EchoVC has today announced the launch of a new pre-seed fund, EchoVC Eco Pilot Fund I. The fund is a $2.5 million fund targeted at startups building climate, mobility, energy, and agricultural solutions.
According to Eghosa Omoigui, the firm's Managing Partner, the goal of the fund will be to provide startups with their first institutional cheques while providing further fundraising assistance.
"As a pilot fund, we want to sponsor a pipeline of high-quality founders that create high-quality companies that can be supported later by the increasing number of climate and energy-focused funds," he said while hinting at a larger fund to be unveiled in 2024.
Quite a few VC firms have launched funds dedicated to startups in Africa's climate sector in the last 12 months. French VC firm, Satgana announced the first close of a $32 million fund to invest in startups in the energy, mobility, food, and agriculture sectors in 2022.
This year, Catalyst Fund also hit the first close of a $40 million climate fund, while Equator announced a fund for startups in the energy and mobility spaces. EchoVC's fund, which comes seven months after it launched a blockchain fund, is the result of over a year's study.
It is also a response to the dearth of early-stage funding for Africa's climate-focused startups.
"As we see more mid-sized and large funds coming to market to back climate and energy startups, we have struggled to find any that are set up to take first money risk or do the work to help kickstart the companies that will later be candidates for investment by these funds. The continent needs these pre-seed stage companies to create and deploy the solutions necessary to meet market demand and enable climate-resilient economies," Taiwo Kamson, Principal at EchoVC, explained.
EchoVC has previously invested in startups in the mobility, agriculture, climate, and energy sectors, such as Shuttlers and Complete Farmer. However, it says the size of this fund will enable it to learn the peculiarities of investing in these startups.
With a mission to support under-represented founders, the Eco Pilot Fund I will invest in up to ten startups at the pre-seed stage. These startups will be building solutions that provide access to finance, insurance, and markets for Africa's smallholder farmers.
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Startups that provide renewable energy solutions and innovative approaches to urban transportation will also be considered by the fund. While the fund has an African mandate, most of its investments will go into startups from Kenya and Nigeria.