Microtraction, an early-stage venture capital firm that invests in African tech entrepreneurs at the pre-seed stage, has announced a $15M first close to its second fund.
The VC, known for investing in blockchain and crypto-focussed startups, pointed out that the raise comes in light of the market downturn and expected slow down of an inflow of foreign investment into early-stage African startups.
Microtraction was founded in 2017 by Yele Bademosi and Kwamena Afful nad has so far invested in 36 companies with 83 founders via 2 funds. Microtraction portfolio companies are in Kenya, Nigeria, and Rwanda and span the following sectors:
The Microtraction portfolio, which includes Cowrywise, Lemonade Finance and Raise, among others, in total has:
Raised a total of $100m+ in follow-on funding
Currently, portfolio companies valued at $760m+ combined
Portfolio companies have created 900+ jobs
“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+.”
You can see some of the stars on the performance of the debut fund here:
Microtraction’s portfolio companies in the blockchain and crypto space includes:
Based on the fund’s learnings, Microtraction is transforming its second fund into a community fund.
According to Dayo Koleowo, Partner, Microtraction:
“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.”
– Partner, Microtraction
The new fund, therefore, includes partners from over 30 venture-backed founders of African companies, including:
Shola Akinlade – Paystack
Michael Seibel – Y Combinator’s
Alexis Ohanian – 776’s
David Haber – a16z
Sheel Mohnot – BTV
The full list of funding partners can be found here.
The fund will write first-time cheques of $100k for 7% into early-stage African companies across different sectors and regions in Africa. There will also be an option for a quick top-up of up to $350k, ‘as long as we are not more than 25% of the company’s next official fundraising round.’
Microtraction intends to make 60 first-time investments into African startups, and at least 20% of these investments will get the quick top-up in their next round.