Investors update: IFC invests $225m in startups across Africa

IFC to invest $225m in startups across Africa and others

Highlights

• The International Finance Corporation (IFC) has launched a $225 million platform to back early-stage startups in Africa, the Middle East, Central Asia, and Pakistan.
• The IFC will through the platform make equity and “equity-like” investments in tech startups to “grow them into scalable ventures that can attract mainstream equity and debt financing.”
• The institution will also use the sector-agnostic platform to work closely with other members of the World Bank to champion regulatory reforms, sector analyses, and other changes that can grow the venture capital ecosystems in these regions.

Source: TechCrunch

Our Takeaway

The new platform adds to IFC’s Startup Catalyst Program, which is also part of its investments and efforts to tap tech ecosystems in Africa and other emerging and frontier markets. Like Africa, most of these regions get a small portion of the global venture funding. The IFC intervention should help bridge this gap, and it couldn’t have come at a better time given the ongoing funding slowdown. 

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Modus launches $75m Africa-focused AI & Blockchain fund

Highlights

• US-based and MENA-focused VC firm Modus has launched a $75 million Modus Africa VC fund to invest in African startups.
• The fund is sector agnostic but will focus primarily on investing in early-stage startups powered by AI and blockchain solutions. 
• Modus Africa plans to nurture the growth and development of the continent’s local tech talent and early-stage impact-driven ventures. The new fund will close in Q1 2023 and will invest in 45 startups at the seed+ stage with a follow-on investment allocation.

Source: Wamda

Our Takeaway

In Africa, the emerging blockchain technology is being used in many innovative ways and in essential industries from tech, agriculture, mining, and remittances to inclusion, identity, and property, to name a few. Yet, the continent has only a 0.5% share of global blockchain venture funding, which stands at $25.2 billion. Last year, African blockchain funding was estimated at $127 million, similar in size to a single blockchain ‘mega-deal’ of which there were 59 globally, indicating a massive gap in funding. This underlines the importance of the Modus Africa VC fund.

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BasiGo secures $6.6m to kick off EV assembly in Kenya

Highlights

• BasiGo will begin assembling electric buses in Kenya next month, ramping up its production of public transport vehicles (PSVs).
• The startup plans to deliver 15 of 100 buses, manufactured using parts from China’s EV maker BYD Automotive, in January next year, having completed its six months pilot program in Nairobi. It also plans to expand its charging infrastructure network, with an initial focus on Nairobi.
• The plans come after a new $6.6 million round co-led by Novastar, Mobility54, and Trucks.vc. This brings the total amount raised by BasiGo since its launch last year to $10.9 million.

Source: TechCrunch

Our Takeaway

The acceptance of electric vehicles is gaining momentum. In 2020, there were more than 11 million registered EVs globally, and the number is expected to hit 145 million by 2030. Things are going at a much slower pace in Africa, however. In Kenya, EV adoption is currently at 5% of the total vehicles and for the most part, are private vehicles. But the latest developments suggest that might change soon, with the recent launch of the new Bus Rapid Transit (BRT) network in Nairobi to be traversed only by green vehicles and initiatives by EV startups like Opibus and BasiGo.