Tech founders launch fund aimed at finding Africa’s next ‘unicorns’

Dozens of tech executives together with the founders of Klarna, Skype, Supply Hero and Flutterwave have began a $200m enterprise capital fund aimed toward discovering the subsequent $1bn-plus corporations in Africa.

Niklas Adalberth, co-founder Klarna, informed the Monetary Occasions that Africa was in an identical scenario to Sweden in 2005, the yr the fintech was based, the place it was attainable to get seed capital for start-ups however there was little to no development capital out there to develop them into potential ‘unicorns’ — corporations value greater than $1bn.

The fund, began by the Norrsken Basis arrange by Adalberth, is in the end aiming to boost as much as $2bn by inviting current enterprise capital companies reminiscent of Sequoia to co-invest, and is saying a primary shut of $110m on Monday.

It’s in talks with its potential first investments and has 400 corporations on its radar, largely in South Africa, Kenya and Nigeria.

The Klarna co-founder mentioned that earlier than 2005 start-ups in Sweden have been glad with concentrating on valuations of $10m till Niklas Zennström, one of many backers of the Norrsken22 fund, offered Skype for $2.6bn.

“Why is the start-up system [in Africa] not creating as many unicorns as for example right here in Sweden? It’s as a result of development capital is non-existent . . . We wish to allow the subsequent unicorns to come back out of Africa. If these unicorns could be the identical position mannequin as Zennström was for me, it may be a game-changer,” he added.

Thirty founders of unicorns together with Adalberth, Zennström, Olugbenga Agboola of Nigerian fintech unicorn Flutterwave, Carl Manneh of Minecraft developer Mojang, Jacob de Geer of Zettle, Niklas Östberg of Supply Hero, and Sebastian Knutsson of Sweet Crush-developer King will put in $65m into the brand new fund, which can have places of work in Cape City, Johannesburg, Lagos and Nairobi.

The for-profit fund is taking a look at “the place we discover the most important impression” in addition to the very best monetary returns, and can consider sectors reminiscent of fintech and well being tech the place it’s attainable to leapfrog outdated applied sciences, Adalberth mentioned.

Hans Otterling, associate at enterprise capital agency Northzone, which can also be backing the fund, mentioned: “We wish to present the world how profitable it’s to put money into Africa. In 2005 enterprise capital was nearly non-existent in Sweden, now nearly everyone seems to be right here.”

He added: “This isn’t the white guys coming into Africa. We wish to assist the very best African entrepreneurs . . . We wish to prolong the community that the remainder of the world has entry to, however Africa doesn’t.”

The funding staff might be led by Natalie Kolbe, former world head of personal fairness at Actis in South Africa, her colleague Ngetha Waithaka in Kenya, and Lexi Novitske, co-founder of Acuity Enterprise Companions in Nigeria.

It can have an advisory board that features Nonkululeko Nyembezi, chair of Johannesburg Inventory Alternate; Arnold Ekpe, former chief govt of Ecobank; Phuthuma Nhleko, ex-chief govt of telecoms operator MTN; and Shingai Mutasa, founding father of funding group Masawara.