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The fund will make early-stage minority investments from $250 000 to $5-million in the most promising and innovative ventures across sectors and countries. The fund is expected to make its first investments by the end of this year (see this story).
Ventureburn caught up with Seedstars World chief investment officer Charlie Graham-Brown via email to find out more on how the fund will work.
When will you make the first investment?
Along with the first close of the fund at the end of 2019.
When was the agreement signed with First Growth Ventures?
The Seedstars and First Growth Ventures teams have a long standing relationship through various other working experiences. The discussion around a potential collaboration for an African fund started in January with an agreement was signed on 3 April 2019 and announced on 4 April 2019.
What kind of tech startups and tech companies will you invest in, what kind of verticals, countries will it be?
The fund looks to invest in the most promising entrepreneurs who are not getting the attention of the current funds. Currently most pan African VCs focus on tech and tech-enabled businesses only. We look at innovation at large, including tech and beyond tech: startups and scalable, dynamic enterprises alike lack access to efficient capital even though they have identified the pain points of their market and have the required management capacity to scale.
Seedstars earlier this month announced the launch of a $100-million fund to invest in African startups in collaboration with First Growth Ventures
The fund will invest across sectors and countries, and will target the most promising entrepreneurs, capable of providing a service or product that will target the entire population, beyond the digital frontier. Some of the sectors we find particularly dynamic and attractive include:
- Access to primary, secondary and tertiary education (edtech)
- Access to property, housing and real estate (proptech)
- Agriculture, processing, trade and food value chain (agritech)
- Business applications, infrastructure and manufacturing
- Consumer Goods and Services
- Financial services (fintech)
- Healthcare and solutions (medtech)
- Renewable energy and energy efficiency (cleantech)
- Transport and Logistics
- Utilities (water, sanitation, waste)
There are scalable enterprises across sectors in a number of countries, including Senegal, Côte d’Ivoire, Ghana, Rwanda, Ethiopia and Tanzania. The fund will also look at countries where other investors may not be as present, both in Eastern and Western Africa
Who will identify the deals?
The investment team will scout the market for the best opportunities through all the usual channels available including through Seedstars network and pitching events.
What is the maximum ticket size and what kind of equity percentage will you take?
Depending on the stage we get in as well as the amount invested, we target minority stakes in the 10% to 30% range. We have the ability to invest up to $5-million per company, including follow-ons on our initial investments.
Featured image: Seedstars World chief investment officer Charlie Graham-Brown (Seedstars via Youtube)