Investment Company Uncap Announces $33 Million fund to Empower Small and Medium-Sized Enterprises in Africa through Innovative Financial Solutions
Uncap, a venture capital firm, has introduced a significant new fund aimed at fostering the growth of small and medium-sized enterprises (SMEs) across Africa. The fund, named Unconventional Capital, utilizes a unique, non-dilutive, revenue-based financing model to provide necessary support to businesses while allowing them to maintain full operational control.
Established in 2019 and officially launched in 2021, the fund plans to support eligible companies with funding ranging from $22,000 to $112,000. The fund is co-led by Esther Ndeti, Investment Principal, and Franziska Reh, CEO.
Uncap's separation from Level, a standalone SaaS platform designed to streamline investment management for funders and accelerators in Africa, further enhances the ecosystem for SME growth in Africa.
The fund's portfolio includes investments in 87 companies across seven sub-Saharan African countries, spanning eight sectors, including agriculture, education, food & beverages, and media & entertainment. The fund has garnered support from global institutions like the Bill & Melinda Gates Foundation and the Bayer Foundation, although the specific institutions supporting the $33 million fund for promoting SMEs in Africa remain undisclosed.
To qualify for funding, SMEs must be registered limited companies in Kenya, Rwanda, Uganda, or Nigeria. They should have at least two years of operational history and a minimum revenue of $89,000 in the past 12 months. This flexibility is especially valuable for companies navigating the challenges of early-stage growth.
The fund's goal is to transform SME financing by creating a supportive environment for African businesses. It will collaborate with key partners such as O-Farms, a circular agriculture program run by Bopinc, and SAIS, an agritech initiative supported by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ.
This initiative by Uncap represents a significant step towards addressing the financing challenges faced by African SMEs. The fund's unique approach to SME financing in Africa has the potential for significant impact on economic growth and development. By offering a flexible, non-dilutive funding model, the fund aims to empower entrepreneurs to grow their businesses while retaining control. The potential impact of this fund on Africa's SME landscape is immense, with SMEs constituting approximately 90% of businesses on the continent, often in underserved areas.
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