Proparco, Digital Africa launch support fund for African start-ups impacted by Covid-19

AFRICA – Proparco, a French private investor, has partnered with Digital Africa, a multi-platform documentary project, to launch Bridge Fund, their support fund for African start-ups impacted in their development by Covid-19.

The Bridge Fund is a co-investment worth €5 million (US$5.9m). It was designed to meet the financing needs of African start-ups whose economic impacts have caused the cancellation or delay in fundraising.

To be eligible for the Bridge Fund, candidate innovative tech companies will have to prove that they have been in existence for at least 18 months and have already received funds from an investor or a recognized structure.

They will also have to achieve 75% of their turnover, a minimum of €200,000 (US$236,810) on the continent or have at least half of their teams work there.

“With this fund, Digital Africa demonstrates clear support for our most promising digital ventures on the continent by providing investors leverage on their existing investments.”

Tomi Davies – Chief Investment Officer, Greentec Capital

“With this fund, Digital Africa demonstrates clear support for our most promising digital ventures on the continent by providing investors leverage on their existing investments. I encourage early stage investors and tech startups to consider this bridge between funding rounds alternative,” said Tomi Davies, Chief Investment Officer at Greentec Capital, founding President of the African Business Angel Network (ABAN) and official Patron of the project.

The start-ups targeted are those operating in sectors such as agriculture, energy, education, health, financial inclusion, logistics, green mobility, among others.

In concrete terms, the selected companies will be able to receive a loan similar to a bridging loan, with attractive conditions and for a period of up to 24 months.

“There is no doubt about the role of technological innovations, as they can potentially transform all sectors of activity – which makes digital entrepreneurs one of the keys to Africa’s economic recovery and makes the creation of this bridge fund even more relevant,” Digital Africa’s CEO Stephan-Eloïse Gras said.

The tickets, ranging from to €600,000 (US$710,440), will have to be co-financed by investors already active on the continent.

“In addition, the targeted companies must have already demonstrated that their business model works and have successfully gone through a first round of fundraising. The approach we have chosen therefore really consists in supporting growth, or, in other terms, scaling up projects,” said Johann Choux, Head of Venture Capital Investments at Proparco.

Digital Africa is a multi-platform documentary project about digital innovations and modern technology made in Africa and community of tech investors including incubators, institutional financiers, venture capital companies and tech clusters.

Proparco is the subsidiary of the French Development Agency (AFD) participating in the financing and support of businesses, financial institutions and social investment funds.

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