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Crypto-Friendly VC, Microtraction, Closes $15 Million Community Fund to Invest in Early-Stage African Startups

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:

  • Fintech
  • Healthtech
  • Saas
  • Edtech
  • Crypto
  • Gaming
  • Mobility

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SEE ALSO: BitDAO Votes to Fund AfricaDAO with $20 Million to Accelerate Web3 Adoption in Africa

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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+.”

– Microtraction

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.

The application button is right on their landing page.

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RECOMMENDED READING: We Invested in 21 Companies in 2020 Across Multiple Sectors, Including Crypto, Says Nigerian VC Fund, Microtraction

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