Ingressive Capital, a Nigerian seed stage venture capital (VC) firm, has doubled its African tech start-up fund to $10 million.
This is despite a report by Cape Town-based start-up accelerator, AfricArena, suggesting investment in African start-ups could drop by up to 40% this year.
Pre-seed and seed stage start-ups stand to be most at risk. This is because bets VCs do make during the coronavirus crisis will likely be on established start-ups or on their own portfolio companies.
“We have a lot of dry powder for new pre-seed deals,” says Ingressive’s founder
But Ingressive – a VC focused on pre-seed and seed stage start-ups – is set on propping up those early stage tech start-ups too valuable to fall victim to the crisis.
The $10m fund
Ingressive averages $200,000 to $400,000 in individual investments and aims for 10% ownership in the companies it funds.
New investors in the fund include Nigeria Sovereign Investment Authority, Plexo Capital, and Platform Capital. Y Combinator’s CEO, Michael Seibel, is also a backer.
The VC says a host of investors from roughly ten fund and accelerator platforms have joined the fund too. These include individuals from Techstars and Western Technology Investment (WTI).
“We have a lot of dry powder for new pre-seed deals and we’re still very actively investing in companies,” Ingressive’s founder, Maya Horgan-Famodu, told Quartz Africa.
Horgan-Famodu said Ingressive has already backed four new companies so far in the second quarter of 2020.
First stop Egypt
To date, Ingressive has focused on start-ups in Nigeria, Kenya and Ghana.
The VC’s portfolio includes Nigerian payments start-up Paystack, and geonomics research start-up 54gene, as well as Ghanaian SME business coach OZÉ.
The fund is also looking into North Africa, starting with Egypt.
Egypt saw its start-up scene gather considerable momentum in 2019. According to Venture Burn, the country saw 24 deals raise a total of $73.3 million last year.
Cairo-based bus transport start-up Swvl landed the biggest VC deal with a $42 million funding round. The spike in interest for Egyptian start-ups follows government involvement in the fintech scene.
Last year, the Central Bank of Egypt established a fintech regulatory sandbox as well as the $57 million Fintech Fund.
Other funds for African start-ups
In April, the Future Africa Collective launched to offer African companies investment “at the earliest stages” of funding.
Unlike funds backed by institutional investors, the Future Africa Collective works more like a crowdfunding platform. It aims to source funding from Africans looking to tap into start-up investment opportunities.
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Source: https://www.fintechfutures.com/2020/06/ingressive-doubles-african-tech-start-up-fund-to-10m/
