Nigerian venture capitalist Microtraction raises $15m to fund at least 60 start-ups in Africa

Nigerian venture capitalist Microtraction raises $15m to fund at least 60 start-ups in Africa



(Ecofin Agency) – After its first investment fund, Microtraction is launching a second multi-sector vehicle which will no longer focus on four countries like the first, but will invest across the whole of Africa, targeting start-ups in phase pre-boot.

Microtraction, a Nigerian venture capital firm that invests in pre-seed and early-stage technology companies, recently announced a $15 million first closing of its second investment fund, Microtraction Community Limited.

This vehicle aims to make at least 60 investments in start-ups on the African continent. Approximately 20% of targeted companies will receive follow-on funding in their next fundraising rounds.

“In five years of existence, we have witnessed and contributed to the growth of the African technology ecosystem. We partner with some of the most innovative entrepreneurs to solve some of the continent’s most pressing challenges […] We have consistently invested in businesses on the continent and will continue to do so, despite market conditions,” said Kwamena Afful, one of the co-founders of Microtraction.

According to the company launched in 2017, this first closing of its second fund comes in a context marked by the “market downturn and influx of foreign investment into early-stage African start-ups”. Despite this, the venture capitalist still aims “to be the most accessible source of pre-seed funding for African tech entrepreneurs”.

Through its first investment fund, the firm claims to have supported in 3 years, 19 companies domiciled in 4 African countries (Nigeria, Kenya, Ghana and Rwanda). These 19 companies have a combined valuation of over $540 million. 14 of them have entered global accelerators, 10 are valued at $10 million and above, and 18 companies have raised follow-on funding.

the Microtraction’s second investment vehicle commits up to $100,000 against 7% equity stake, in early-stage African companies operating in different sectors and regions of the continent. To date, Microtraction Community Limited has already made about twenty investments in Africa.

In a review published last January, the firm indicated that in 2021, its portfolio companies raised more than $56 million compared to more than $23 million in 2020. The operation brought in more than $89 million, the total funds raised by the companies in its portfolio up to January 2022. The combined valuation of these reached more than $653 million, according to the Nigerian company.

Chamberline Moko


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