Five African tech startups have each raised US$25,000 in funding from The Baobab Network’s accelerator, which provides a platform for scaling and securing further investment.
Since launching in 2016, the The Baobab Network has worked with dozens of startups from across the continent, and it has now announced the first five African tech companies to join its 2019 accelerator.
They are Ethiopian ed-tech startup Beblocky, Zimbabwean AI-based health platform Dr Cadx, Kenyan insurtech startup Kakbima, Nigerian payments platform Gladepay, and Ghanaian digital bank Pennysmart.
Each startup has secured US$25,000 in funding in return for a 10 per cent equity stake, as well as access to a tailor-made accelerator programme. The Baobab Network sends its ventures team to each company’s home city for a weeklong sprint prior to unlocking the funds, and then assigns a venture partner for a period of 24 months to help each startup speed its growth and become market and investor ready.
Founders also gain access to an investor network of over 100 venture capital and impact funds, while a network of global partners are on hand to offer their assistance and explore early commercial partnerships, such as Amazon Web Services, Accenture and Standard Chartered Ventures. Companies will be helped through a seed round within 12 months.
Baobab co-founder Tom Fairburn told Disrupt Africa the accelerator, which accepts startups on a rolling basis, had received over 600 applicants from startups in more than 25 African countries so far this year.
“We hope to do three more deals this year, and support a further 20 companies in 2020,” he said. “The big vision is to have 100 companies in our portfolio by 2023.”
The Baobab Network focuses on early-stage startups using tech to solve big market problems.
“We are usually the first money into a business, specialising in pre-seed companies that have shown our team potential for huge scale,” said Fairburn.
Although sector-agnostic, the focus traditionally has been on fast-growing sectors such as e-health, ed-tech and fintech. Fairburn said The Baobab Network works exclusively with local founders who are building businesses in markets where they are experts.
Funding comes from a mixture of revenue from its data business Baobab Insights and equity funding the company has received over the last three years, which totals over US$1.2 million.
“We are currently fundraising to further increase our support for tech entrepreneurs in Africa,” Fairburn said.
