Microtraction, an early-stage venture capital firm based in Lagos has secured $15 million for the first close of its community fund to invest in pre-seed stage startups in Africa.
With this fund, Microtraction intends to make first cheque investments into a minimum of 60 African startups. "Up to ~20% of those investments will get the quick top-up in their next round. So far, 20 investments have been made through this community fund," the firm disclosed.
Founded by Yele Bademosi and Kwamena Afful in 2017, with initial backing from PAVE Investments, Michael Seibel, Andy Volk, and Chris Shultz, Microtraction has invested in 36 companies comprising 83 founders across 2 funds in Nigeria, Ghana, Kenya, and Rwanda.
The VC firm has spread its portfolio across fintech, health-tech, SaaS, edtech, crypto, gaming, and mobility. These companies—including 54gene, Cowrywise, Helicarrier, Lemonade Finance, Bitsika, and Raise—have raised over $100m in follow-on funding, currently valued at $760 million combined, and have created 900+ jobs.
Through its debut fund, Microtraction backed 19 companies in 4 countries over 3 years. Of the 19 companies, 14 of them got into global accelerators, 10 are valued at $10m and above, 37% have female co-founders and 18 of them have raised follow-on funding. These companies have a combined valuation of $540m+.
In May, Microtraction reviewed its new standard deal from $15,000 to $100,000 for 7% equity on a post-money SAFE and an option for a quick top-up in their next round of up to $350,000.
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Limited Partners (LPs) of Microtraction's Community Fund
"As a team, we constantly ask ourselves: ‘What do founders need right now? How do we improve our offering to founders? How do we differentiate ourselves from other investors?’. We realized, very quickly, that the difference between founders that are on the right track to building successful businesses and those that are not quite there yet, is access to a rich and valuable community that increases the odds of success," Dayo Koleowo, Partner at Microtraction said.
Microtraction disclosed that the LPs in its latest community fund are made up of over 30 venture-backed founders of African companies including; Helicarrier’s Ire Aderinokun, Paystack’s Shola Akinlade, Cowrywise’s Razaq Ahmed, 54gene’s Francis Osifo, Piggyvest’s Odun Eweniyi Paga’s Jay Alabraba, Spleet’s Tola Adesanmi and Float’s Jesse Ghansah.
Others include General Patners of VC funds like Ribbit Capital’s Micky Malka, Hustle Fund’s Elizabeth Yin, Sebastes Capital’s Jason Fish, a16z’s David Haber, Y Combinator’s Michael Seibel, 776’s Alexis Ohanian, Bonow Ventures’ Tilo Bonow, Precursor Ventures’ Charles Hudson, Better Tomorrow Ventures’ Sheel Mohnot and Broadhaven Ventures’ Michael Sidgmore.