Nigerian fintech startup, Carbon, just announced that it has launched a $100,000 pan-African fund for startups.
According to the company, the Carbon Disrupt Fund was set up to address the lack of funding and support holding back budding tech entrepreneurs on the continent. It will invest up to $10,000 per startup in exchange for a 5% equity.
Also, startups will have access to Carbon’s API, and leverage Carbon’s growing customer base and innovative technology platform, to get to market faster. Additionally, the fund will provide mentorship, access to Carbon’s customers and payment platform, as well as office space in Carbon’s Lagos offices.
Acknowledging that its success is dependent on the growth of the tech ecosystem, Carbon expects the initiative to spark more collaboration and further investment that should drive growth across the ecosystem.
“The investing environment for early-stage startups has improved in recent years. However, a key issue for most startups that has not been addressed is the cost of customer acquisition.
“A lot of money is spent on acquiring customers, mainly via social media, when a more collaborative approach among tech companies could be more efficient. Our fund will enable this collaboration, allowing others to market to our customer base and vice versa – a win-win for everyone.” Ngozi Dozie, co-founder of Carbon said.
Carbon is now accepting applications from companies with operations in Uganda, Kenya, Nigeria, Ghana, Cote d’Ivoire and Egypt, and startups looking to apply for the fund must have a functioning product, be in post-revenue stage and looking to operate in multiple countries.
With more than 50 per cent of startup funding on the continent in 2019 going to fintech firms, the fintech startup says its Disrupt Fund will mainly target the insurance, health, education sectors, and other sectors that have not received as much investment as the fintech space.
Chijioke Dozie, co-founder and CEO of Carbon had this to say too.
“There are many excellent companies across the continent looking for the kind of scale Nigeria offers and we are excited to partner with them to provide the support and financial investment they need. We are equally excited to expand beyond Nigeria and Kenya by working with a new generation of innovators across the continent and sharing our experience to tackle common obstacles to growth.”
Although Nigerian startups still thrive on foreign investments, locally established entrepreneurs are doing their bit by creating investment funds to help up-and-coming entrepreneurs in Nigeria and Africa just as Jason Njoku did with Spark.ng, and Iyinoluwa Aboyeji and the Dozie brothers are doing with Future Africa Fund and Carbon Disrupt Fund, respectively.
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Nigerian startups raised $55.4m in Q1 2020; over 99% of which came from foreign sources. Find out more when you download the full report.