Investor Updates: FSD Africa invests $3.5m in Catalyst Fund

FSD Africa invests $3.5m in Catalyst Fund

Highlights

• Tech accelerator Catalyst Fund, managed by BFA Global, has received $3.5 million from FSD Africa to anchor the Fund’s presence in Africa, and scale its work as the leading accelerator and pre-seed impact fund for emerging market entrepreneurs.
• With FSD Africa’s backing, Catalyst Fund plans to invest and offer hands-on venture-building support to high-impact startups that improve the resilience of underserved and climate-vulnerable communities.
• The Fund has a goal to support 40 pre-seed impact ventures in Africa with its next cohort of startups expected to feature fintech solutions.

Source: Disrupt Africa

Our Takeaway

Impact investing is taking off in Africa as persistent socio-economic challenges make Africa an obvious place to start for investors seeking to make an impact. Per the Global Impact Investor Network’s 2020 survey, 43% of impact investors have funds allocated to Africa—more than any other emerging market region—and 52% plan to increase their Africa exposure. As of 2020, total assets under management (AUM) among a group of 36 Africa-focused impact funds selected by ImpactAssets jumped to a record $228 billion, from $181 billion in 2019. To date, Catalyst Fund has backed 61 startups across emerging markets that have together raised more than $573 million in follow-on funding and reached over 13.2 million low-income customers.

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Nigerian fintech Bloc acquires payments startup Orchestrate

Highlights

• Nigerian Banking-as-a-Service (BaaS) infrastructure provider Bloc has announced its acquisition of Getwallets, the wallets-as-a-service provider that recently pivoted to become payments company Orchestrate.
• Formed in 2021, Bloc helps any company offer fintech solutions to their customers via a set of building blocks – infrastructure, licenses, compliance, and capital – that allows them to increase their value to their stakeholders, be they customers, investors, or employees.
• The combined cash and equities deal is expected to enable Bloc to focus its core product strategy on delivering BaaS and banking services while Orchestrate leads its fintech infrastructure with its proprietary payments orchestration API.

Source: Disrupt Africa

Our Takeaway

Bloc claims to have processed more than $30 million in the past year through its bill payments API alone and recently launched its SuperAgency tool, which allows licensed companies to offer agency banking services. The acquisition of Orchestrate boosts its capacity to offer fintech infrastructure such as online payments, subscription management, BNPL payment infrastructure, virtual wallets, bill payments, and invoicing in its Fintech-as-a-Service suite of APIs. 

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AfCFTA could boost Africa’s FDI by 9% – World Bank

Highlights

• Reforms set in motion by the implementation of the African Continental Free Trade Area (AfCFTA) could lead to a rise in foreign direct investment (FDI) that would boost incomes on the continent by 9% by 2035, according to a new World Bank report.
• The report builds on the earlier study by adding potential gains arising from greater flows of FDI under two possible scenarios – the “AfCFTA FDI broad scenario” and the “AfCFTA FDI deep scenario”.
• The broad scenario incorporates the expected benefits of increased FDI resulting from the reforms to trade in goods and services. The deep scenario examines the additional gains that could result from expanding the agreement to harmonize policies on investment, competition, e-commerce, and intellectual property rights.

Source: World Bank

Our TakeawayThe AfCFTA is an ambitious project that aims to create a single market of 1.3 billion people across Africa, facilitate the cross-border movement of people, goods and services, and investments, and establish a $3.4 trillion economic bloc, which will be the largest free trade agreement since the founding of the World Trade Organisation. Limited trading under the AfCFTA began in January 2021, but achieving its full potential depends on significant policy reforms and trade facilitation measures across the signatory nations, for which negotiations are still ongoing.