NIGERIA – Future Africa, a platform that provides capital, coaching, and community for African innovators, just announced that it invested a total of US$1 million in nine African startups in the third quarter of this year.
The firm was founded by Andela and Flutterwave co-founder, Iyinoluwa Aboyeji; Olabinjo Adeniran, Adenike Sheriff, and Chuba Ezekwesili in March 2019.
January 2020 saw the firm launch the Future Africa Fund dedicated to investing in African startups. The capital arm of the organisation, the Future Africa Fund, wanted to back 20 founders with up to US$50,000 each year for less than 11% equity.
Aboyeji, who serves as Founding Limited Partner alongside co-Andela-founder Nadayar Enegesi, explains that while the Future Africa Fund had previously written checks to different startups years back, it was only just making the process official.
“We believe there is a truly unique opportunity for innovators to turn our continent’s biggest challenges into massive business opportunities.”Iyinoluwa Aboyeji – Founder, Future Africa
“We’ve been investing as angel investors before now and while some failed, we’ve exited quite a number of startups. A lot of those investments were made in the last year, what we just did was to formalise our angel investment process,” said Aboyeji.
In April, Future Africa launched its syndicate fund for angel investors: Future Africa Collective. The strategy was to allow qualified investors to sign up with Future Africa and co-invest on a deal-by-deal basis via investment syndicates (usually institutional VC firms and angel investors).
According to Sheriff, Future Africa chief of staff, these investors get access to 20 startups annually as members of the syndicate. For individuals, this is in exchange for a subscription fee of US$1,000 and for institutional investors, US$10,000.
Also, in each deal, the minimum ticket size for anyone partaking in a round is US$5,000.
Subsequently, the syndicates pool capital from these investors into a special investment vehicle. After that, they invest the pooled funds in a company.
Future Africa, on the other hand, sources the deals, analyses and vets the investments. At the same time, the firm personally invests in every deal at no less than 20% of the total amount.
Since its launch, the Future Africa Collective has amassed 125 angel investors onto its platform. And while this number keeps increasing, Aboyeji points out that when there is an exit, the investors are required to pay Future Africa and its fund manager 20% of profits from their investment returns.
Then in July, the firm launched the Future Africa Rolling Fund, its investment subscription product. As the name suggests, this scheme allows investors to subscribe periodically throughout the year as opposed to a venture fund that raises capital every few years.
The startups Future Africa funded in Q3 2020 via its Fund, Collective, and Rolling Venture schemes include:
Bamboo: a wealthtech startup that gives Nigerians unrestricted access to over 3,000 stocks listed on the Nigerian Stock Exchange and US stock exchanges.
Eden: A tech-enabled concierge service for Nigerians to live better and simpler lives.
Releaf: A startup that improves the value-chain of agricultural products in Nigeria starting with the oil palm fruit.
Tambua Health: A healthtech startup that has invented precise, non-invasive, and radiation-free lung imaging devices for use by primary healthcare providers. It was the first deal closed by the Future Africa Collective.
Indicina: The fintech startup is building Africa’s credit infrastructure to digitise the credit value chain and improve decision making by creditors.
Evolve Credit: Launched in May 2020, the fintech startup is a marketplace for financial services in Nigeria.
Shara: Founded by Grant Brooke (also co-founder of Twiga Foods) in 2017, Shara is building free route-to-market software for consumer goods companies in developing markets.
MyAwayHome: A platform for diasporans to own and manage property back home.
Stears: A Nigerian-based media startup, Stears is building a media and data network for Africa to help individuals, development organisations, investors, governments, and companies access data needed to make informed decisions.
“We believe there is a truly unique opportunity for innovators to turn our continent’s biggest challenges into massive business opportunities. We will continue to provide capital, coaching, and community to founders building the future in Africa,” Aboyeji concluded.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE