After about 11 years of investing in startups across the Middle East and North Africa (MENA), Flat6Labs is expanding outside the region with a $95 million Africa Seed Fund to invest in early-stage startups in Sub-Saharan Africa, starting with Kenya, Nigeria, Senegal, Côte d’Ivoire, Ghana and Cameroon.
"With markets across the region maturing a little bit, it makes sense that we start looking at cohesive regions in terms of the average purchasing power, and opportunities — the products that you see being created in these markets are very similar and easy to take from one country to the next," Flat6Labs CIO, Dina El-Shenoufy, said.
Flat6Labs will invest between $150,000 and $400,000, and make follow-on investments of up to $500,000 to ensure continued support for the startups. It invested between $30,000 to $100,000 in previous funds. According to the firm, the fund will focus on fintechs, health tech, logistics, mobility, clean tech, agritech, retail and e-commerce startups.
"We provide the capital, but there’s a huge value in terms of how we work with the company because of how we position ourselves as an institutional co-founder of the company by helping them set up the company, register it and provide access to our networks. We are one of the few players in North Africa that is expanding south in Africa, so this is also something that also adds a lot of value when it comes to our geographic exposure," El-Shenoufy added.
With the Africa Seed Fund (ASF), Flat6Labs will admit 10 to 15 startups every six months in its seed program, with a goal to back over 170 startups in the next five years. The firm claims that the capital from the ASF has the potential to create more than 14,000 jobs, provide support to more than 1,200 founders with 20% female participation, and generate revenue of more than $700 million.
The first investments in the selected startups are planned to be made before the end of 2023.
ASF is funded by Flat6Labs with the support of the GIZ on behalf of the German Government, and through the Egyptian Agricultural Innovation Project (AIP) and Scaling Digital Agricultural Innovations through Startups project (SAIS).
"We are extremely excited about the launch of the Africa Seed Fund. Africa is one of the most exciting regions to invest in tech and innovation, with huge untapped potential and unique business opportunities. We will leverage our experience and knowledge to guide the startup founders to create truly scalable, investment-ready, Africa-based companies," Ramez El-Serafy, General Partner for ASF, said.
Recall that in 2021. he Egypt-based VC firm closed a$13.2 million to support early-stage startups and provide follow-up investment. The firm says it has $100 million in assets under management.