Lagos-based early-stage venture capital firm, Microtraction, has decided to change its standard deal by increasing its investment from $15,000 to $25,000.
Founded in 2017 by Yele Badamosi, the three-year-old investment firm invested in six startups last year — Schoolable, 54gene, Sendbox, Termii, Bit Sika, and Festival Coins, and 14 startups in total using the previous model of $15,000 in exchange for a 7.5% equity.
However, going forward, newly-accepted startups will get $25,000 will be in exchange for a 7% equity.
We are excited to announce that our investment has increased from $15k to $25k and we have reduced the percentage we take to 7%.Advertisement
Our goal has always been to be the most accessible and preferred source of pre-seed funding for African tech entrepreneurs🚀https://t.co/9FBzDhOluH
— microtraction (@microtraction) March 3, 2020
The investment firm cited these changes to the rise in startup costs over the years.
“We believe our financial investment is a small part of the benefits of being a Microtraction portfolio company. But we also understand that startup costs have increased over the years with a maturing African market
“In order for companies we invest in to stay focused on building their product without having to worry about fundraising soon, we thought it best to increase our investment by $10,000,” Microtraction said in its blog post.
The 14 startups and 28 founders Microtraction has invested in span across multiple sectors like fintech, crypto, health-tech, event and ticketing, SaaS, and edtech.
Collectively, they have raised more than $9.5 million with a combined valuation exceeding $51 million.
NEW REPORT ALERT: “Millionaire West African startups” raised over $1.806 billion between 2010 and 2019, 97.9% of which went to Nigerian startups. Find out more in the full report.
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