VC environment. The team has over a decade of experience in commercialising hardware tech.
3. The UTF is a University Technology Fund that aims to leverage and commercialise the IP originating from SA universities, where the focus has typically been at very early stage research with no follow-on capital.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

 The International Finance Corporation, IFC, a member of the World Bank Group, recently announced a 200 million Zambian kwacha (approximately $15 million) loan to Stanbic Bank Zambia, a wholly owned subsidiary of Standard Bank Group, to help Stanbic Bank expand its lending to small and medium enterprises, with at least 25% of the loan earmarked for women-owned businesses in Zambia.

Zambia’s entrepreneurs have difficulty in accessing the finance they need to grow due to informality in the market, high collateral requirements, and poor bank lending tools, according to a recent study by the World Bank Group.

Here Is The Deal

The loan will particularly be targeted at Zambia’s women-owned enterprises who face a financing gap of about $474 million, equivalent to 16% of the total SME finance gap funding shortfall (The Global Findex Database 2017).

The funding from IFC is timely and fits with our SME strategy, which is aimed at leveraging our corporate banking ecosystem to identify new SMEs for funding.

Leina Gabaraane, chief executive officer — Stanbic Bank Zambia.

By 2022, we plan to quadruple the number of women-owned SME borrowers from 50 to about 200, representing an outstanding portfolio of 80 million Zambian kwacha, up from 16 million Zambian kwacha.

Leina Gabaraane, chief executive officer — Stanbic Bank Zambia.

• Read Also:New African Startup Fund From China’s Transsion and Kenya’s Wapi Capital Expected From September, 2019

• Along with the financing, IFC will help Stanbic Bank enhance its environmental and social risk management system. This includes formulating detailed procedures for identifying, assessing, and managing risks and their impacts during the credit approval and monitoring process.

IFC’s partnership with Stanbic Bank Zambia will expand access to finance for the country’s SMEs, enabling them to grow and create jobs.

Kevin Njiraini, regional director for IFC — Southern Africa

The project also marks a new frontier in IFC’s relationship with the Standard Bank Group, and we look forward to future engagement with the group’s other subsidiaries.

Kevin Njiraini, regional director for IFC — Southern Africa

IFC estimates that SMEs that receive financing through Stanbic Bank’s new line could create close to 3,000 local jobs over the next five years.

Stanbic Bank Zambia is a leader in the Zambian banking sector and has a market share of about 15% by total assets and 21% by loans. It will leverage its recently launched banking proposition for women, called Anakazi Banking, to attract women-owned enterprises.

This will be IFC’s second investment with Stanbic Bank Zambia after a $11 million subordinated loan in 2006.

How To Access The Loan

Anakadzi Banking

There are different channels established by Stanbic Bank Zambia through which startups and SMEs in Zambia can access the loan. One of such is Anakadzi Banking. 

Anakadzi Banking is designed for women, by women and aims to reward the discerning woman who reaches for the stars and has the drive to turn her dreams into a reality.

Business Term Loans

Stanbic Bank Zambia’s Business Term Loan supports businesses in achieving their long-term financial goals. To make repayments suitable for your business, monthly instalments are matched to your business’ cash flow. The term of your loan can be structured for between 3 and 5 years.

What does it offer?

• A Business Term Loan may be used to buy or upgrade fixed property, finance fixed assets, capital expenditure or for the set-up of venture costs
• A term loan may, however not be used for the consolidation of debt or as a substitute for vehicle and asset finance.

Who can apply?
Business clients with an existing transactional account with Stanbic Bank Zambia.

To know more, contact any Stanbic Bank in Zambia nearest to you.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

It appears renewable energy startups in Africa may have found the perfect square peg in a square hole with Accion Venture Lab Fund and other VCs launching funds to tackle one of Africa’s greatest problems — electricity . 

Thanks to Evolution II, a closed-end sub-Saharan Africa fund, there is now a new investment fund worth USD 216 Mn for startups in Africa’s renewable energy sector. Investment in the fund came from several international investors.

Here Is The Deal

• The main investors in the new fund included: European Investment Bank (EIB), Commonwealth Development Corporation (CDC Group), the UK Government’s Development Finance Agency and KLP Norfund Investments of the Norwegian Government.
• A number of private investors also took part in the funding round for the ten-year closed-end fund.
• The fund belongs to Inspired Evolution, an Africa-focused investment advisory firm that specializes in the clean energy sector. The company planned the fundraising through its platform.

“Investing in clean energy is a key priority for CDC Group and investing in the Evolution II fund will improve access to renewable energy in sub-Saharan Africa, thus contributing to the fight against climate change. We look forward to a collaborative and productive partnership,” said Setor Lassey, Director of CDC Group’s Investment Funds and Partnerships Team for Africa.

The Impact of Evolution II Fund So Far

The impact of Evolution II in energy sector investment in Africa are many. In February 2019, the fund invested USD 7.47 Mn in Commercial Energy South Africa which is an affiliate of SolarAfrica. The platform provides funding solutions for long-term private commercial and industrial (C&I) solar PV customers, through SolarAfrica’s network of EPC contractor partners.

Although Africa has not taken maximum advantage of its renewable energy resources, the continent has increased its renewable energy capacity. As of 2014, the continent had 1.8 gigawatts of renewable energy capacity, this is according to a report by Bloomberg New Energy Finance.
Thanks to renewable energy, millions of people are accessing electricity for the first time as the continent moves to leverage renewable energy to increase generation capacity.

Read Also:How Startups In Nigeria Are Disrupting Nigeria’s Electricity Problems

The sector has received a major financial injection which will be channelled to finance renewable energy companies and projects across Africa.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

More fintech startups in Africa now have a new chance at funding.

 Accion Venture Lab — the seed-stage investment arm of non-profit Accion — has raised $23 million for a new inclusive fintech startup fund.

Here Is All You Need To Know

• The new fund was raised with capital contributions from a number of participants, including the Ford Foundation, Visa Inc. and Proparco — the development finance institution of the French government.
• The additional $23 million brings Accion Venture Lab‘s total capital under management to $42 million.
• The Accion Venture Lab Limited Partnership, as its called, will make seed-stage investments in inclusive fintech startups, defined as ventures that “that leverage technology to increase the reach, quality, and affordability of financial services for the under-served at scale,” per a company release.
• The new LP fund will consider startups from any geography, as along as they meet specific criteria. Overall, Accion Venture Lab doesn’t have regional investment quotas, but does look to allocate roughly 25 to 30 percent of its funds to Africa, Accion Venture Lab Managing Director Tahira Dosani said.
• The Ford Foundation contributed $2 million, according to an email from Christine Looney, Deputy Director, Mission Investments. Visa didn’t disclose its capital contribution, but said it will play a role in governance through its participation in a Limited Partners Advisory Committee for the new fund.

“We want to continue to focus on Latin-America, on Sub-Saharan Africa, on Southeast Asia as well as in the U.S. It really is about…where we see the need and the opportunity across the markets that we’re in,” she said.

In line with Accion’s mandate to boost financial inclusion globally, Accion Venture Lab already has a portfolio of 36 fintech startup investments across 5 continents — including 9 in the U.S., 8 in Latin America, and 8 in India.

“Our goal is to really be the that first institutional investor in the companies we invest in. That’s were we see the biggest capital gap. And it’s where we build capability and expertise,” Dosani said. In 2018, Accion Venture Lab successfully exited Indian fintech company Aye Finance, following exits in 2017 and 2016.

Support So Far

This year Accion Venture Lab supported a $6.5 million Series A investment in Lulalend, a South African startup that uses internal credit metrics to provide short-term loans to SMEs that are often unable to obtain working capital.

Tahira Dosani, Managing Director, Accion  VentureL

The New Fund Is Targeting With The New Fund

Accion’s new LP fund will follow past practice and make investments typically in the $500,000 range. It will start sourcing startups immediately through its investment leads around the world and already made its first seed financing to U.S. venture Joust — a fintech platform for gig economy workers

Accion Venture Lab’s LP fund is the first time the organization has pooled third-party investment capital, according to a spokesperson.

On the appeal for those contributing, Dosani named Accion’s geographic reach and experience. 

“We think that’s our strength, because we’re able to invest in similar business models across different markets. And we’re able to bring that knowledge from one market to another,” she said.

As a point of observation, Accion Venture Lab stands out as a fund for giving an equal pitch footing to fintech ventures across frontier, emerging, and developed markets from Lagos to London.

Accion’s new LP fund — along with the organization’s commitment to make nearly a third of its investments in Africa — means more capital to digital finance startups on the continent. By a number of estimates, Africa’s 1.2 billion people still represent the largest share of the world’s unbanked and underbanked population.

This is a chance for startups in North Africa to pitch for funding RiseUp’s Pitch by the Pyramids event. 

Building on the successes of past startup competitions and RiseUp’s extensive reach in MENA’s startup ecosystem, RiseUp is launching the region’s greatest pitch competition yet, Pitch by the Pyramids. Startups from across the Middle East and Africa are invited to join by participating in their local country qualifiers hosted by our regional partners in Cairo, Dubai, Tunis, Beirut, Riyadh, Amman, Baghdad and Ramallah.

Here Is All You Need To Know

• Finalists will get to Pitch by the Pyramids at the grand final event at the Pyramids of Giza, in Egypt. Among the hundreds that will be in attendance are local and international media heavyweights, renowned investors, and industry leaders waiting to hear what MENA’s got to offer this year!

Who can apply?

• Purpose driven startups
• Startups with disruptive business ideas
• Startups between 0–3 years of operation
• Scalable business model.

How To Apply

Submit your application by September 21st.

About Pitch By The Pyramids

For thousands of generations, Egypt’s pyramids have stood as a symbol of innovation for Egypt and the region. According to the organizers, today, the pyramids stand as a reminder for the world’s youth that the impossible can be built. 

That’s why RiseUp is inviting MENA’s most inspiring youth to participate in Pitch by the Pyramids, and get the chance to stand where history’s greatest once stood and tell a story that could one day change the future.

This is not just a competition for startups to showcase their ideas, but also a program that provides the startups with relevant webinars, mentor-ship and coaching that would help them develop as individuals and as an entity, the organisers noted.

 RiseUp is a North African organisation with focus on assisting startups raise funds for their businesses.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

The fifth edition of the annual Lagos Startup Week will take place on September 23-28, showcasing the city’s startup community and connecting entrepreneurs with potential investors, customers and partners.

Lagos Startup Week takes place this year under the theme “Collaboration – Together We Can Achieve More”, and will host over 30 speakers. Targeting 4,000 participants, it will feature satellite events hosted by hubs and startups from around Nigeria.

The focus is on areas such as new communities, corporate innovation, ed-tech, and urban mobility, while the week will also include the Women who Launch Summit, promoting female leadership in tech.

“The collaboration between Lagos Startup Week and other stakeholders in the ecosystem is a great indicator of the interdisciplinary approach we’ve taken from the very beginning. By working together we are driving forward the inclusiveness and interconnectedness of various talents and encouraging communication and exchange that will lead to facilitating new developments and ideas,” said event co-organiser Olumide Olayinka.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/