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Towards an AfroChampions fund to finance the African Continental Free Trade Area (AfCFTA)     |     Here Is The Pitch Deck That Secured Clearbanc $300m in Series B Financing Less Than A Year After Its First Funding Round     |     Here Is Why Africell Is Planning To Invest $100 Million In Fintechs     |     South African Startups Have A New Fund      |     China Launches $1 Billion Belt and Road Africa Fund. This Is How It Will Look Like     |    
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Towards an AfroChampions fund to finance the African Continental Free Trade Area (AfCFTA)

August 7, 2019
AfroChampions

On the occasion of a high-level meeting convened in partnership with His Excellency Dr. Mahamudu Bawumia, Vice-President of the Republic of Ghana, and bringing together investors, financing institutions and sovereign and private funds, the AfroChampion Initiative has formally launched a private sector investment framework to secure financing for the African Continental Free Trade Area (AfCFTA).

The objective is to mobilize the private sector, in Africa and beyond, through a dedicated blended-finance vehicle to accelerate the continent’s economic integration, by rapidly deploying those infrastructure projects which are critical to successfully delivering the AfCFTA and making it a positive transformation for Africans.

The proposed framework is forward-looking and includes many proposals from the AfroChampions Boma on Infrastructure Financing and Delivery organized last April in Nairobi with the African Union’s High Representative for Infrastructure His Excellency Mr. Raila Odinga.

Considering that key enablers of the AfCFTA are the removal of non-tariff barriers, the deployment of transport and connectivity networks, access to cheap energy, and African economies’ upscaling towards more value-added products, the framework defines a range of priority opportunities as well as structuring projects to be financed, under certain conditions, by the fund set up for that purpose.

Most importantly, the AfroChampions Initiative also provides for an annual benchmarking process to follow up on this program as well as on national reforms transcribing the AfCFTA to improve African states’ cross-border business-readiness.

“With the AfroChampions Initiative, we have found partners committed to our vision of a prosperous and integrated Africa and working to implement practical solutions.

The AfCFTA Private Sector Investment and Financing framework is a very thorough approach: monitoring the AfCFTA agreement’s legal implementation, defining certification criteria qualifying projects eligible for funding, mobilizing the private sector in Africa, and a process to coordinate with the public authorities ” said H.E.M. Albert Muchanga, African Union’s Commissioner for Trade and Industry.

“The African Union’s Summit in Niamey gave us a great opportunity to raise awareness among Heads of State and we hope to be able to move quickly on this ambitious roadmap.”

“To address reluctance and concerns about the AfCFTA, we must demonstrate that it is a major and tangible opportunity for all stakeholders, whether states or companies regardless of size, civil society or individual citizens of the African continent. And this AfCFTA Private Sector Investment and Financing Framework is the best tool for realizing that goal,” said Ali Mufuruki, Vice-President of the AfroChampions Club for the East Africa Region.

“We need to work better together across borders and focus on high-impact regional or pan-African projects – because they are the most likely to attract the volume of funds that we need. This is our main challenge today”.

The participants in the Accra session defined at the end of their workshop a detailed roadmap, including various milestones over the next 18 months. Among the key dates is the presentation of the dedicated fund, scheduled for the 4th quarter of 2019 for the next AfroChampions Boma, the first benchmark and a follow-up report on the AfCFTA implementation and the organization of an exhibition on ‘made in Africa’ early 2020.

 

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

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Here Is The Pitch Deck That Secured Clearbanc $300m in Series B Financing Less Than A Year After Its First Funding Round

August 4, 2019
Clearbanc funding

Less than a year after its first round of venture funding, the Canadian Clearbanc, a startup which provides funding for other startups to spend on marketing and customer acquisition, has secured $300 million Series B financing round on Wednesday. This is record-breaking for a startup that just raised $70 million in December 2018. 

  • The round was led by Highland Capital and existing investors Inovia and Emergence Capital.
  • Canada-based Clearbanc, which was pitched as an alternative to traditional venture capital funding, last raised $70 million in December.
  • See the pitch deck the Clearbanc team used to get traditional venture investors on board with its unconventional sales pitch.

Clearbanc is betting that venture capital is the next in line for disruption, and they just raised $300 million in venture funding to prove it.

Clearbanc funding

The Canadian startup, which provides funding for other startups to spend on marketing and customer acquisition, announced Wednesday a $300 million Series B financing round led by Highland Capital, Inovia, and Emergence Capital. The financing portion of the round was led by Arcadia Funds with participation from Upper90 Ventures.

Clearbanc pitches itself as an alternative to venture capital for startups spending heavily on things like Facebook and Google ads, and this is its second venture funding round in less than a year. According to Pitchbook data, the company closed a $70 million Series A in December.

Clearbanc claims to automate the pitching process using a machine learning model that can supply companies with anywhere from $10,000 to $10 million in funding instead of giving up a portion of the company to an investor just to turn around and spend the funds on ads. This model works particularly well for e-commerce startups that need to get in front of new customers to grow, according to Gary Vaynerchuk, CEO of VaynerMedia and Clearbanc investor.

So how was the Clearbanc team able to sell traditional venture investors on a model that is in direct competition with their own? Here’s the pitch deck that convinced investors that disruption could be worth $300 million.

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Source: Click here to see the complete deck and full article

 

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/

Here Is Why Africell Is Planning To Invest $100 Million In Fintechs

July 27, 2019
Africell

Fintech is where the money is. Africa’s fintech companies have raised $320 million in funding since January 2015 and the ecosystem has surged 60% in the last two years. Africell understands these statistics and is willing to use its wide reach to give it a shot. With $100 million funding from the OPIC, the US government’s private investment fund, the African telecom company is more than ready to continue the disruption game. 

Here Is The Deal

  • The Uganda-headquartered Africell’s new funding is more than $100 million and part of this would be used by the company to expand access to telecommunications in Africa. 
  • The countries Africell is targeting are Uganda, DRC, Gambia and Sierra Leone.
  • Apart from this $100 million funding, Africell has set aside $300 million to spend on a new market like Angola within the first year of commencing business if they secured a license. 
  • Africell would bid to become the fourth operator in Angola, which was expected to reissue a tender in the next two months after the original tender for the license was annulled in April.
  • A larger part of the $100 million would be spent on fintech. 
Source: World Bank

  • The unbanked population is what Africell is targeting here. 
  • Global fintech funding rose to $111.8 billion in 2018, up 120 percent from $50.8B in 2017 and that is a huge opportunity Africell is hoping to tap into. 
  • To make this happen, Africell is looking at expanding its fintech services, such as mobile payments, micro-insurance, and micro-finance.
  • Mobile money payments, pioneered in Kenya, have expanded rapidly in other African nations where many people do not have bank accounts.
  • The 18-year-old company has 15 million subscribers across its four African operations. 

The Game Is In Competing Profitably And Not Just Expanding 

“We are looking only at markets where we can make a difference,” said Africell founder and chief executive Ziad Dalloul indicating this included Angola and Zimbabwe.

He said Angola was attractive because the country’s state-owned Angola Telecom had a large market share that could be vulnerable to a more aggressive private operator like Africell.

“Day one, we can just change the whole thing…drop market prices, expand into rural areas, provide faster, better service on internet. These are the things we know how to do. So that’s why we are keeping an eye on Angola,” he said.

And Africell Is Turning Its Eyes On Fintech For Reasons More Business Than Charitable

“No space has quite the potential impact of the fintech space when it comes to impact — and profits — in Africa, with startups operating such platforms able to significantly address the major issue of financial exclusion on the continent and thus promote development in all sorts of other areas,” says Disrupt Africa co-founder Tom Jackson.

Nigeria led the investments in 2018 with 58 startups raising $94,9 million, followed by South Africa with 40 businesses that raised $59,9 million, and Kenya was third.

Fintech investment was still the most popular, bringing in 39.7% of total funds “South Africa, Nigeria and Kenya remain the main three markets, with 141, 101 and 78 active ventures respectively, accounting for 65.2% of Africa’s fintech startups,” Jackson says.

US fintech investment for 2018 more than doubled to $52.5B, from $24B in 2017, across a record 1,061 deals.

 

 

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/

South African Startups Have A New Fund 

July 23, 2019
South Africa Startups

Good news for startups and small businesses across South Africa. A new R130 million (over $9.3m) fund is at stake, targeting only 10 startups, each of which must have a black founder. The new fund is from Cape Town-based venture capital firm, 4Di Capital and the SA SME Fund.

South Africa Startups
 

A Look At The Fund

  • Cape Town-based venture capital (VC) fund with the launch of the R130-million fund aims to invest in at least 10 tech startups. Half of the R130-million will be targeted at startups with at least one black founder.
  • The over R1.4-billion SA SME Fund is capitalized presently by 54 JSE-listed firms and R500-million from the Public Investment Corporation (PIC). The fund was launched under the CEO Initiative. 4Di Capital is one of eight funds that the SA SME Fund has invested in (see this story).
  • 4Di Capital partner Justin Stanford noted that R125-million of 4Di Capital Fund III’s first close of R130-million was from SA SME Fund, the rest has been committed by the VC.

“We will be looking at options in terms of raising additional capital for the fund but for now there are no fixed plans yet — in principle though the fund is still open to new investment,” said Stanford.

4Di Capital’s new R130m fund is backed by R125m from the SA SME Fund

Who Can Access The Funds?

Stanford said the fund will follow the VC’s usual modus operandi, which is to target tech startups in the early and growth stages.

The fund is vertical agnostic but the VC will look at deals for example in: 

  1. Insurtech
  2. Fintech
  3. Edtech
  4. Agritech, adding that the VC will look at a spread of both early and growth stage.

“It is designed to work together with our Exponential Fund as well, so will also co-invest in certain deals that match the mandates on both sides,” he added.

He added that the fund will invest in at least 10 companies and pointed out that the first few deals are already under consideration.

A portion of the SA SME Fund capital has been earmarked for companies that have founder teams which include black founders.

See Also: South Africa: How To Get National Empowerment Fund (NEF) To Support Your Startup

When asked how much exactly would go to startups with black founders, Stanford said while it is “difficult to predict” the exact amount that will be invested in the end, the VC fund will aim to invest “roughly half” of the R130-million in such firms.

4Di Capital is an independent and specialist seed, early and growth-stage technology venture capital fund manager based in Cape Town, South Africa with an office in Atlanta, Georgia, U.S.A., focusing principally on scalable South African and African technology opportunities.

Among others, the fund has already invested in the enterprise web platform, cloud scaling infrastructure, bio-mathematical health technology, and financial technology ventures.

The SA SME Fund, on the other hand, was established by members of the CEO Initiative — a collaboration between government, labour, and business to address some of the most pressing challenges to the country’s economic growth — as an avenue of support for the SME sector.

It allocates investment capital to accredited fund managers — venture capital or growth-oriented equity funds — that invest directly in scalable small and medium enterprises with the best potential for growth and sustainable employment creation in the South African economy.

 

 

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/

China Launches $1 Billion Belt and Road Africa Fund. This Is How It Will Look Like

July 4, 2019
Belt and Road Africa Fund

Don’t expect China to throw in the towel yet in Africa, despite the huge bad debt it has incurred so far on the continent. A new fund which is targeted directly at businesses in Africa has been launched on the sidelines of the World Economic Forum (WEF) meeting, currently underway in Dalian, China. The fund is code-named Belt and Road Africa Fund.

Belt and Road Africa Fund
 

For Whom Is The Fund Meant?

  • The key focus of the funds would be investments in infrastructure, technology, e-Commerce, artificial intelligence (AI) and the beneficiation of the resource industry in Africa.

“The discussions that we’ve had with Chinese businesspeople, state-owned enterprises and family offices, have resulted in the establishment of this fund,’’ says Sekunjalo chairperson Dr Iqbal Survé, head of the fund said. ‘‘Africa is ready to grow and is heading towards a $5 trillion economy. The Chinese have seen how China was able to grow from 1980 when China made up only 2 percent of the global gross domestic product (GDP) when compared to today, where China makes up 19 percent of the global GDP. This fund is a great boost for the development of Africa.’’

  • Contributors to the fund were not the Chinese government as has been the case, but several Chinese family offices and business people, who are expected to capitalize the fund with a billion dollars.
  • The fund, according to Surve, will serve as a bridge between African and Chinese businesses, thus strengthening, particularly, the co-operation between business sectors in China and Africa. In order words, the Belt and Road Africa  Fund would be between African businesses and Chinese businesses.
2018: Locational distribution of Chinese investment in Africa 

How African Businesses Can Be Part of The Fund

  • Once the Belt and Road Africa Business Council (which is the body that oversees the fund) headed by Surve is launched in September 2019, African businesses would start benefiting from the fund.

A targeted business should be in the:

  • infrastructure
  • technology
  • e-Commerce
  • artificial intelligence (AI)
  • the beneficiation of the resource industry sectors.

The Belt and Road Africa Business Council are targeting a membership of at least 1000 Chinese and African companies.

  • Dr. Survé said the fund will announce the format of these investments, at the launch in September.

READ ALSO: Ghana ’s New Consulate Opens In Guangzhou, China

A Look At The China Belt and Road Initiative

The Belt and Road Initiative, as outlined by Chinese President Xi Jinping, is one of the most important developments of China and its contribution to the global economy.

2018: Sectoral distribution of Chinese investment in Africa

Launched in 2014, One Belt One Road, presented internationally as the Belt and Road Initiative, is China’s signature vision for reshaping its global engagements. It hopes to achieve the Communist Party of China’s (CPC’s) twin objectives of achieving national rejuvenation and the task of making China the largest and the most powerful country on earth.

The Belt and Road Initiative now spans three continents and touches 60 percent of the world’s population. The 65 or so countries that have so far signed on to the program (including approximately 20 from Africa) account for 30 percent of the world’s GDP and 75 percent of its energy reserves.

Some 50 Chinese state-owned companies are implementing 1,700 infrastructure projects around the world worth about $900 billion. One Belt One Road (OBOR) has been written into the state and ruling party constitutions as strategic priorities for China to attain Great Power status by the middle of the 21st century. All of China’s leaders have advanced this quest since the founding of the People’s Republic of China, but the pursuit has accelerated under President Xi Jinping.

The One Belt One Road network. (Map courtesy of the Mercator Institute for China Studies)

One Belt One Road has two components:

  •  The Silk Road Economic Belt establishes six land corridors connecting China’s interior to Central Asia and Europe. It includes railroads to Europe, oil and gas pipelines from the Caspian Sea to China, and a high-speed train network connecting Southeast Asia to China’s eastern seaboard.
  • The Maritime Silk Road establishes three “blue economic passages” knitted together through a chain of seaports from the South China Sea to Africa that also direct trade to and from China.

The end state of One Belt One Road is the building of a new global system of alternative economic, political, and security “interdependencies” with China at the center.

One Belt One Road also increases Beijing’s control of critical global supply chains and its ability to redirect the flow of international trade. Central to these efforts are moves to open new sea lines of communication and expand China’s strategic port access around the world. In 2017, Chinese state-owned companies announced plans to buy or secure majority stakes in nine overseas ports, all located in regions where China plans to develop new sea lanes. This is in addition to the 40 ports in Africa, Asia, and Europe in which Chinese state-owned firms hold stakes worth a combined $40 billion.

 

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/
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