The funding need of startups have improved over the years and Africa now stands boldly among other regions. In fact, so far this year, the continent has remained the strongest-performing region despite the funding decline that startups across the globe are plagued with. Although funding in Africa has improved over the years, there is still much room for improvement and a whole lot of financing can help startups meet their financial and technological goals, social capital needs, etc., especially marginalized groups like women founders and startups existing in areas other than the Big Four.
To fill these gaps, US-based venture capital firm Flourish Ventures has launched a new program called Madica which will invest in the pre-seed stages of African startups. It is a pan-African investment program that’ll provide funding, technological support, and mentorship to founders of viable startups across Africa. It is targeting pre-seed stages because these stages are where startups tend to fail the most.
Currently, the program has reserved $6 million which it plans to invest in about 30 African startups. Each startup is entitled to up to $200,000 in exchange for equity, and the initial investment phase will go on for three years.
According to Madica’s head, Emmanuel Adegboye, “Although investment is booming on the continent, funds are often disproportionately targeted at a few well-networked entrepreneurs and skewed towards the more prominent tech hubs… Madica is sector-agnostic and intends to double down on providing hands-on support, extensive resources, access to networks, and more. This is why in addition to $6 million of investment capital, we have reserved an equal amount for programmatic support. 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.”
The program is big on reaching underserved markets in Africa outside of the Big Four – Nigeria, South Africa, Egypt, and Kenya – where most investments go to. Madica is, therefore pushing for a pan-African reach that’ll support underrepresented markets and support local and women founders.
Founders need to be working on their idea full-time, have a minimum viable product, and should have received little or no institutional funding, to qualify for the program, and application and admission to the program will be on a rolling basis.
Madica will also be partnering with AfriLabs, Pariti, Africa Early Stage Investor Summit, CELO foundation, and Rising Tide to identify entrepreneurs to support. The participating African founders will be matched with mentors such as Isis Nyong’o, the Asphalt & Ink partner; Ceviant Finance co-founder, Idris Saliu, and Wendy Hoffman, the Capital Legal Counsel at The Delta.
“Madica is an investment in the African venture ecosystem, with the audacious goal of creating a broader systemic shift. 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 eventually benefit other participants in the ecosystem – startups, investors, and policymakers. We hope that Madica can help change the narrative around African startups – lower the perception of risk, attract more capital, inspire more founders, and garner more media attention.” Ameya Upadhyay, venture partner at Flourish Ventures said.
Flourish Ventures which is an early-stage fintech VC has invested in startups like Flutterwave and Paga.