Nigerian fintech startup Carbon has set up a pan-African fund with the aim of addressing the lack of funding and support holding back budding tech entrepreneurs on the continent, it said in a press release.
The $100,000 Disrupt fund, said to be the first of its kind by an African fintech startup, will invest up to $10,000 per startup (for 5 percent equity). The fund is open to a wide array of startups but target sectors include insurance, health, education, which have not seen as much investment as the fintech space. Last year, over 50 percent of startup funding on the continent went to fintech firms.
More so, investees will be getting access to Carbon’s API, allowing them to leverage the company’s growing customer base of around 2.1 million users and its innovative technology platform, to get to market faster.
According to Ngozi Dozie, co-founder of Carbon, the investing environment for early-stage startups has improved in recent years but a key issue for most startups that has not been addressed is the cost of customer acquisition.
“A lot of money is spent on acquiring customers, mainly via social media, when a more collaborative approach among tech companies could be more efficient,” Dozie said. “Our fund will enable this collaboration, allowing others to market to our customer base and vice versa – a win-win for everyone.”
In addition to access to Carbon’s customers and payment platform, the fund will also provide mentorship as well as office space in Carbon’s Lagos offices. The company expects the initiative to spark more collaboration and further investment that could drive growth across the tech ecosystem, which is key to the company’s success.
“We believe that by collaborating and partnering deliberately, Carbon and other tech companies can scale faster and build more enduring platforms,” said Chijioke Dozie, Carbon CEO and co-founder.
Carbon, a product of OneFi, disbursed over $63.7 million in loans last year and processed more than $140 million in transactions, it said. In December 2019, the company announced an expansion into the Kenyan market, its Carbon for Business platform for startups, small and medium-sized enterprises (SMEs) and FinTechs, as well as the launch of a new iOS app earlier this month.
The company is now accepting applications from companies with operations in Uganda, Kenya, Nigeria, Ghana, Cote d’Ivoire, and Egypt. Startups looking to apply for the Disrupt fund must have a functioning product, post revenue and looking to operate in multiple countries.
Interested entrepreneurs can apply to access the fund via this link.