StarkWare, a prominent Israeli blockchain infrastructure company with a valuation of $8 billion, has announced the launch of a $4 million fund aimed at investing in pre-seed and seed-stage startups across Africa. This initiative comes at a time when the continent is witnessing a significant increase in blockchain adoption, presenting a unique opportunity for innovation and growth in the sector.
Founded in 2018 by a team including Eli Ben-Sasson, Uri Kolodny, Michael Riabzev, and Alessandro Chiesa, StarkWare specializes in developing zero-knowledge proof systems designed to tackle scalability challenges within blockchain networks such as Ethereum. The company’s flagship products include StarkEx, a scaling engine launched in June 2020 that aggregates multiple transactions into a single proof for enhanced cost and energy efficiency, and StarkNet, a decentralized Layer 2 network introduced in June 2021 that facilitates the creation of scalable decentralized applications (dApps) with reduced transaction fees.
The newly established Africa-focused fund will offer grants of up to $150,000 to early-stage startups, with the potential for larger investments for projects that are built on StarkNet, StarkWare’s proprietary decentralized application platform that operates on the Ethereum blockchain. The fund is strategically targeting high-potential startups located in West, South, and East Africa. It seeks to support teams that not only possess strong technical expertise but also have a deep understanding of local business dynamics, enabling them to develop scalable blockchain solutions tailored to the unique challenges of the region.
Kheireddine Kamal, the Head of Africa Ventures at StarkWare, emphasized the fund’s focus on projects situated in African nations grappling with economic challenges such as high inflation, unstable exchange rates, and low levels of financial inclusion. He noted that the fund is particularly interested in areas where there is a local population eager to engage with blockchain technology.
In addition to financial support, selected startups will benefit from mentorship opportunities and may qualify for further investments from StarkWare, potentially reaching up to $500,000. For exceptional projects, there is even the possibility of securing larger amounts. By investing in decentralized applications (dApps) built on StarkNet, StarkWare aims to empower African businesses to circumvent traditional financial systems, leveraging the scalability and cost-efficiency that blockchain technology offers.
Africa’s youthful demographic, projected to reach 2.5 billion by 2050, coupled with a rapid increase in cryptocurrency adoption, positions the continent as a burgeoning global digital powerhouse. With an estimated $6.7 trillion in consumer and business spending anticipated by 2030, the momentum for blockchain adoption is accelerating.
Eli Ben-Sasson, CEO and co-founder of StarkWare, remarked on the transformative potential of blockchain for various regions in Africa. He stated, “Blockchain presents a unique opportunity for many parts of Africa to leapfrog outdated infrastructures and democratize access to financial tools with more decentralization and transparency.”
Kheireddine Kamal further elaborated on the significance of StarkNet, stating;
StarkNet is a particularly interesting path to blockchain, as it is currently a Layer 2 solution over Ethereum and plans to extend its operations to Bitcoin as well. This dual approach can be highly beneficial for Africa, as it implies that the ‘scaling squared’ strategy also translates to a ‘liquidity squared’ strategy.
This perspective underscores StarkWare’s commitment to fostering innovation and growth in the African blockchain ecosystem.
