Boost for investment skills of local capital providers in Africa

Ten fund managers active in Africa’s tech space have been selected from across the continent for the LAUNCH Capital Provider Fellowship Programme. Facilitated by the Collaborative for Frontier Finance (CFF), the initiative advances the capacity of these local capital providers (LCPs) to raise institutional capital.

LCPs are described as first-time fund managers based in market which can be a person or entity helping finance and allocate capital to businesses. They are either locally based fund managers or emerging capital allocators who are investing between $50 000 and $500 000 in tech or tech-enabled, small and growing businesses.

The majority of funds are targeting a fund size of under $20 million by providing early stage or growth capital in a mix of pre-seed, seed and Series A rounds, says Dr Susan de Witt, CFF director for the Frontier Capital Learning Lab.

“The LAUNCH programme will allow CFF to work closely with this talented group of fund managers, not only for the purpose of improving their individual prospects of raising investment but also to raise the profile and understanding of these types of capital providers amongst institutional investors for future cohorts.”

The funds are geographically spread across West, East and North Africa.

$230m. funding gap

According to recent CFF survey of 90 LCP’s in Sub-Saharan Africa, 96% have incremental funding needs and 85% expressed a need for technical assistance. There is an estimated $230 million funding gap in the LAUNCH cohort alone.

FMO partnered with CFF to help address this challenge through the entrepreneurial ecosystem building efforts of the FMO Ventures Programme Technical Assistance Facility, co-funded by the Dutch Government and European Union.

This LAUNCH Capital Provider Programme will take a market-based approach to fund manager resourcing meeting fellows where they are on their development trajectory and moving to investment readiness.

According to a media release, it is about enhancing their opportunity to be recognized and valued by institutional capital holders as potential managers to advance the capital holder’s own mission and investment objectives.

Marieke Roestenberg, FMO ventures programme manager, says “Local fund managers typically play an instrumental role in VC ecosystem development; we are thrilled to support CFF in helping these emerging fund managers from across the African continent to build out their fundraising and fund management capabilities so they can become a new generation
of much needed capital providers for early-stage start-ups and scale-ups.”

The insights generated from LAUNCH will inform both sets of stakeholders on how to best match capital with investment opportunities in this market segment. The funds selected include Actawa Ventures, Brightmore Capital, Five35 Ventures, Jaza Rift Ventures, Kenya Climate Ventures, Lotus Capital, Mirepa Capital, Ortus Africa Ventures, Unicorn Growth Capital and WIC Capital.

The LAUNCH programme has just started and runs for 15 months.

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