Within the dynamic African tech ecosystem, Nigerian tech entrepreneurs are embracing a new role as venture investors, drawing upon their expertise and assets to propel the growth of the continent’s thriving technology sector. This shift is observable through the rise of specialized investment avenues crafted to bolster African startups across a wide spectrum of industries.
The Honey Badger Fund by Sim Shagaya
Sim Shagaya, the founder and CEO of uLesson, a prominent edtech platform, is poised to join the ranks of Nigerian founders-turned-investors with his latest venture, “The Honey Badger Fund” (HBF). The fund, aimed at African entrepreneurs building technology-driven ventures, marks a significant shift for Shagaya, who previously launched uLesson in 2019 and Miva, an open university, in 2023.
While specific operational details of HBF are yet to be disclosed, Shagaya expressed his eagerness to utilize his expertise to nurture exceptional African businesses through the fund.
Carbon Disrupt Fund by Ngozi and Chijioke Dozie
In 2020, Ngozi Dozie, co-founder of Carbon, introduced the Carbon Disrupt Fund to address funding gaps hindering tech entrepreneurs in Africa. With an investment capacity of up to $10,000 per startup in exchange for a 5% equity stake, the fund offers not only capital but also access to Carbon’s API, mentorship, and office space in Lagos.
Chijioke Dozie, Carbon’s co-founder and CEO, emphasized the fund’s collaborative approach to marketing and customer acquisition, targeting sectors beyond fintech to foster ecosystem-wide growth. Acknowledging the significance of customer acquisition costs for startups, Carbon aims to facilitate collaboration among tech companies to optimize marketing efforts.
Carbon accepts applications from companies operating in Uganda, Kenya, Nigeria, Ghana, Cote d’Ivoire, and Egypt, aiming to support startups in sectors such as insurance, health, education, and others that have received less investment compared to fintech.
Spark.ng and Investzilla by Jason Njoku
Jason Njoku established Spark.ng in 2013, a project with a mission to support and develop aspiring Nigerian tech and internet entrepreneurs. Operating with a $1 million budget, Spark.ng initially focused on providing financial support ranging from $30,000 to $75,000 to tech startups in Nigeria. Notable investments included Insured.com.ng, Hotels.ng, which recently raised $1.2 million in Series A funding and Giddimint.com.ng, among others.
Despite experiencing setbacks with some startups written off, such as Bus.com.ng and Insured.ng, Njoku remains actively involved in the investment scene. His personal portfolio and successful exit with Paystack have bolstered his reputation, leading to the launch of Investzilla, an initiative aimed at unlocking investment opportunities for aspiring investors in early-stage companies.
Jason Njoku, founder of Iroko TV, has also diversified his investment portfolio by launching Investzilla. Targeting individuals with the ambition to invest $3–10,000 annually in early-stage companies, Investzilla offers membership opportunities for backers to participate in multiple deals. Despite a soft launch in January 2021, Investzilla has already attracted 20 initial investors, indicating a promising start.
Investzilla operates with a membership fee of $500, allowing investors to deploy checks ranging from $5,000 to $15,000 in over 10 early-stage companies annually. Njoku’s reputation as an angel investor, coupled with successful exits like Paystack, positions Investzilla as an avenue for aspiring investors to engage in Africa’s burgeoning startup ecosystem.
Future Africa Fund and Future Africa Collective by Iyinoluwa Aboyeji
Iyinoluwa Aboyeji, co-founder of Flutterwave, ventured into the investment realm with the Future Africa Fund. Having deployed two funds, Future Africa adopts a unique approach by transitioning from a traditional VC model to a venture studio for its third fund deployment. Despite challenges in raising institutional investment, Aboyeji remains committed to democratizing access to African startups through initiatives like Future Africa Collective.
Future Africa Fund’s first iteration, Fund I, utilized Aboyeji’s personal capital from his exits with Flutterwave and Andela. It operated as a family office with a consulting arm, investing $1 million in nine startups by the end of 2020. The fund returned $3.7 million to its limited partners, demonstrating early success.
For Fund II, Future Africa opened up to outside capital through a subscription-based collective syndicate, allowing individuals to access the fund’s deal flow and invest accordingly. This transition generated revenue close to $500,000 for the company, further solidifying its position in the African investment landscape.
The Future Africa Collective, launched as a result of Aboyeji’s frustrations with raising institutional investment, aims to close the early-stage funding gap for African startups. By democratizing access to startup investments, the collective seeks to empower individuals passionate about supporting African innovation.
“All the data we were looking at pointed to the fact that work needed to be done to bridge that gap,” Aboyeji said in a recent interview. “We simply couldn’t go on the journey alone to fix the gap and decided to build Future Africa Collective to democratize access to African startups. We think of ourselves as pioneers in this field.”
CcHub Syndicate and Growth Capital Fund by Bosun Tijani
Bosun Tijani, co-founder and CEO of Co-Creation Hub (CcHub), introduced the Growth Capital Fund alongside the CcHub Syndicate. The Growth Capital Fund focuses on supporting high-growth African startups, while the Syndicate serves as a bridge financing mechanism, enabling diaspora Africans to co-invest with CcHub in tech ventures across the continent. The The Growth Capital Fund has invested in notable African startups, including E-tailers, DrugStoc, Edves.
Tijani’s vision extends beyond financial support, aiming to deepen the quality of capital available to local entrepreneurs. By tapping into remittances from Africans in the diaspora, the CcHub Syndicate enhances access to funding for startups, fostering innovation and economic development.
“We see the syndicate as a complementary vehicle to our VC fund as it deploys bridge financing to companies with proven traction seeking to raise funds to meet critical milestones ahead of their next funding cycles,” he said
In essence, these initiatives underscore the evolving role of Nigerian founders as catalysts for innovation and investment in Africa’s tech ecosystem. With each fund and syndicate tailored to address specific challenges and opportunities, they collectively contribute to the continent’s entrepreneurial resilience and growth. As more Nigerian founders pivot into becoming venture investors, the prospects for African startups continue to brighten on the global stage.
