Al Mada-backed venture capital aims to attract innovative investors and take part in the exponentially-growing African startup landscape, according to converging news reports.
The new venture capital aims to bank on the significant growth prospects of the African startups business, as it keeps breaking records every year, growing 12-fold over the past five years despite drawing only 1% of funding from global venture capitals.
The venture capital also aims to contribute to the development and emergence of promising technology-oriented startups specializing in future industries, including financial services (fintech), health tech, logistics, education, and renewable energy.
As it plans to operate as a vertical accelerator, the venture capital will target startups having reached a certain level of maturity, helping them access the growth-dependent capital.
In addition to providing direct funding, the Al Mada venture fund will equally offer startup access to the fund’s large network of partners.
“Al Mada is delighted to bring its 100-year experience as a pan-African inverter to young innovative entrepreneurs who are building the Africa of tomorrow,” said the Moroccan company.
“Startups will thus be able to rely on our solid expertise and that of our teams specializing in Venture Capital.”
African startups are continuing to thrive, supported by the exponential growth of fintech startups.
As the most entrepreneurial continent, with 22% of Africa’s working-age population starting businesses, and the region with the largest free-trade area, Africa has the potential to be a tech startup giant.
The continent experiences cumbersome regulations, limited funding and highly fragmented markets are holding startups back.
Africa currently hosts just 0.02% of the global start-up ecosystem value, the global start-up ecosystem is valued at US$3.8 trillion, Africa makes up just US$6.6 billion.
In 2021, African startups raised a total of US$4.65 billion. This year, startups across the continent have raised more than US$1 billion in a record seven weeks, prompting experts to state that the African startup landscape may reach US$7.3 billion at the end of 2022.