Nigerian fintech startup, Carbon, has announced the launch of a $100,000 Pan-African fund to address the challenge of poor funding affecting tech-driven small businesses in Africa.
According to the digital lender company, Carbon’s Disrupt fund, the first of its kind by an African fintech startup, will invest up to $10,000 per startup (for 5 percent equity) and give access to Carbon’s API, allowing investees to leverage Carbon’s growing customer base and innovative technology platform, to get to market faster. Acknowledging that its success is dependent on the growth of the tech ecosystem, Carbon expects the initiative to spark more collaboration and further investment that should drive growth across the ecosystem.
Carbon is now accepting applications from companies with operations in Uganda, Kenya, Nigeria, Ghana, Cote d’Ivoire and Egypt. Startups looking to apply for the fund must have a functioning product, post revenue and looking to operate in multiple countries. The fund has a wide investment mandate but target sectors include insurance, health, education which have not seen as much investment as the fintech space.
Commenting on the initiative, the CEO and Co-founder of Carbon, Chijioke Dozie, said: “Common investor wisdom is to stay in your market and dominate. This assumes that you are expanding on your own but we believe that by collaborating and partnering deliberately, Carbon and other tech companies can scale faster and build more enduring platforms. There are many excellent companies across the continent looking for the kind of scale Nigeria offers and we are excited to partner with them to provide the support and financial investment they need. We are equally excited to expand beyond Nigeria and Kenya by working with a new generation of innovators across the continent and sharing our experience to tackle common obstacles to growth.”
Since launching in 2016, Carbon has amassed 2.1 million users. The company disbursed more than $63.7 million in loans in 2019 and processed more than $140 million in transactions. However, since 2019, the startup has been expanding its digital financial services to include payments, digital wallet and investments. This drive saw it change its name from Paylater to Carbon.