● The new EUR 15m seed fund dedicated to young innovative enterprises in Africa aims to build African start-ups with positive impacts that create value for both the economy and society.
● This assistance and financing mechanism targets early stage digital start-ups, incubators, hubs and accelerators. It is implemented by AFD Group’s local partners and covers 45 African countries, with financial support of up to EUR 300,000.
● This mechanism complements the Digital Africa association platform and is a component of the Choose Africa initiative by which AFD Group has pledged to earmark EUR 2.5bn to African start-ups and SMEs by 2022.
AFD Group has launched a new EUR 15m seed fund to finance and support digital start-ups. These innovative companies, which have real potential for job creation and impacts on development, currently suffer from a lack of financing, especially at the early stages of their development. This seed fund complements the range of services implemented by AFD Group and its partners on the continent to finance and support African start-ups and SMEs. It has been launched on 4 December during Emerging Valley, the hub of emerging innovations between Europe and Africa, which is holding its third edition in Aix-Marseille.
EUR 15m fund dedicated to African digital start-ups
Today, only 20% of African SMEs are eligible for a bank loan and 87% of start-ups do not have access to any financing. The objective of this fund is to help build and develop young innovative enterprises in Africa.
It aims to :
- Improve access to financing for start-ups right from the beginning of their activity;
- Sustainably support the creation of an environment conducive to digital innovation, entrepreneurship and investments by assisting incubators, hubs and accelerators.
This fund will be managed by AFD’s local partners, who are experts in supporting and financing digital technologies.
These “windows” will receive requests from candidates and will select companies that are likely to benefit from the assistance mechanism. The fund is based on six programs:
- Two professionalization, technical assistance and capacity building programs for hubs, incubators and accelerators. This mechanism helps them support innovative entrepreneurship by providing long-term assistance to young innovative enterprises. AFD’s partners for these programs are Bond’Innov and Afrilabs.
- Four financing programs for African digital start-ups. This mechanism combines financial support of up to EUR 300,000 and assistance. AFD’s partners for these programs are the ABAN / AfriLabs consortium, the Greentec Capital Africa Foundation, the association Entrepreneurs & Développement, which relies on the capacities of the Investisseurs & Partenaires Group, and the Mercy Corps Europe / Suguba consortium.
The objective: support African innovation for the benefit of companies that have positive impacts
Offering a financing mechanism tailored to the needs of start-ups allows fledgling entrepreneurs to develop their service and, indirectly, creates an environment conducive to innovation and entrepreneurship in Africa. The seed mechanism will target start-up projects that have a positive impact, in line with the action of Agence Française de Développement, which works for climate action and social cohesion in countries in the South.
“Climate action, sustainable development, social cohesion… This new fund aims to boost the creation of 100% African start-ups, which all have a positive impact on society. Through this support, Agence Française de Développement wishes to accelerate not only economic innovation, but also social and societal innovation. The financing of start-ups will serve African people. There will be tangible benefits on more sustainable cities, improved social cohesion and greater gender equality”, says Bertrand Walckenaer, Associate Chief Executive Officer of Agence Française de Développement.
The provision of this fund complements AFD Group’s range of support and financing for African start-ups and their ecosystem. Since 2016, AFD Group has been actively supporting digital innovation in Africa, via initiatives such as the AFD Digital Challenge start-up competition, the Afric’innov programs, AFIDBA, and the Social and Inclusive Business Camp (SIBC).
This Digital Africa seed fund is a component of the Choose Africa range of services by which AFD Group has pledged to earmark EUR 2.5bn to African start-ups, microenterprises and SMEs by 2022. Some 10,000 African companies are expected to benefit.