A new US$95 million Seed Fund has been unveiled by Flat6Labs (www.Flat6Labs.com), the top seed investor in MENA, to support the growth and development of early-stage ICT firms across the African continent. With over US$16M invested in startups and over US$191M raised in follow-on funding since its founding 12 years ago, Flat6Labs has a track record of carefully vetting out and investing in promising startups in North Africa. Additionally, it has created more than 2,500 direct jobs and 80,000 indirect jobs through its first two funds in Egypt and Tunisia.
The Africa Seed Fund (ASF), with its primary office in Egypt, will concentrate on three key investment regions in Africa: North Africa, West Africa, and East Africa. Nigeria, Ghana, Kenya, Morocco, and Senegal are a few of the new countries that Flat6Labs will be expanding into. Ramez El-Serafy and Dina el-Shenoufy, the fund’s general partners, will oversee the ASF. Over the course of the next five years, the fund will invest in more than 160 early-stage startups in the African technology sector, with a focus on impactful industries like HealthTech, FinTech, EdTech, GreenTech, AgriTech, ClimateTech, and others that use information technologies to address social and environmental challenges and accelerate digital inclusion.
The huge infusion of funding from the ASF has the potential to assist more than 1,200 founders with 20% female participation, produce more than US$700M in revenue, and create more than 14,000 employment.
The general partner of ASF, Ramez El-Serafy, states, “We are really delighted about the opening of the Africa Seed Fund. With its enormous untapped potential and distinctive business opportunities, Africa is one of the most exciting places to invest in technology and innovation. In order to help the startup founders build truly scalable, investment-ready, African firms, we will draw on our experience and knowledge.
In 2022, the African tech ecosystem grew further. The funding for the African sector climbed to US$6.5B in 2022 from US$6.0B in 2021, according to the Partech 2022 Africa Venture Capital Report (https://apo-opa.info/3Th8e6Y). Against the global headwinds, it is evident that the fundamental forces guiding the rise of the African IT ecosystem have won.
With the Africa Seed Fund, Flat6Labs will invest in 160 businesses that are in the Pre-Seed to Pre-Series A stage, with tickets ranging from US$150K to US$500K through the Africa Seed Program. In addition, the company will offer seed tickets to seasoned founders outside of the program. In follow-on rounds, ASF will also be able to reinvest in its portfolio firms.
In order to help portfolio entrepreneurs launch and expand their businesses, Flat6Labs’ Africa Seed Program offers startup capital, local business support, access to a network of seasoned local mentors, and logistical and regulatory assistance. With a hybrid strategy that combines virtual components that enable cohort connections across the whole fund region with real on-the-ground engagements in local marketplaces, the program also adapts to be regional. There will be two cohorts per year, each consisting of 10 to 15 businesses. Before the end of 2023, the initial investments in the chosen firms are anticipated.
“The Africa Seed Fund is well-positioned to be a catalyst for creating long-term good change that the youth of Africa genuinely deserve, and to giving resources to the brightest of them, while speeding the future of the African continent,” says Dina el-Shenoufy, general partner of ASF. The program’s goal is to give business owners the tools they need to expand and scale up their operations to new heights.
“We have noticed that the startup market has grown with time, with a new generation of more seasoned founders. We will also accommodate these entrepreneurs, provide larger ticket sizes to help these businesses, and give a different route for the program, according to el-Shenoufy.
The German government is supporting the establishment of the Africa Seed Fund (ASF) through the Flat6Labs project (SAIS), the Egyptian Agricultural Innovation Project (AIP), and the Scaling Digital Agricultural Innovations through Start-ups project, all of which are funded by the GIZ (SAIS).