EchoVC, a Lagos-based venture capital firm, has created EchoVC Chain, an $8 million “pilot” blockchain-focused seed fund with an emphasis on investing in underrepresented founders and underserved markets.
EchoVC, which describes itself as “the Sequoia Capital for underrated creators and markets,” has made around 40 investments in businesses operating in a wide range of industries around the world, including a single investment in the blockchain space in the year 2021.
“At EchoVC, we’ve been fascinated by blockchain technology for the past few years. In a blog post, the company’s Eghosa Omoigui, Tsendai Chagwedera, and Deji Sasegbon expressed their “growing excitement” over the potential uses of blockchain technology and the roles it may play in Africa.
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“Our theory is to use these features to enable fresh leapfrogs or unleash unique market opportunities throughout the continent, and we see blockchain functionality as more of a need than a want in African markets.”
The US$8 million EchoVC Chain pilot seed fund is dedicated to investing in founders and startups outside of EchoVC’s traditional investment focus. Two of blockchain’s features have particularly piqued the company’s interest recently: tokenization and autonomous scaling.
But our view of blockchain’s potential in Africa spans many levels. Our primary concentration is on the skeleton of the fintech industry. This includes stablecoin-based payment and liquidity optimization infrastructure, as well as research into the development of crypto/fintech “primitives” that may be used by other businesses to grow more quickly.
Overlaying this, the second layer will include blockchain features. New decentralized neobanks or other innovative financial products that expand consumers’ access to credit and savings could be powered by DeFi technology in Africa. New Financing Technologies (NFTs) have the potential to “encourage the creative economy for the coming Gen-Z, enable games to provide new means of earning, or even fractionalise real-world assets and portfolios to reduce affordability barriers to investing.”
EchoVC optimism about the future of DAOs
Africa’s offline economic fabric is mostly held together by social collectives and informal markets, both of which serve as examples here. Decentralized Autonomous Organizations (DAOs) have the potential to bring order to the chaos of offline and informal networks for the greater good of those involved.
Those at the bottom of the economic pyramid should benefit from this because it will boost their access to labour and their ability to earn a living wage. Furthermore, the corporation cited social networks, gig networks, and decentralised agent networks as other examples.
Beyond this, we are also investigating the potential convergence of AI/ML and DAOs, as well as other emergent blockchain characteristics, such as digital identity, privacy, decentralised infrastructure edge nodes, and flexible supply chains.”
When it comes to rules and regulations, we keep an eye on what’s happening behind the scenes. We believe that regulation is necessary and will have a beneficial effect by directing innovation, enhancing stability, and reducing frictions between the decentralised and centralised spheres.
“Central bank digital currencies (CBDCs), as the digital version of cash mediated by the banking system excite us greatly because they promise to reduce transaction costs for various financial services, expedite international money transfers, and pave the way for locally-issued currencies that can be programmed.”