Microtraction, a Nigeria-based but Africa focused early-stage venture capital firm, announced a $15 million first close of its second fund, the Microtraction Community Limited for early-stage African startups.
Microtraction was founded by Yele Bademosi and Kwamena Afful in 2017, with initial backing from PAVE Investments, Michael Seibel, Andy Volk, and Chris Shultz.
The firm says that it will write first cheques of $100k for 7% into early-stage African companies across different sectors and regions in Africa with an option for a quick top-up of up to $350k, as long as it is not more than 25% of the company’s next official fundraising round.
Through this second fund, Microtraction says it intends to make a minimum of ~60 first check investments into African startups, and up to ~20% of those investments will get the quick top-up in their next round. So far, 20 investments have been made through this community fund.
Microtraction backed 19 companies in 4 countries over 3 years through its first fund. Of the 19 companies, 14 of them got into global accelerators, 10 are valued at $10m and above, 37% have female co-founders and 18 of them have raised follow-on funding. These companies have a combined valuation of $540m+.
The company also announced that it was venturing into Web3 space by setting up a community vehicle (akin to a DAO) as the first African fund with community tokens for its members, where social tokens will be used to incentivize and gamify the experience of members who will provide value-add and support to the fund & founders. The company says that the DAO will operate on an invite-only basis for now and will be launching with various perks such as exclusive access to events, investment opportunities, industry deep dives, and more.
“As a group, we are never shy of experimenting and creating a blueprint others can build upon. We believe that the African start-up ecosystem is still in its infancy and it’s going to take a community of connected, aligned, and incentivized members to contribute, grow and accelerate its development. As a fund & community, we look forward to continuing to innovate on Africa’s innovation infrastructure alongside our members,”
Yele Bademosi, Founding Partner at Microtraction
Across the two funds, Microtraction has invested in 36 companies comprising 83 founders in Nigeria, Ghana, Kenya, and Rwanda.
These companies in sectors like fintech, health-tech, SaaS, edtech, crypto, gaming, and mobility, have raised a total of $100m+ in follow-on funding, currently valued at $760m+ combined, and have created 900+ jobs. Some of the companies we have backed since their pre-seed stage include 54gene, Cowrywise, Helicarrier, Lemonade Finance, Bitsika, and Raise.
