Transactions were completed in 10 nations in the last year by the co-investment fund Catalytic Africa, which was founded in 2019 by the African Business Angels Network (ABAN) and AfriLabs.
The collaboration between AfriLabs, a pan-African network of technology and innovation hubs, and ABAN aim to strengthen the startup ecosystem, raise the visibility of impact to institutional funders, and increase the pool of money accessible to prospective African growth-stage entrepreneurs.
It established Catalytic, a co-investment fund that would combine institutional money with investments made by accredited angel investors. The Digital Africa fund and Agence Francaise de Developpement (AFD) both support the effort.
After a successful trial, the fund began full operations in October of last year. Since then, it has partnered with angel investors to co-invest around US $500,000 into firms in ten nations, including Cameroon, Botswana, Nigeria, Tunisia, Kenya, and South Africa. These show a 60% acceptance rate for applications to the Catalytic Africa Matching Fund.
“There are three parties to every transaction on Catalytic Africa because we believe the only way to foster an inclusive ecosystem growth is by attending to the needs of all its stakeholders – the startup to further its growth and expansion; the innovation hub to support the startup along their development journey, and the angel network to provide mentorship and guidance to the startup. It is with this philosophy we built the Catalytic Africa model to be encompassing,” said Fadilah Tchoumba, ABAN secretary general.
“Seeing Catalytic Africa become a reality has only strengthened our suspicion that de-risking angel investors’ investment into innovative African startups can have a positive impact on millions of people. Being able to provide the matching funding unlocks potential and gives entrepreneurs some breathing space.”