Few weeks ago, French President, Emmanuel Macron unveiled a $76 million funds for African startups at VivaTech 2018. Now, details of how the fund will be distributed have emerged. According to Techcrunch, French Development Agency (AFD) will administer of the le nouveau fonds. Christine Ha, the digital task team leader at AFD, said that the funds would be divided into three parts.
She said that $11.7 million (€10M) would go for technical assistance mainly to support Africa’s ecosystem while €5M will be set aside for loans that will be free of interest to high potential pre-seed startups.
According to her, $58M (€50M) will be used for investments based on the equity in series A to C startups. The technical assistance will be channelled in the form of grants to coding programs, hubs, incubators, and accelerators. Ha added that the pre-seed startup loans will be given information of cash of up to $100K. This will be provided as early funding to give entrepreneurs enough time to prototype, launch, and experiment.
Proparco a development finance institution (DFI) will administer the VC startup funding worth $58M. AFD owns part of the DFI. Generally, the money will come from the balance sheet of Proparco. Furthermore, part of it will go to the investment of VC funds in Africa. Proparco has invested in many focused funds in Africa like Partech Ventures and TLcom Capital. Ha said that the company would possess the equity shares. It will act as a limited partner when investing in VC funds. Startups across Africa can apply for a portion of the $58M through any of Proparco’s offices in Africa. The offices include Johannesburg, Nairobi, Lagos, Douala, and Casablanca.
Ha said that Proparco and AFD are targeting young and innovative startups. These are startups that are in a position to solve various challenges. The challenges include energy, access to financial services, education, health, the creation of jobs, affordable goods and services and are in a position to grow their businesses in Africa. Both the technical assistance and loan portions of the funds will be available at the beginning of 2019. AFD is still working on some options that will help in the implementation of the funds. The possibilities include depending on local actors using Digital Africa platform. The Digital Africa platform will put up a new online site in November this year. The site will be equipped with resources for startup entrepreneurs.
