Investors update: August 15, 2023 - Founders Factory secures $114m to back African startups
3 min Read August 15, 2023 at 1:29 PM UTC
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Founders Factory secures $114m to back African startups
Highlights
- Founders Factory Africa has secured $114 million in funding to scale its model across the African tech ecosystem.
- The additional funding comes from the Mastercard Foundation and Johnson & Johnson Impact Ventures, an impact fund within the Johnson & Johnson Foundation, and follows on from previous investments by Standard Bank, the Small Foundation, and Netcare.
- The studio says it will use this funding to become sector-agnostic, address gender imbalances in the ecosystem, broaden its capital investment offering to include non-dilutive capital and strengthen internal capacity.
Source: Techpoint Africa
Our Takeaway
The funding is a rare bright spot for the pan-African VC market that has declined at a time of soaring interest rates and global economic uncertainty. Founders Factory expanded from London to Johannesburg in 2018, from where it plans to design, build and scale 140 disruptive tech startups across Africa. Its African portfolio currently cuts across 55 ventures in 11 countries, covering fintech, foodtech, and healthtech companies, among others. The additional funding affirms its hybrid investment model of combining capital and operational support and will help the early-stage investor further improve this model.
Nigeria’s inflation quickens more than expected
Highlights
- Nigeria’s inflation rate climbed to a fresh 18-year high on surging transport costs and food prices, adding to pressure on the central bank to raise borrowing costs when it meets next month.
- Consumer prices rose an annual 24.1% in July, compared with 22.8% in the prior month, according to the data published by the National Bureau of Statistics.
- The median estimate of seven economists in a Bloomberg survey was 23.6%. Prices rose 2.9% month-on-month.
Source: Bloomberg
Our Takeaway
Inflation in Africa’s biggest economy has been in double-digits since 2016, eroding savings and incomes, and prompting the central bank to hike interest rates to their highest level in nearly two decades. In the boldest reforms seen in years, President Bola Tinubu scrapped a popular but costly petrol subsidy, causing prices to triple, and ended restrictions on foreign exchange trading, which has weakened the naira by more than 40%. The Central Bank of Nigeria has warned that it will take “significant measures” to stop the sharp decline of the naira.
Kenya’s Ed Partners gets $1.5m to fund affordable schools
Highlights
- Kenyan startup Ed Partners has secured US$1.5 million in debt funding from social impact investor Oikocredit to provide affordable financing to private schools.
- Founded in 2018, Ed Partners provides financing options for crucial elements of the education system, including infrastructure, technology, and transport.
- The startup, which raised a $1.9 million funding round in June 2021, plans to use the latest funding to offer more affordable loans to Kenyan private schools.
Source: Disrupt Africa
Our Takeaway
When it comes to education for many in Africa, a continent where the average literacy rate is estimated at 70%, and access to higher education lags behind other parts of the world, a few themes are common; what exists in most countries is poorly equipped classrooms, few high-quality teachers, terrible infrastructure, irrelevant curriculum, and ridiculous student-to-teacher ratios (for example, it’s been as high as 46:1 in Nigeria for the primary level). Lack of funding is often the biggest reason for this, highlighting why Ed Partners’ fundraising is important.
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