In a bold move to support the next generation of African small and medium-sized enterprises (SMEs), Uncap has launched “Unconventional Capital,” a €30 million fund aimed at offering non-dilutive, revenue-based financing. The new fund, announced today, marks a significant expansion of Uncap’s mission to foster economic development in critical sectors such as agriculture, trade and logistics, climate resilience, and financial inclusion. This initiative is set to address a persistent challenge: access to capital for early-stage businesses across Africa.
The creation of Unconventional Capital comes as many African SMEs struggle to secure financing that does not dilute their ownership or weigh them down with high-interest debt. By offering revenue-based financing, where repayments are tied to the company’s income rather than fixed terms, Uncap is setting a precedent for more flexible, founder-friendly funding models. This strategy is particularly suited to the high-risk, high-potential landscape of African entrepreneurship, where SMEs often require growth capital without the traditional constraints of equity investment or debt.
Uncap is not working alone. The fund has partnered with key players such as the “Scaling Agricultural Innovations for Smallholder Farmers” (SAIS) initiative, funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ). Additionally, the circular agriculture program O-Farms, run by Bopinc and backed by the IKEA Foundation, will collaborate to enhance the fund’s impact in the agriculture sector, a crucial area for economic and social stability in Africa.
These collaborations are not just symbolic; they represent a deepening of Uncap’s strategy to leverage the expertise and networks of established organizations that are well-versed in tackling complex challenges in high-impact sectors. By aligning itself with organizations like GIZ and O-Farms, Uncap hopes to accelerate its support to SMEs at the intersection of technology, agriculture, and climate resilience, among others.
High-Profile Backers
Adding credibility and momentum to the initiative, Unconventional Capital has garnered initial support from global institutions such as the Bill & Melinda Gates Foundation and the Bayer Foundation. The involvement of these well-known backers underscores confidence in the fund’s mission and innovative financing model. Their participation also highlights the growing interest of international players in supporting Africa’s burgeoning SME sector, which is increasingly seen as a crucial driver of sustainable development on the continent.
A Strategic Shift for Uncap
The launch of Unconventional Capital also signals a strategic shift within Uncap. The fund will operate independently from Uncap’s proprietary technology platform, “Level,” a recently launched SaaS tool designed to streamline investment management for funders and accelerators across Africa. While the two arms of the business will continue to collaborate, this separation allows Uncap to scale its financing operations while ensuring that its tech platform remains focused on delivering digital solutions for the broader investment ecosystem.
Uncap CEO Franziska Reh and Investment Principal Esther Ndeti will co-lead Unconventional Capital as Managing Partners. Both bring a wealth of experience and insight into Africa’s unique investment landscape. Under their leadership, the fund aims to fill critical capital gaps for early-stage businesses, offering them the financial flexibility needed to scale without losing ownership or compromising their long-term growth potential.
Reflecting on the significance of this new venture, Esther Ndeti remarked, “Launching Unconventional Capital is a pivotal moment for us, and I’m honored to step into the role of Managing Partner. Over the past three years, we’ve championed innovative, alternative financing for businesses across Africa. This fund will address capital gaps for early-stage SMEs as they scale, deepening our impact.”
Ndeti’s optimism is rooted in the tangible successes Uncap has already achieved. Since its inception in 2019 and official launch in 2021, Uncap has invested in numerous early-stage SMEs across sub-Saharan Africa, pioneering alternative financing methods that have resonated with the unique challenges faced by African entrepreneurs. “As we launch the fund, we’re not just aiming to support more businesses but to set new standards in the industry for innovation and inclusion,” Ndeti added.
The €30 million Unconventional Capital fund is expected to be a critical lever in Uncap’s broader strategy to empower African SMEs. With the backing of influential partners and its deep expertise in revenue-based financing, Uncap is poised to play a leading role in shaping the future of entrepreneurship on the continent. As it continues to expand its portfolio, the company’s focus on sectors like agriculture and climate resilience speaks to its commitment to fostering sustainable growth, creating jobs, and driving economic inclusion.
In an era where African SMEs are increasingly seen as the backbone of the continent’s economy, the launch of Unconventional Capital is a timely and strategic initiative. By offering more accessible, flexible financing options, Uncap is not only supporting individual businesses but contributing to the broader narrative of Africa’s economic transformation.