Carbon—a leading digital financial services company in Nigeria—has set up a $100,000 (₦36.3 million) fund to support African startups.

The fund, tagged Carbon Disrupt Fund, will address the lack of funding and support holding back budding tech entrepreneurs on the continent.

Through the Fund, Carbon will invest up to $10,000 (₦3.6 million) in each startup for 5% equity and give access to its APIs, thereby, allowing investees to leverage Carbon’s growing customer base and innovative technology platform to get to market faster.

Acknowledging that its success is dependent on the growth of the tech ecosystem, Carbon expects the initiative to spark more collaboration and further investment that should drive growth across the ecosystem.

It’s not all altruistic, unfortunately.

Carbon is now accepting applications from companies with operations in Uganda, Kenya, Nigeria, Ghana, Cote d’Ivoire and Egypt. Startups looking to apply for the fund must have a functioning product, post revenue, and be looking to operate in multiple countries.

The fund has a wide investment mandate but the targeted sectors include insurance, health, education and others which have not seen as much investment as the fintech space.

More than 50% of startup funding on the continent in 2019 went to fintech firms, despite the abundance of opportunities that exist in other sectors. Carbon Disrupt fund has been developed to tackle this head on, making it easier for entrepreneurs across all sectors to access funds and the support they need to establish their solutions and achieve their business objectives.

Cabron Disrupt Fund will also provide mentorship, access to Carbon’s customers and payment platform, as well as office space in Carbon’s Lagos offices.

"Common investor wisdom is to stay in your market and dominate," Chijioke Dozie, CEO and co-founder of Carbon, said. "This assumes that you are expanding on your own but we believe that by collaborating and partnering deliberately, Carbon and other tech companies can scale faster and build more enduring platforms.  There are many excellent companies across the continent looking for the kind of scale Nigeria offers and we are excited to partner with them to provide the support and financial investment they need."

We are equally excited to expand beyond Nigeria and Kenya by working with a new generation of innovators across the continent and sharing our experience to tackle common obstacles to growth

Ngozi Dozie, co-founder of Carbon, added that the investing environment for early stage startups has improved in recent years. However, a key issue for most startups that has not been addressed is the cost of customer acquisition.

Dozie said: "A lot of money is spent on acquiring customers, mainly via social media, when a more collaborative approach among tech companies could be more efficient. Our fund will enable this collaboration, allowing others to market to our customer base and vice versa—a win-win for everyone. As the saying goes, 'if you want to go fast, go alone.  If you want to go far, go together'".

Since launching in 2016, Carbon has amassed 2.1 million users. The company disbursed more than $63.7 million in loans in 2019 and processed more than $140 million in transactions.

In December 2019, the company announced its expansion into the Kenyan market, as well as its Carbon for Business platform which provides startups, small- and medium-sized enterprises (SMEs) and FinTechs with access to uncollateralized credit, secure online payments, reliable funds transfer and fast KYC (know your customer) compliance obligations.

Apply for the Disrupt Fund here.