Charlie Graham-Brown, Seedstars’ World chief investment officer made the announcement a few days back at the Seedstars Summit which took place in the SwissTech Convention Centre in Lausanne, Switzerland.
“The strategy that we’re developing now and have started working on is to have a fund per region of around $100-million to be able to do deals in Series-A and Series-B,” he said.
Seedstars revealed in a subsequent press release issued later the same day, that the fund will focus on early-stage investments. That is, from $250,000 to $5 million in “the most promising innovative ventures across sectors and countries.”
Graham-Brown also said that they would shortly reveal more details concerning the countries the fund would focus on.
Seedstars promotes, connects, and invests in startups from emerging markets through its exclusive startup competition. Since its inception in 2013, Seedstars has invested in ticket sizes of between $50,000 and $500,000 in 40 companies so far.
According to Seedstars’ CEO and Co-Founder Alisée de Tonnac, the company has set up four of these startups itself through its venture building team in Nigeria that focuses on the FinTech sector.
She equally added that the other two Nigerian companies it built, have since closed down. She said Seedstars shut the loans company because the segment in Nigeria was over-traded and required heavy management of drivers. The insurance company, she said, didn’t follow up with the right partnerships.
In Ivory Coast, Seedstars has also prototyped two other companies, one of which didn’t work out.
De Tonnac equally stated that Seedstars runs an academy program. Here, they train potential employees who can be placed in its portfolio companies. This is to ensure there’s sufficient talent for the startups it builds in Nigeria.
Seedstars building African startups from scratch
The company’s involvement in building companies from scratch rather than investing in local startups has always been a puzzle. In reaction to this, De Tonnac said it was necessary for them to get involved in building companies. This is to help the organization understand the challenges that startups face in Africa.
She, however, said a lack of investment hasn’t proven to be the main challenge in many startups. As a result, it recently lowered investment tickets to $50,000 in the case of its accelerator program.
“A lack of good talent and business support has proven to be more crucial. The decision on which startups to choose as the winners for each of its various categories at the Seedstars Summit is driven by which company would be best to invest in,” she said.
Seedstars’ investments in startups have done a great deal in accelerating startups from emerging economies. This new fund will, no doubt, bolster the fast take off of tech startups in Africa’s fledgling economies.