Kenya-based community-led marketplace Pariti, which is building the digital infrastructure for startup ecosystems in emerging markets has raised $2.85 million in seed funding. Harlem Capital, a US-based venture capital firm, led the financing round. The round also saw the participation of other investors such as Better Ventures, Accelerated Ventures, New General Market Partners, Diverse Angels and AVG Basecamp.
Founded in 2019 by Yacob Berhane and Wossen Ayele, Pariti connects founders in emerging markets to resources, talent and capital. Within the short time it has been around, Pariti has been able to make a name for itself. According to CEO Yacob Berhane, in the past year, the company with the help of the pandemic and the increasing spotlight on the African startup scene has grown 795 percent. “The pandemic was a Black Swan event because we saw a major jump in activity on our platform. Remote staffing and remote investing accelerated tremendously. This was a bet we made a while back but obviously could not anticipate what was coming. And after taking nearly ten years to get Africa’s first unicorn, we had six announced in roughly six months. This led to a significant increase of interest from local and international investors for African startups”, he said.
Currently, Pariti has more than 880 companies, all across 42 countries, on its platform. At the beginning of this year, the figure was just 500. These figures, however, are the only ones the company has decided to share; there is no other indicator for growth available.
Speaking about Harlem Capital’s investment in the company, Pariti’s CEO said that “We’re thrilled to be working with Harlem Capital. Their focus on data, process and supporting underserved ecosystems aligns perfectly with our mission and makes them an amazing partner for us to build with”.
Pariti is part of the increasing list of African startups placing the continent in a global spotlight. The African startup ecosystem is “growing at a 46 percent annual rate, which is six times faster than the global average”, according to data from BCG.
Pariti’s major product is its Recommendation Engine. Using this tool, founders submit their companies for review and feedback from experts available on Pariti’s platform. Personalized recommendations on steps to take these companies to the next level are suggested by the engine. Apart from this, Pariti also helps talents to monetize their skills as well as help venture capital firm and angel investors to find and execute deals.
Pariti’s pitch assessment and recommendation engine also has some predictability features where the platform can tell how companies will perform with fundraising, the company’s CEO also mentioned. “So we’ve looked at the companies that have been able to go on and raise money after submitting the Pariti pitch review, and companies that score over 70 on a Pariti score have a 50% likelihood of connecting successfully with investors. But companies that score above 78 have shown correlation to having 8x likelihood of raising capital, which is pretty dramatic”, Yacob Berhane said. Pariti has helped a few founders who have used the platform to get into global accelerator programs such as Techstars and Y Combinator.
According to co-founder and CEO Yacob Berhane, five companies including Kenya’s neobank Fingo, have entered into the Y Combinator accelerator program using Pariti’s platform. Emphasizing the need for Pariti to democratize access to global investors and accelerators, Yacob Berhane said that “If Pariti builds this community of founders, investors and freelancers that have the right mindset to elevate this ecosystem, nobody has to be a gatekeeper. You’re fostering a certain mentality of ‘we will get further together.’ It’s bigger than any one of us”.
The funds will be used to fuel Pariti’s expansion plans, revamp its talent marketplace, support founders, hire new talents, and create tailored solutions for prospective investors.