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.

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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

The Algerian Startup Financing Fund, which was officially launched at the National Conference of Startups, “Algeria Disrupt 2020”, and has been operational for a year, has raised one 1 billion dinars ($7.2m) to fund innovative startups. The fund will be “increased upwards according to needs and requests,” said Yacine El Mahdi Walid, Minister Delegate to the Prime Minister in Charge of the Knowledge Economy and Startups, on the sidelines of the National Conference on Startups held in Constantine, the commercial nerve center of Algeria’ eastern region. 

Walid also stated that further financing for “prototyping activities” is expected soon.

Here Is What You Need To Know

• The funding is aimed at “founders who have not yet created their Startups,” Walid said, adding that “the Algerian state, through various support measures dedicated to the promotion of Startups, aims to develop financial inclusion for a better mobilization of financial resources.” 

• “Building a knowledge economy necessitates the transfer of a material economy to an intangible economy,” the Minister Delegate emphasized, noting, however, that the fund “does not” follow the traditional approach of employment assistance schemes, but instead goes to startups by way of equity investments.

• According to Walid, easing access to funding for innovative startups will allow these businesses to take advantage of financing options other than the usual ones.

• He, while referring to “co-financing (funds and banks) as a method of supporting innovative enterprises,” added that “facilities have been offered in partnership with the Central Bank for the export of startup services, notably in the sector of the digital economy.”

• Concerned about competition, the Minister Delegate emphasized the critical significance of an organized legal and regulatory framework in ensuring that each company has an equal opportunity to grow and flourish. Accordingly, he highlighted that it is critical for startups to obtain “their label”, a mechanism that would assist them to compete with established incumbents. 

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“624 startups have obtained their national startup labels(i.e. 63 percent of total requests). Also, 6,657 people registered on the national official startups website, out of which 2,000 have applied for the label,” the Minister Delegate said. 

Algerian Startup Fund label Algerian Startup Fund label

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 write