Earlier in September ABAN, the Pan-African network of Angel Investors and AfriLabs, the largest network of African technology hubs, announced a new funding initiative: Catalyst. With Catalyst we aim to increase the pool of capital available to promising African growth-stage entrepreneurs, de-risk investments for funders, support the start-up ecosystem at-large and increase the visibility of impact to institutional partners.
How does it work?
Catalyst operates as a co-investment fund that will match investments from angel investors into African growth-stage companies:
Funds from Catalyst will be released after startups have received investments from Angel investors that are part of an angel network registered with ABAN.
To be eligible, startups are required to register on the Catalyst platform through hubs that are members of the AfriLabs network.
For each equity investment of a business angel in a start-up, funding will be provided in the form of a grant to the start-up in order to de-risk the investment of the business angel.
Performance of participating startups after receiving investments will be reported and monitored via the Catalyst platform.
“When we signed the MOU with AfriLabs at their Annual Gathering in Dar es Salam in 2018, we were excited about the opportunity for partnership between Angels and Hubs on the continent. Catalyst will facilitate the development of those relationships as the first initiative of what we expect to be a highly valuable and long-lasting collaboration between AfriLabs and ABAN.”
Tomi Davies President of ABAN
Long-term Initiative; Building a Pool of Matching Capital
Catalyst is raising funds from various institutional partners to add to a pool. This pool serves as a matching fund to encourage investmentin viable startups by verified angel investors. The first Catalyst co-investment fund will be available towards the end of 2019 with a funding partner which will be announced soon. Conversations with additional partners are ongoing.
‘‘We have all recognized the need to increase early-stage funding for our African founders. Catalyst not only does that, but it helps to structure the ecosystem, supports collaboration, and provides actionable insights into the early-stage funding landscape, all the while strengthening our hubs and our angel networks. As the first Pan African program of this type, developed by Africans, for Africans, I believe that Catalyst will be a real game-changer’’.