Investor Updates: Global tech founders launch $200m fund targeting Africa’s next unicorns

Global tech founders launch $200m fund targeting Africa’s next unicorns

Highlights

• The founders of leading tech firms including Klarna, Skype, and Delivery Hero have commenced a $200 million venture capital fund to source potential tech ‘unicorns’ in Africa.
• Initiated by Sweden’s Norrsken Foundation, the fund, dubbed the Norrsken22 African Tech Growth Fund, has reached its first close of $110 million. It aims to raise $2 billion through engaging venture capital firms to co-invest in start-ups that could reach a valuation of over $1 billion.
• The fund has a list of around 400 possibilities concentrated in South Africa, Kenya, and Nigeria which it is considering as initial investments.

Source: Financial Times

Our Takeaway

While Africa saw significantly large later-stage rounds in 2021, with $100 million-plus rounds invested in unicorn startups like Flutterwave and Andela, there’s a dearth of growth and later-stage checks available to startups. For instance, by volume, early-stage deals dominated funding rounds closed by African startups last year as VC investments reached an all-time high of $4 billion. Norrsken22 plans to be the growth-stage firm that will enable startups unlock significant partnerships to grow revenue and facilitate expansion plans across Africa.

---

World Bank’s IFC leads $25m funding in Egypt’s Brimore

Highlights

• Brimore, a Cairo-based social e-commerce platform connecting suppliers to community sellers, has closed its Series A round of $25 million, led by the World Bank’s International Finance Corporation (IFC) and early-stage VC firm Endure Capital.
• The funds will be used to grow the company’s products and suppliers, double the number of employees, and boost the social commerce app’s reach throughout Africa.
• The platform has a network of 75,000 active sellers and 300 suppliers, offering more than 8,000 products in categories that include household goods, personal care, fashion, electronics, furniture, and food and beverages.

Source: Wamda

Our Takeaway 

Social commerce sales are expected to hit $1.2 trillion globally by 2025, from $492 billion in 2021, according to Accenture. With more than 1.25 million online users, the social e-commerce market in Egypt alone is estimated to reach $14.8 billion by 2024. Brimore is one of many startups enabling while tapping into this growth. It allows budding entrepreneurs to leverage its infrastructure and proprietary technology to boost their market presence and has grown rapidly since founded in 2017.

---

Nigeria’s Robinhood-like platform closes $15m Series A

Highlights

• Bamboo, an investment platform that allows Nigerians buy and trade US stocks in real-time from their mobile phones or computers, has raised $15 million in a Series A funding round led by American venture capital firms Greycroft and Tiger Global.
• Launched in January 2020 by CEO Richmond Bassey and COO Yanmo Omorogbe, Bamboo has rapidly grown in popularity with retail investors, claiming over 300,000 accounts in Nigeria.
• With the new funding, Bamboo plans to further accelerate its growth, doubling down on unlocking new markets and launching more products.

Source: TechCrunch

Our Takeaway

Retail investing in stocks is relatively new in Nigeria, and Africa at large, compared to developed markets such as the United States. As such, the continent’s wealth management market remains largely underdeveloped: Africans account for over 16% of global population but own less than 1% of global wealth. That is expected to change over the next decade, with Africa’s private wealth expected to increase to reach $2.6 trillion by 2030. Robinhood-like platforms like Bamboo are expected to play a major role in realising the projected growth.