Major setbacks experienced by startup founders in sub-Saharan Africa are identified to be an inability to secure adequate funding and support, especially startups with a great potential to break into the market system.
In a bid to contribute towards mitigating these challenges, Flourish Ventures, a global venture capital firm investing in mission-driven fintech entrepreneurs, offers a solution with the launch of affiliate Madica, a structured investment program for pre-seed-stage technology companies in Africa.
The new sector-agnostic program targets to invest capital in tech startups and offer founders tailored mentorship and world-class company-building support, with the aim of solutions for mission-driven and under-represented founders. Madica plans to provide up to $200,000 in funding to 25 to 30 African entrepreneurs, in the next three years, in addition to providing multi-year programming support.
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Madica plans to double down on support to be offered
As a means of fostering a stronger feeling of community across the ecosystem as a whole, Madica plans to donate a portion of its future financial gains to the cause. Through the incorporation of these novel elements into an investment program, Madica seeks to encourage the development of a more robust and fair financial ecosystem on the continent.
According to Emmanuel Adegboye, Head of Madica, “while investment is increasing throughout the continent, funds are frequently disproportionately targeted at a few well-networked entrepreneurs and skewed toward the more prominent tech hubs.”
“Unlike other programs, Madica is sector-agnostic and intends to double down on providing hands-on support, extensive resources, access to networks and more. This is why we have reserved an equal amount for programmatic support in addition to $6M of investment capital. We encourage founders across the continent to apply for our program. We believe Africans have an unmatched entrepreneurial spirit, and one of Madica’s core goals is to ensure a level playing field for every African founder,” he added.
Ameya Upadhyay, Flourish Ventures Entrepreneurial Partner, said, “Madica is an investment in the African venture ecosystem, with the bold ambition of creating a broader systemic revolution. Through Madica, we intend to develop a cadre of mentors, create world-class programming, crowd-in follow-on capital and leverage Flourish’s global presence to extend the reach of local networks. These will ultimately help other ecosystem participants such as startups, investors, and policymakers.”
Upadhyay added, “We hope that Madica can help change the narrative surrounding African startups by reducing the perception of risk, attracting more financing, inspiring more entrepreneurs, and garnering more media attention.”
Requirements for the program
To be eligible for the program, mission-driven start-ups must:
- Have a minimum viable product (MVP)
- Have founder(s) who are engaged full time
- Have received little or no institutional funding
Founders of Madica do not need introductions to apply; the company runs on an open application basis. To find and help promising startups, the program will collaborate with other organizations, including incubators, accelerators, and angel investors. Investments will be made on a rolling basis throughout the year, and all candidates will go through the same screening process. The application period has opened, and startups interested in learning more or applying may do so by visiting Madica’s website.
On October 26-28, 2022, Madica will be in Lusaka, Zambia, for the AfriLabs Annual Gathering 2022 to meet entrepreneurs, network with the African tech community, and discuss the specifics of their groundbreaking program.
What to know about Madica
Madica, an abbreviation for “Made In Africa,” is a continent-wide initiative that embraces innovators from all around Africa, not just those in the major tech areas of Nigeria, Kenya, Egypt, and South Africa. In addition, Madica aims to offer preference to companies with local founders and women and a focus on frontier areas to fill in the financing shortfalls on the African continent.
Several systemic challenges faced by early-stage founders in Africa are aimed to be addressed with the new investment program, such as limited access to capital, industry networks, mentorship, and structured training. A central element of the program will be a carefully curated panel of seasoned African operators who will mentor Madica founders. Madica will provide this mentor community rewards based on business performance on the premise that excellent mentoring is a key component of the most thriving startup ecosystems.
In terms of transaction volume (down 44%) and dollar volume (down 28%), CEOs with African educations lag well behind their peers with foreign education. The odds of success for a startup with a female CEO are far lower than those of a startup managed by a man, for instance, in 2021, 93% of financing in Africa went to the latter.