Cairo-based venture capital company Flat6Labs launched a $95 million seed fund to boost early stage technology start-ups in Africa.
Headquartered in Egypt, the Africa Seed Fund (ASF) will focus on three main investment territories: North Africa, West Africa and East Africa, Flat6Labs said in a statement on Tuesday.
Through the new fund, Flat6Labs aims to extend its reach into several new countries including Nigeria, Ghana, Kenya, Morocco and Senegal.
“Africa is one of the most exciting regions to invest in tech and innovation, with huge untapped potential and unique business opportunities,” said Ramez El Serafy, general partner at ASF.
“We will leverage our experience and knowledge to guide the start-up founders to create truly scalable, investment-ready, Africa-based companies.”
The fund will invest in more than 160 early stage tech start-ups over the next five years. It will focus on sectors that accelerate digital inclusion and industries that contribute to addressing social and environmental challenges, such as HealthTech, FinTech, EdTech, GreenTech, AgriTech and ClimateTech.
The African tech ecosystem is booming, with funding for the sector increasing to $6.5 billion last year, up from $6 billion in 2021, according to the Partech 2022 Africa venture capital report.
The new fund aims to be a “catalyst for driving long-term positive change that the youth of Africa really deserve, and to providing resources to the brightest of them, while accelerating the future of the African continent”, said Dina Al Shenoufy, general partner at ASF.
“The programme is designed to provide entrepreneurs with the resources that they need to be able to grow and to scale up their businesses to new heights.”
Africa is one of the most exciting regions to invest in tech and innovation, with huge untapped potential and unique business opportunities
Ramez El Serafy,
general partner at Africa Seed Fund
With ASF, Flat6Labs will be investing in companies that are in pre-seed up to pre-series A stage, with tickets ranging from $150,000 to $500,000 through the Africa seed programme.
The programme offers portfolio companies with seed funding, regional business support and access to a regional network of mentors. Two cohorts will run annually, with an average of 10 to 15 start-ups per cohort. The first investments in the selected start-ups are planned before the end of 2023.
Since its launch in 2011, Flat6Labs has been a key player in building and reshaping the entrepreneurial scene in the region.
It has invested more than $16 million in start-ups, and has raised more than $191 million in follow-on funding while creating more than 2,500 direct jobs and 80,000 indirect jobs through its first two funds in Egypt and Tunisia.
Last month, Flat6Labs announced the first close of the Start-up Seed Fund in Saudi Arabia, which is aimed at supporting entrepreneurs in the kingdom. The 75 million-Saudi riyal ($20 million) fund was created to invest in early-stage start-ups operating in the technology and innovation sectors in the kingdom.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Third practice: Saturday, 7-8am
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Indoor cricket in a nutshell
Indoor Cricket World Cup - Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
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- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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