[Nigeria] Carbon launches $100,000 entrepreneurship fund to champion African startups
Carbon has set up a $100,000 Pan-African fund to address the lack of funding and support holding back budding tech entrepreneurs on the continent.
Carbon’s Disrupt fund, the first of its kind by an African fintech startup, will invest up to $10,000 per startup (for 5 percent equity) and give access to Carbon’s API, allowing investees to leverage Carbon’s growing customer base and innovative technology platform, to get to market faster. Acknowledging that its success is dependent on the growth of the tech ecosystem, Carbon expects the initiative to spark more collaboration and further investment that should drive growth across the ecosystem. It’s not all altruistic, unfortunately!
Carbon is now accepting applications from companies with operations in Uganda, Kenya, Nigeria, Ghana, Cote d’Ivoire and Egypt. Startups looking to apply for the fund must have a functioning product, post revenue and looking to operate in multiple countries. The fund has a wide investment mandate but target sectors include insurance, health, education which have not seen as much investment as the fintech space.
More than 50 percent of startup funding on the continent in 2019 went to fintech firms1, despite the abundance of opportunities that exist in other sectors. Carbon’s Disrupt fund has been developed to tackle this head on, making it easier for entrepreneurs across all sectors to access the funds and support they need to establish their solutions and achieve their business objectives. The fund will also provide mentorship, access to Carbon’s customers and payment platform, as well as office space in Carbon’s Lagos offices.
According to Chijioke Dozie, CEO and co-founder of Carbon, “Common investor wisdom is to stay in your market and dominate. This assumes that you are expanding on your own but we believe that by collaborating and partnering deliberately, Carbon and other tech companies can scale faster and build more enduring platforms. There are many excellent companies across the continent looking for the kind of scale Nigeria offers and we are excited to partner with them to provide the support and financial investment they need. We are equally excited to expand beyond Nigeria and Kenya by working with a new generation of innovators across the continent and sharing our experience to tackle common obstacles to growth”
Ngozi Dozie, co-founder of Carbon, added “The investing environment for early stage startups has improved in recent years. However, 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. Our fund will enable this collaboration, allowing others to market to our customer base and vice versa - a win-win for everyone. As the saying goes, ‘if you want to go fast, go alone. If you want to go far, go together’”.
Since launching in 2016, Carbon has amassed 2.1 million users. The company disbursed more than $63.7 million in loans in 2019 and processed more than $140 million in transactions. In December 2019, the company announced its expansion into the Kenyan market, as well as its Carbon for Business platform which provides startups, small and medium-sized enterprises (SMEs) and FinTechs with access to uncollateralized credit, secure online payments, reliable funds transfer and fast KYC (know your customer) compliance obligations.
Interested entrepreneurs can apply to access the fund here.