EchoVC announces close and launch of $2.5M Pre-Seed Climate, Energy & Sustainability Pilot Fund, Eco Pilot Fund I

EchoVC, a seed and early-stage technology venture capital firm focused on investing in underrepresented founders and underserved markets, is thrilled to announce a significant milestone in our journey towards fostering innovation in Africa and supporting ground-breaking ideas, products, solutions, and platforms. Today, we are proud to introduce our latest pre-seed fund vehicle – EchoVC Eco [/iː.koʊ-/] Pilot Fund I.

Fuelling Impact, Innovation & Sustainability with Technology:
As a venture capital fund dedicated to unapologetically investing in underrepresented founders and underserved markets, EchoVC is excited to launch EchoVC Eco Pilot Fund I - a $2.5m ‘pilot’ fund in partnership with Shell Foundation with co-funding through UK Aid from the UK Government.

This new fund vehicle represents our commitment to identifying and investing in the most promising pre-seed startups shaping the future of climate, energy, agriculture and mobility. Through our fund, we seek to foster very-early-stage enterprise development and innovation with solutions that enable an income uplift for all the participants along the journey.

Why Eco Fund I?

In keeping with our mission to close the funding gap for underrepresented founders and startups targeting underserved markets, we invested in sector-sensitive companies targeting climate, agriculture, energy and transportation over the last 6 years. Backing incredible founders such as Sara Menker at Gro Holdings, Bim Adisa at Beacon Power Services, Dami Olokesusi at Shuttlers.NG, Desmond Koney at Complete Farmer and June Odongo at Senga, we got a first row look into the journey of these mission-fuelled founders.

Following this, we then spent over a year deep diving to understand where funding flows to, and how it affects, African entrepreneurs within these sectors. Despite marked interest (growing year on year) in harnessing the business potential on the African continent, the distribution of funding to entrepreneurs remains uneven. A sample taken from venture financing deals occurring in Africa between 2017-2021 showed that [Black] Africans accounted for 28% of CEOs and 31% of executive teams of the startups winning financing deals. For the subset of energy, mobility, and agriculture-related firms, the equivalent distribution is 21% of CEOs and 36% of executive teams. That is why as an emerging solution, our Eco Pilot Fund I is targeted at African companies and African founders in Sub Saharan Africa.

As stated by Taiwo Kamson, Principal at EchoVC, “Our Eco Pilot Fund I is not just any fund but a strategic first step initiative designed to address the funding gap in specific impact focused sectors and the respective value chains. We believe that by focusing on these areas, we can make a lasting impact on the growth and development of innovative solutions around agriculture, climate, and energy.”

“Africa’s golden age of entrepreneurship, job creation and household lift will demand that mission-driven founders be backed by high-risk capital. Africa’s needs, while diverse, will not be solved only by investments in fintech,” said Eghosa Omoigui, Managing Partner, EchoVC.

“The objective of our eco pilot fund will be to back founders with first institutional checks and assist them in syndicating financing rounds to support their mission. As a pilot fund, we want to sponsor a pipeline of high quality founders that create high quality companies that can be supported later by the increasing number of climate and energy focused funds. We anticipate that our learnings from this vehicle will feed into our investments to be made from our larger 2024 Eco Fund,” Eghosa Omoigui stated.

“Our approach in coming to market with a relatively tiny pilot fund was to work out the kinks of backing founders in sectors that have historically been underfunded,” said Tsendai Chagwedera, Partner at EchoVC. “As one of the most experienced VC funds on the continent, we have constantly sought to develop innovative ways of financing startups that can create long-term positive financial and high-impact returns in a relatively immature venture capital market, and in today’s risk-off market, entrepreneurs benefit from investors that are ready, willing and able to initialize and maintain financing and company building support,” Omoigui continued.

Taiwo Kamson noted further that “As we see more mid-sized and large funds coming to market to back climate and energy startups, we have struggled to find any that are set up to take first money risk or do the company-building work required to help kickstart the companies that will later be candidates for investment by these funds. The continent needs these pre-seed stage companies to create and deploy the solutions necessary to meet market demand and enable climate-resilient economies.”

Key Features of Eco Pilot Fund I:

Our Eco Pilot Fund I will be focused on making up to ten pre-seed investments in founders and startups that span our specific areas of interest, as set out below.

The Fund will invest broadly in companies led by Africans in Sub Saharan Africa including a specific focus on companies in Nigeria and Kenya delivering particular solutions.

Initial Focus Impact Areas:

1.     Access to resources – New technologies focusing on energy provision or use for agriculture (energy for agriculture).

2.     Access to finance and insurance – Support intermediaries that can use digital technologies to unlock finance for farmers and mitigate their risks.

3.     Knowledge/Capacity Building - Focus on low-cost solutions to provide better market information and training for farming practices.

4.     Access to markets - Creating value chains connecting small holder farmers to larger supply chains thus increasing value to farmers.

Other areas of interest include, but not limited to, innovations in energy storage, cooling, and off-grid cooking, smart energy systems and mini-grids, affordable and reliable access to renewable energy, and new approaches to urban transportation including alt-powered two and three wheelers.

The Impact We Aim to Make:

Our goal is to contribute to the growth and success of the most innovative and promising ventures in the outlined impact areas and create jobs and uplift in income as well as expand the reach in customers served. We envision a future where ground-breaking ideas are not only funded but also nurtured to reach their full potential.

Join Us on this Journey:

We welcome visionary entrepreneurs & forward-thinking innovative founders in Africa to connect with us and, together, shape the future and unlock new climate-resilient possibilities.

The EchoVC team is incredibly grateful to our investors who have partnered with us and our founders on this exciting journey.

We look forward to making a lasting impact with EchoVC Eco Pilot Fund I and its successor funds.

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About EchoVC: EchoVC is a Black-led technology-focused seed and early-stage venture capital firm investing in underrepresented founders and underserved markets. With a mission to be the Sequoia Capital for underestimated founders and markets, the firm invests from offices in Lagos, Nairobi, New York and London, and currently has a portfolio of nearly seventy companies. Financing entrepreneurial inspiration in diverse founding teams, and backing bold ideas and business models that harness the power of technology to deliver value to mass markets, EchoVC invests in technology and technology-enabled startups serving markets across sectors and themes such as smart planet, healthcare and human services, education, agriculture, climate, energy, AI, financial services, mobility, commerce, media, and connectivity.

For more information, visit www.echovc.com

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About EchoVC Eco Pilot Fund I: EchoVC Eco (pronounced /iː.koʊ-/) is the climate, energy, sustainability, mobility and agriculture investing platform of EchoVC.

Announcing EchoVC Chain - Our Blockchain Seed Fund

Over the past few years at EchoVC, we have become intrigued with blockchains. The more we explored, and learned, the more excited we’ve become about the applications of blockchain and its functions in Africa.

We made our first investment in the blockchain segment in 2021, and have continued making further pre-seed and seed investments since then. For African markets, we believe blockchain functionality is more of a need, rather than a want, and our thesis is to leverage these functions to enable new leapfrogs, or unlock novel market opportunities, across the continent.

In keeping with our mission to support underrepresented founders and startups targeting underserved markets, we are excited to announce EchoVC Chain, an $8m ‘pilot’ seed fund focused on making investments in founders and startups that span our specific areas of interest, as set out below.

Fundamentally, we’ve been excited with two capabilities of blockchain: a) the ability to abstract / tokenize, and b) the ability to scale autonomously.

However, our perspective on the applications of blockchain in Africa traverses multiple layers. Our first layer of focus is on foundational fintech infrastructure. This includes infrastructure leveraging stablecoins to optimize payments, liquidity, and treasury; and also explores the unbundling and delivery of crypto/fintech building blocks, or “primitives” – which other companies can utilize to scale faster.

The second layer above this targets blockchain functionality. DeFi functionality can be leveraged in Africa for innovative financial products improving access to credit and savings, or perhaps powering new-age decentralized neobanks. NFTs can serve to foster the creator economy for the rising Gen-Z, enable games to provide new ways to earn, or even fractionalize real-world assets and portfolios to lower affordability barriers to investments.   

Thirdly, we are excited about the prospects of DAOs, not just for their ability to scale autonomously, but also to organize human networks. Examples in Africa are social collectives and informal markets, which are key strands of Africa’s offline economic fabric. DAOs can organize the offline and informal networks in a way that is beneficial for all participants. This should unlock labor liquidity and increase earning potential for the bottom-of-the-pyramid demographics. Other examples include decentralized agent networks, social networks, as well as gig networks.

Looking beyond this, we continue to explore other emerging blockchain aspects ranging from digital identity, privacy, decentralized infrastructure edge nodes and agile supply chains to a possible future intersection between AI/ML and DAOs.

On the regulatory side, we continue to observe the evolving landscape. Our view is that regulation is required and will have a positive impact to help guide innovation, improve stability, and remove frictions that still exist between decentralized and centralized worlds. One aspect that we are tremendously excited about is the advent of central bank digital currencies (CBDCs) as the digital version of cash – channeled through the banking system – to remove friction in access to financial products, streamline cross-border payments, and enable programmable local money.

Our current blockchain-related portfolio comprises 7 companies:

- Fonbnk (Aug’21): offers a wallet and marketplace that connects airtime to stablecoins enabling users and agents in Africa to easily on-ramp, off-ramp, and remit using airtime. We were excited with Fonbnk’s ability to tap into airtime – the most common digital commodity – and its ability to scale into other emerging markets

- Odum (Oct’21): runs automated market-making within cryptocoin and crypto-derivatives markets. We backed a promising founder, Ikenna Igboaka, formerly a trader at IMC. Odum’s market-making thrives with volatility, and crypto derivatives are an interesting market with trade volume roughly 2x that of crypto spot

- Ponto (Dec’21): provides regulated payment APIs connecting cryptocurrencies to mobile money and wallet products. We were thrilled with the potential for Ponto’s infrastructure to optimize payment channels into and out of Africa, and around the world

- Stakefair (May’22): has created a loss-less sports-wagering platform by leveraging DeFi functionality, however, what we were intrigued with is the founder’s acumen and vision to offer treasury services to enterprises and create a customized DeFi pool for African corporates to earn yield

- MUDA (Jul’22): conducts OTC exchange and payments for flows across Africa, as well as from Africa to Asia. We were impressed with the founder’s approach to building MUDA, his ability to leverage agent networks, and his ambition to provide MUDA’s platform as an API that can embed into other fintechs as well as into social channels  

- OneLiquidity (Aug’22): provides crypto and fiat liquidity-as-a-service to crypto startups, fintechs, and large enterprises in Africa. Liquidity has been a persistent problem in scaling a crypto or fintech startup on the continent and we were keen to back an extremely driven founder, highly adept at execution, and an avid learner who is deeply involved in the blockchain ecosystem in Africa

- FUHLStack (Dec’22): unbundles the components that are “undifferentiated heavy lifting” for crypto startups, fintechs, as well as enterprises that are digitizing. This enables clients to focus on getting to market faster and scaling more efficiently. The founder – one of the most impressive devs we have ever come across in Africa – is beginning with ledger-as-a-service as well as crypto wallet infrastructure, and has the potential to create interesting network effects within his ecosystem as he adds more services

The EchoVC team is incredibly grateful to our limited partners that have signed up to accompany our team and our founders on this exciting journey.

We welcome founders serving blockchain products and markets to reach out. EchoVC Chain is open for business.

Our Investment in Senga

EchoVC is excited to announce its seed investment into Senga, an innovative logistics startup in Kenya, and a first-mover in Africa, tackling a highly complex problem of "consolidation" logistics.

Senga uses a proprietary methodology that drastically cuts down delivery timelines for FMCG companies and other suppliers, using consolidation to deliver fragmented loads to large supermarkets across Kenya via continuous strings of trips. Senga has deconstructed traditional approaches used globally in consolidated delivery.

By tackling this complex problem, Senga is providing significant value to different participants in their ecosystem. Suppliers can send and receive inventory in a guaranteed time of less than 48hrs, as opposed to a typical time of 3-7 days. This is a critical issue as a delay in goods arriving at the supermarket means inventory spends more time in transit instead of on the shelf to sell – resulting in out-of-stock incidences, mismatched ordering and, ultimately, loss of sales.

We were intrigued by Senga’s differentiated approach toward an untapped space in African logistics. Additionally, we estimate Kenya's formal grocery retail market to be approximately $8bn per year of sales, and the transportation costs to move inventory to supermarkets and retailers as roughly $400m per year.

A key part of our investment thesis was to back June Odongo - one of the most driven, analytical, and ambitious founders we have come across.

June is attracted to difficult problems, and she views her approach to disrupting logistics as akin to "solving how data packets move in a network".

She was born in Kenya and graduated from high school at the age of 16, following which she moved to the United States and put herself through college - working full-time to raise money for her tuition.

She graduated with a Computer Science degree, magna cum laude, and worked at EMC for over 7 years, first as a back-end software engineer, and later as a tech lead where she oversaw the delivery of products that generated over $1bn in annual revenue. Later, she became a Snr. Product Manager at EMC, helping lead the execution of various products before leaving for Harvard Business School. Subsequently, following a role at Cisco Meraki as GM of its mobility software, June decided to create Senga.

Beyond her inspiring background, we've been extremely impressed with June's affinity for problem-solving, her highly driven personality, and her global perspective. Furthermore, we were excited with the path she has visualized for growing Senga, beyond consolidation logistics, into an ecosystem of adjacent software and financial services.

EchoVC, as the first institutional fund investing in Senga, joins existing shareholders in the company including two former C-suite executives from EMC and VMWare. We are tremendously excited to partner with June and support her on this journey as she builds Senga.

Our Investment in Ponto

EchoVC is pleased to announce its investment in Ponto – a global payments startup providing APIs and regulatory infrastructure to link the decentralized and centralized worlds such that neobanks, fintechs, and enterprises can harness crypto and DeFi for innovative and elastic banking and payment capabilities.

While linkages across different financial systems in the centralized world are still being built, the decentralized world suffers from difficult, slow, and inadequate connections into these centralized ecosystems of mobile money, bank money, bank cards, and cash.

Ponto is building the infrastructure layer to provide seamless connectivity between decentralized finance and centralized finance ecosystems, and with a regulatory-first approach – Ponto will also provide automated compliance and risk controls to support their infrastructure layer.

While we have not fully disclosed our blockchain-focused investment strategy quite yet, suffice to say, we have been actively developing our theses for quite a few years and one key element is what we are calling ‘translation infrastructure,’ which Ponto (and FonBnk) strongly illustrate. We consider companies building and deploying this infrastructure fundamentally important to ensuring that the Web3 economy serves, includes and empowers the 99%.

We are thrilled with the potential that Ponto brings, and their global ambition to optimize payment channels and enable the abstraction of DeFi functionality into the real world. From Africa’s perspective, we believe blockchains will unlock new opportunity sets on the continent ranging from innovative wallets, to efficient cross-border payments, treasury optimization, micro-credit, interest access, affordable investments through fractionalization, decentralized neobanks, new-age creator economies, and the emergence of social collectives built as DAOs. Africa represents fertile ground to develop a federated cross-border economy built on portable and fractionalized systems of identity, infrastructure, reputation, security and trust.

We look forward to partnering with Ponto on this exciting journey. This transaction represents EchoVC’s second publicly disclosed investment in the blockchain sector, following our investment in Fonbnk, a startup enabling users across Africa to access DeFi through airtime. We continue to seek and support the upside of blockchain in Africa, and look forward to welcoming more startups to our portfolio through our upcoming blockchain-and Web3-dedicated fund: EchoVC Chain.

'Fun with VC Math: Designing Funds in Africa' – Epilogue

We got a few questions from the 'Fun with VC Math: Designing Funds in Africa' podcast. We are sharing the responses below. 

Thanks to all those that took the time to listen to the podcast. I realize it can get a bit complex so apologies in advance. I have tried to simplify it as best as possible. Comments and questions welcome.

1) Why does it take $500M to 1X a $50M fund and $1.35-1.4B to 3x a $50M fund?

2) Why does it take 10 Paystacks to return a $50M fund?  

3) In the example when you introduce 50% failure rates, why is the average entry price $10M?

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Answers:

1) These numbers represent aggregate enterprise value created. If you assume you own 10% of a startup at exit, then $500m of enterprise value created returns $50m.

So it's not solely a scenario where a company in the portfolio exits at $500m, but what percentage you own at the exit. By the time you reflect dilution, it gets harder to own 10% at exit.


2) It doesn’t. It takes 10 of those exits to put the fund manager in position to potentially generate a 3x return on a $50m fund.

With Paystack, assume the exit multiple was 14.4x and assume you invested $1m into it. That is a $14.4m return sans dilution. You'd need to do that 10 times to return ~3x the fund. 

 This is not impossible (more likely improbable) but assumptions about the entry price and the dilution that occurred during the path to exit mean that the Paystack example is unusual. If I recall correctly, it raised just a Seed (~$2m in SAFE notes at different caps ranging from $5m to $10m) and an $8m Series A ($20m pre, $28m post, give or take) prior to its ~$200m exit so the dilution was not too material to the early shareholders.

Note that Paystack was acquired by an existing shareholder so the net payout to other shareholders was closer to $171m.

What is important to keep in mind is that many venture-backed companies may raise 3 or 4 times and it is in this cycle where your starting ownership goes to die. I have seen quite a few Series Es and Fs. Series Gs and Hs exist. The metaphor is like a font size: you start at Arial Bold 72 and end with Arial Narrow 8. You can still read your line on the cap table but your outcome looks (and feels) quite different. 


3) The failure rates tie in to 2 above. 

A ten-year $50m Africa fund with a 2.5% fee and expenses may leave you ~$36m to actually invest (after netting out management fees, fund and investing expenses) but, for ease of understanding, let's use $35m of investable capital to illustrate. 

Note that the illustration is solely of money on invested capital (MOIC) and doesn’t address internal rates of return (IRR) thresholds, which on a risk-adjusted basis, should be closer to 30%.

Let's say your strategy is to invest $1m checks, and assume you reserve $10m to defend your pro rata in certain deals. Pro rata is your right to invest at the next round of financing to preserve your ownership stake. FWIW, a 20% reserve ratio ($10m ÷ 50m) is on the low side and it's more common to see 30-50% of the fund set aside for reserves. That said, I know of funds that are designed to not have pro rata but those are usually much smaller.

So you make 25 investments (25 * $1m = $25m), and your avg postmoney entry valuation is $10m so you buy 10% in 25 companies.

Then you apply your reserves to defend your pro rata at the Series A (which are usually $15m+ rounds but may drift lower as a result of the current contagion in the public markets) so your follow-on check size is say, $1.5m. That means you can do ~6 follow-ons to protect your initial 10% holding.

So if all 6 companies exit after that point so they don't raise again (almost statistically impossible), then you hold 10% of the aggregate exit value. You would have invested $2.5m ($1m initial check plus a $1.5m follow on) into each of the 6.

Assuming they are all Paystack type exits at $200m (sure, everyone thinks they will be unicorns but actual exit data belies that) then your gross return from the 6 companies is $120m (10% * $200m [enterprise value per company] * 6 companies). 

But remember we started off by investing in 25 companies. 

If ~50% of them fail to return 1x or better, (remember that batting .300 (3 in 10) in major league baseball likely gets you in the MLB Hall of Fame) then we are looking at ~13 companies to drive the fund returns. 

Of these 13, 6 based on our example (pro rata defense) will return $120m. Maybe the remaining 7, representing $7m of investments ($1m * 7 companies) return 3x (unlikely but let's say so just for shits and giggles).

Then the aggregate fund return is $120m + $21m = $141m.

On first read, that's a smashing success for a $50m fund and delivers the 20% carry (profit share) to the manager.

Some quick calcs to illustrate the return multiples.

$141m: dollars returned.

$35m: dollars invested by the GP (LP committed dollars less fees and expenses).

$50m: dollars invested by LPs.

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$141m/$35m = 4.02x $-at-work gross; 

$141m/$50m = 2.82x trued up gross;

$141m - $50m = [$91m] * 80% [$72.8m] + $50m = [$122.8m] ÷ $50m = 2.45x net to LPs. 

 

The LPs have to get the money they invested right off the top. That’s why their $50m is deducted first from the $141m total. The 20% profit share applies to the balance.

This example of course assumes no recycling i.e. the GP taking interim returns from early exits and reinvesting so that (s)he can get to invest the full $50m and not the $35m after fees. Doing so generally improves the odds for the fund as more dollars are working via startups and not just underwriting fees and expenses.

2.45x is still a great VC fund net return (that should put you in the top decile globally iirc) but don't get too excited as Thoma Bravo and Vista Equity (multi-$B PE funds) have exceeded this threshold, and with lower risk profiles too.

But to have six Paystack exits (and seven 3xrs) is quite the dream. I'd sleep in for that.

Which then leads us to the power law. That is, one company sets up to return the whole fund (or more). But for that to happen in a $50m fund, you have to have at least one $1b exit and own 5% of the company at exit (and after dilution). With the fundraising froth and (increased) round sizes, many companies would have raised 4-5 times before they become unicorns. That's at least 3-4 dilutive rounds.

Which brings us full circle to why the entry price always matters. Buying 10% for $1m makes it harder to own 5% at a billion dollar exit. Buy 20% and then you have a shot. 

But the entry prices are now so high (e.g. valuations for pre-seeds in the high single digits and seeds in the high teens or more) and the competition to invest is so excitably frothy (with price-insensitive investors committing hundreds of thousands of dollars after the first meeting), that $50m funds may actually need up to three unicorn exits to have a shot at returning 1x.

Rough play.

This business is like many others. It may seem easy from the outside looking in but it's really much harder than it appears and takes a long while to be successful. I am grateful to have found a career that I love and would do for free but make no mistake, it requires a ton of hard work, conviction, adaptability, and luck.

Go make it happen.

-Eghosa

 

Our Investment in Wapi Pay

We are pleased to announce that we have led an investment in Wapi Pay, a fintech startup founded by Paul Ndichu and Eddie Ndichu, that is powering a new Africa-Asia payment gateway to help bridge the exchange of economic value between the two continents.

Wapi Pay, based in Kenya and Singapore, operates across Africa and is enabling corporates, merchants, and individuals to easily send payments and remittances between Africa and Asia.

With an initial focus on the China-Africa corridor, Wapi Pay has also added coverage for other major Asia economies that are trading with the continent, including India, Indonesia, Japan, Thailand, Philippines, Malaysia, and Taiwan.

Africa's relationship with Asia, and in particular China, has deepened greatly over the past few years and has created an ecosystem of symbiotic flows between the two regions.

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On one hand, payment flows from Africa to China are driven by African merchants and large corporates purchasing goods and services from China. This is an enormous stream of payments, estimated at $113 billion in 2019, supporting trade in items as diverse as clothing, consumer electronics, food, and telecom equipment.

Additionally, large Chinese corporates operating in Africa remit a portion of earnings back to their home country. Within Africa, it is estimated that more than 50% of infrastructure, mining, and energy projects are performed in partnership with Chinese corporates operating in Africa.

The inverse side of the relationship is the products that Africa provides to China resulting in payment flow from China to Africa for commodities, oil, and ore, as examples.[1] 

This inverse flow amounted to $96bn of exports from Africa to China in 2019; resulting in total bilateral trade between Africa and China of $209bn that year.[2] 

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And yet the traditional payment channels between Africa and China are wrought with pain-points of slowness, high rates of transaction failure, and expensive transaction costs. A payment from Africa to China can take up to a week to process and costs up to 15% of the payment value due to fees and foreign exchange conversion to intermediaries along the traditional network path.

Wapi Pay’s founders started the company to help solve this, and enable a seamless, frictionless way to send money, for payments and remittances, between Africa and Asia, at a cheaper cost.

As a new payment gateway between the two continents, Wapi Pay brings an incredible value proposition to an enormous and untapped market opportunity.

Paul and Eddie are impressive founders with deep experience in African fintech and banking. We are very excited by their vision to evolve Wapi Pay, building up from payment rails, into a broader ecosystem of fintech services to merchants and corporates across Africa and Asia. 

As part of this pre-seed round which we helped syndicate, EchoVC was joined by MSA Capital, a leading venture and growth capital investment firm based in China, and by Kepple Africa Ventures, an Africa-focused early-stage VC firm based in Japan. We look forward to working closely with Paul, Eddie and our co-investors on this next phase of growth.

Our Investment in KOSA

EchoVC is excited to announce its investment in KOSA.ai - an artificial intelligence startup that offers an automated responsible AI platform to support enterprises that build and deploy AI systems.

Artificial Intelligence (AI) will affect consumers and enterprises unlike any other technology we have seen before and has been described as the greatest economic opportunity of our lifetime - estimated to contribute roughly $16 trillion to the global economy through 2030 ($8.7 trillion excluding China) (1).

For enterprises, AI delivers automation and valuable insights that enable companies to scale more efficiently, and provide better services and products.

In 2020, a survey by IBM found that ~75% of enterprises across the United States, Europe, and China had either deployed AI or were ramping up their exploratory AI phases. IBM estimates this percentage will jump to 80-90% within the next 18 to 24 months (2).

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However, a major headwind to enterprise AI adoption is the limited in-house expertise to build and develop AI models, and manage data complexities.

One consequence of this is AI bias - affecting large and small enterprises alike.

AI bias is the manifestation of systematic prejudice and unfairness in the results of artificial intelligence algorithms. This can arise from incorrect training or real-world data that is used to develop the AI; or from the conscious or subconscious bias of developers creating the AI. Such bias may not even be apparent until post-development once the AI model begins to "drift" when deployed into the real world.

Bias in AI creates error rates, failed transactions, as well as missed or under-served consumer pools - all of which result in lost revenue for the enterprise. Other consequences include a weaker value proposition to the enterprise's customers, lower competitive ability, as well as heightened regulatory risk and brand reputation risk.

Some past occurrences of AI bias have included:

Amazon: 

- In 2019, Amazon's facial recognition AI, Rekognition, was found to have bias-related errors in identifying women and darker-skinned individuals: it mistook women for men 19% of the time and mistook darker-skinned women for men 31% of the time. (3)

- Separately in 2015, Amazon realized that their hiring algorithm had incurred bias against women since it had been trained on résumés submitted over the prior 10 years - which were mostly male résumés. (4)

Facebook: 

- Was sued in 2019 by the United States government because its ad-targeting algorithms had developed gender and ethnic bias in how it chose which consumers to target for housing and job ads. (5) 

Self-Driving Algorithms

- Are also prone to bias-related errors, with a study finding that Black pedestrians, compared to white pedestrians, were 5% more likely to be hit by self-driving cars due to biased object detection models. (6)

UnitedHealth Group:

- A study published in Science in 2019 found that UnitedHealth’s Optum algorithm, which services over 200 million people and predicts which patients would likely need extra medical care, heavily favored white patients over Black patients - denying care to nearly 50% of Black patients in need (7)

Apart from lost revenue, lower competitive ability, and brand reputation risk, AI bias will soon expose enterprises to significant regulatory risk.

Earlier this year, the European Commission released legislative proposals on AI governance with contemplated fines of up to 4% of global annual revenue or €20m (whichever is higher), for non-compliance of AI use-cases.(8) 

In the United States, a bill was introduced in 2019 to the US Congress, titled "The Algorithmic Accountability Act", which sought to mandate companies to “conduct impact assessments and reasonably address in a timely manner any identified biases or security issues” in their AI algorithms.

We believe that bias in AI is now, and will become a materially more, crucial problem for enterprises, and society, in the future.

KOSA can help solve this. 

KOSA is a data analytics and algorithmic company that assists enterprises to detect, audit, and explain bias in their AI models - and then implement corrective steps to address or mitigate the bias. Additionally, KOSA can support the enterprise in monitoring their AI models post-deployment for any "drift" towards bias. Furthermore, KOSA enables enterprises to define both AI KPIs and "fairness" for their AI models.

We view KOSA as a multi-vertical, layered approach to participating in the AI sector. Our investment thesis is centered on backing two exceptional founders, tackling a difficult - yet inevitable - problem; in a massive opportunity set. 

Layla Li and Sonali Sanghrajka, the co-founders of KOSA, impressed us with their backgrounds, their agility and ambition; and their vision to scale KOSA into a global business - potentially becoming an industry-standard in "fair AI".

We are grateful to partner with KOSA on this exciting journey. As part of this pre-Seed round, and in conjunction with APX, EchoVC was joined by members of an EchoVC-led syndicate comprising Dale Mathias, TheContinent Venture Partners, Fine Day Ventures, and Arch Capital.

An invite to the Extreme Tech Challenge (XTC) competition

The Extreme Tech Challenge (XTC) competition is the world’s largest startup competition for entrepreneurs addressing global challenges. Drawing from the United Nations Sustainable Development Goals, XTC connects innovators with a network of investors, corporations, and mentors to help them raise capital, launch corporate collaborations, and scale their world-changing startups.

EchoVC, in partnership with Atlantica Ventures, is hosting the first ever Africa competition.

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APPLY NOW                                                  

Ten startups will be selected to pitch to leading VC’s and thought leaders on April 23, 2021.                                                                      

WHO CAN APPLY?

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ABOUT  

ECHOVC- EchoVC Partners is an experienced seed, early stage & growth technology venture capital fund focused on financing and cross-pollinating leading technologies, teams and business models in Sub-Saharan Africa, Europe and North America. As stage-agnostic investors with a combined network of local and global connections, we bring a disruptive approach to investing at the technology intersection of consumer, media, data, & devices and leverage knowledge transfer from Silicon Valley as a driver to seed growth across borders.

ATLANTICA VENTURES- An early-stage venture capital fund that helps scale socially responsible startups in Sub-Saharan Africa. We believe technology companies can drive inclusive growth across the continent. Atlantica Ventures helps companies grow from Seed through Series B stages with active operational support, growth capital, and our global network of partners, entrepreneurs, and strategic and financial investors.

XTC- The XTC global startup competition aims to nurture the global  entrepreneurial ecosystem by supporting new business ventures with viable, commercial technology that can directly impact our most critical global challenges and connecting them with the corporations, investors, universities, media and NGOs who are our sponsoring partners.

Coming in from the cold: VC outreach and minority founders

This was a tough-to-swallow read. https://bit.ly/2W218ag 

The truth is, it was painful but not surprising. Grateful to Nerissa Zhang for sharing what so many of us in the Black tech community have to deal with every day, even after paying so many visible and invisible dues.

I shared the [lightly edited] thoughts below in an affinity group and it was suggested that I publish it to a broader audience.

The biggest takeaway is that it is important to recognize that warm intros will continue to be the best intros for the foreseeable future. We are trying to fix it but it will take a while. The sheer volume of entrepreneurs trying to raise VC means ALL investors have to figure out a way to quickly filter incoming deals and getting a referral from a trusted source puts that opportunity at the top of their evaluation list. 

LinkedIn can be your superpower. If you are connected to someone that knows the investor you are targeting, then absolutely use that link but honor your first degree connection's time & social credits by sending a request crafted to be forwardable with little to no effort and a bit of an editorial.

Social proof is crucial, in this world and others. Hate it if you must but understand why it exists and do what you can to make it work for you.We recently got cold pinged on LinkedIn by a Black founder. We responded and guided him re: how best to submit his opportunity to us AND how to pitch himself and his business. He came back with an unexpected response. He cold pinged 25 other people, many we know and some others that are currently doing #BLM ballet on social media. We were the only ones to respond. 

All that said, there are some cold email hacks that I have recommended to founders of any color or gender. Yes, it is tedious trying to customize outreach at scale but getting investors is brutal for all of us.

Right off the bat, PLEASE research your investors and get a clear sense of what types of deals they like to do. This is very true in the seed and early stage markets. Don't waste your time by wasting theirs. No one is happy and everyone is pissed. I'd also point out that quite a few investors we know, us included, have intake processes on their websites so founders can submit their opportunities. Rest assured that everything that is submitted is read.

Here are my 'cold outreach' suggestions.

1. Make the subject unusual and interesting. Keep the open warm but brief. Can state why you are pitching this fund in particular e.g. they invested in X and your startup is in an important adjacency.

2. What is the problem you have identified? Why is it interesting? How big is the space? SAMs vs TAMs pls.

3. What are you building? Or what have you built to address 2? Timeline and scope of traction, if any?

4. How much are you raising? How much have you raised? If you have any brand name investors or advisors, name drop here.

5. Team bios and recognizable school/job logos; Location of ops.

6. Attach a short prezo or link to a crisp no-reg docsend. Many investors don't like docsend so make sure to mention you can send them the deck if they prefer.

Many founders are upset because they don't get any feedback, even if they ask for it. Yes, it's quite distressing because you have no idea why the investor passed but understand that (1) investors are overwhelmed and (2) they want to maintain optionality just in case you later turn out to be interesting and they have to wend their way onto your cap table.

I know Alfred Lin and he is generally good with sending short feedback. It may not be as verbose as you want but it's just a no. Don't take it personally and keep moving.

Note that no matter how pro-BLM non-minority VCs may appear to be on social media, many are likely not when it really matters or it's not as much a priority for them. Don't take this personally. VCs are pattern matching creatures and when minoritized founders show up, these VCs have very little to anchor their matching 'skills' to, the latter being arguably calcified such that new 'experiences' are unwelcome. Yes, bias is real but always remember you are exceptional, not an exception. 

It takes one investor to get the ball rolling. Your quest is for that one, angel or VC. 

Open-Mic Session: Accessing Seed & Early Stage Finance for African Startups

It was great bringing together investors in African and Africa-focused companies to discuss insights, challenges, ideas, and thoughts about investing in the era of COVID-19. The webinar was hosted as an open-mic session and featured over 100 participants from first time Angel investors to Venture Capitalists, Private Equity professionals, and Fund Managers across the globe. With the view that a lot of the developed market investors will be focusing on local opportunities when they come out of portfolio management triage, we felt it was important to share and exchange thoughts on how to assemble post-COVID capital for the next generation of important seed and early-stage startups. 

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We are also putting a list of active Africa-focused investors together and would appreciate if you could fill out this form to get more information on your investment criteria.

Questions & Answers (transcript edited for brevity):

  • What is the biggest risk for an investor investing in Africa?

    • Founder integrity is a big problem. The willingness to cut corners for the benefit of themselves and to the detriment of investors is a big issue. There’s a much smaller and finite group of founders that you can count on. Dealing with this becomes a burden on the investor and presents a risk that may not be very visible to you in other markets.

    • The paucity of exit opportunities. This is something that comes up when we talk with LPs in other markets that they don’t see. The concept of getting dividends and payouts on cashflow is not traditional in VC because VC is set up for the exit; the big win; the power-law distribution across the portfolio. But the fact of the matter is there will be many companies that may never get to that exit but become really good operating businesses. One thing that investors always hope for is that there is going to be some exit at the end of the rainbow, but what happens when there isn’t one? How do you force that? Do you now start to think about getting dividends into this thing and so on and so forth? And it’s going to be much harder when you do this at the end versus the beginning. I don’t know whether there is a solution to that right now because I think the US market has always been very interesting in how to set the pace for all these terms. I’ve seen how the terms change when the market changes. The first time I saw a 5x liquidation preference was in the US. I’ve never seen it anywhere else. I’ve never seen it in Africa and never knew it existed! Hard ‘redeemable’ dividends, compounded – I’ve seen that in the US. These are all terms designed to ensure that there is a return and I think one of the things we should do as investors is to have open conversations with the founders about expectations. It feels like the founder just wants to get your money to go in and just do the work, and that is probably not a bad thing because one of the key lessons of being an investor is knowing how to get out of the way, but, there is an expectation for the return and I don’t know how many of us are having those conversations. That’s a thing I think people should talk more about.

 

  • How do you not lose credibility with employees that have sacrificed so much for your startup? (Founders addressing layoffs as a result of COVID-19)

    • As investors, we have to be co-empathetic with the founders we’ve invested in to go through this process. I like to tell people that one of the hardest things I did was when I was Chief of Staff for Intel Capital, we had to participate in a companywide reduction in force and I remember it like it was yesterday. I hated every minute of it and I swore I was never going to be part of it directly ever again. So, I cannot even begin to imagine what it is like for people to go through that. We’ve talked about being able to help founders navigate through this process. Being available and empathetic with them to help them get to the strength they already had and to the strength they will need to make the hard decisions. You need to be able to get to people and relay to them that this is not the outcome I wanted but everybody is struggling and it’s not just us, it’s the whole world. For us to survive and give you the opportunity to potentially come back, we’re going to have to reduce our headcount. Investors have to be supportive of that process.

 

  • How do we help facilitate consolidation?

    • All the startups in the world believe they are fantastic but I’ve been in this business long enough to see businesses releasing press releases of how great they were on Monday and sending shutdown emails on Friday. I get wanting to look bigger and better than you are but that suggests to me that you are not a pragmatic founder because what you have to be able to do is to sit down and say let’s figure this thing out. We created a corporate development element inside our fund to help startups to be better placed to get acquired or to acquire. You’ve got to go back to your startups and ask if they are better off doing this together with the competition and going out and raising money with a bigger opportunity and execution set than you are just doing this now and coming to a halt in 30 or 60 days? That’s going to be very important and I think all of us need to have those conversations with our startup founders because it needs to happen. There’s no way you’re going to get around it now, it’s super super important. 

Antifragility in the Africa-focused Entrepreneurial Ecosystem - March 2020 webinar

As we build and invest in high-impact tech and tech-enabled companies focused on serving various African sub-markets, we see a lot of current market participants that have never faced anything like the catastrophe that #covidー19 is shaping up to be. Many are clearly not equipped with the tools or knowledge to manage or mitigate the impact of an economic recession. The objective of this webinar is to share insights, best practices and recommendations for operators and investors and run a central line into the conviction and energy we collectively have to ensure we can continue to successfully serve our customers, employees, and ecosystems.

The panelists: Folabi Esan of Adlevo Capital, Rebecca Enonchong of AppsTech, Wim van der Beek of Goodwell Investments, Tokunboh Ishmael of Alitheia, Stephan Breban, Clive Butkow of Kalon Venture Partners, and Eghosa Omoigui of EchoVC Partners.

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Organization Updates

We have some exciting updates to share and also a bit of disappointing news.

Just over two years ago, we welcomed Uche to our team as our first Associate Principal, Investments and Portfolio Management. In the time since then, she has exceeded expectations and worked on quite a number of different transactions. More importantly, she displayed leadership in being an incredibly valued team member and mentor to our less experienced team members while making meaningful contributions to the portfolio, our founders and the ecosystem at large.

So when she voiced her interest in picking up operational experience, we were disappointed at the prospect of losing her but understood that going into the thick of things in a high-growth startup would only be beneficial to her long-term knowledgebase and the expectations for the evolution of her career.

We are sad to see her go but glad she will remain close to us as she will be joining our newest portfolio company (to be announced shortly) as their new COO. Our warmest congratulations on her new gig and we fully expect she will continue to make us proud.

Additionally, as some of you may have noticed, our team has grown quite a bit and we are thrilled to share more about our new team members and some slight modifications to our organization.

Legal, Compliance & Corporate Development:

As we have grown, and our full stack investing and portfolio management & development has dramatically increased, we identified the need to expand the internal legal group to incorporate these three activities. While possibly distinct, we believe it to be more efficient and valuable to have them coupled. In addition to beefing our in-house legal coverage (more on that later in the year), we are currently shortlisting talent that will help drive our corporate development activity. This will cover inbound and outbound M&A activity for portfolio companies as well as cross-border biz dev and transaction support.

Effective EOQ3, Dami will be Associate General Counsel and co-head of this group.

Research:

As many of you may be aware, we have been a thesis-driven firm from inception. Our theses have shaped our thinking re: market opportunities and we continue to highly value the approach. To augment our knowledge, and build out deeper insights into various sectors of interest, we saw a clear need to bring this capability in-house. We are thrilled to welcome Aima Nwafor-Ohiwerei to the firm to help drive this activity. She joins us from Singularity Investments and, prior to that, was at EY. Aima graduated from Bangor University, Wales.

Platform & Operations:

Following discussions we have had over the last year, we decided to crystallize some of our ongoing thinking re: how best to support each of our portfolio companies and, more importantly, help optimize their internal processes and operations while ensuring we could develop and deploy efficient line-of-sight infrastructure to obtain timely data and activity reporting.

We were incredibly fortunate to meet Deji Sasegbon who joins us as our new Director of Platform & Portfolio Operations. Deji previously worked at Total and has a doctorate in Engineering from Imperial College, London. He will be primarily responsible for building out the infrastructure to deliver high-octane support and empower portfolio company teams.

Investments & Portfolio Operations:

As we deliberately evolved into a more stage-agnostic VC firm, making investments that span seed-, early- and early growth-stage check sizes, we have experienced almost overwhelming deal flow. This has necessitated the urgent need to grow this side of the house.

Therefore, we are excited to welcome the following additional team members:

  • Taiwo Kamson Ketiku, who joined us from United Capital, is our Vice President, Investment & Portfolio Operations. She graduated from the University of Aberdeen with a Masters degree in Finance and Investment Management.

  • Tsendai Chagwedera, who joins us from TPG Growth as our Associate Principal, Investment & Portfolio Operations and Regional Head of East Africa. He will be based in Nairobi starting in the fall. Prior to TPG, Tsendai worked at ECP, H.I.G Capital and Blackstone. He has a BA in Computer Science from MIT.

  • Tito Cookey-Gam, who joined us from ARM and Crasner Capital, is our Analyst, Investment & Portfolio Operations. He graduated with a Bachelors degree in Biochemical Engineering from University College, London.

  • Saeed Seghosime, who joined us from Sahel Capital and Verod Partners, is our Analyst, Investment & Portfolio Operations. He has a Bachelors degree in Chemistry and Chemical Engineering from the University of Huddersfield.

Geographic Expansion:

As our portfolio blooms, it has become necessary to expand the firm's base of operations. With several new additions to the portfolio, we have now reached a point where distributed physical presence to better support existing investments has become necessary. Consequently, we plan to open our first offices outside Lagos. Later this year, London and Nairobi will become part of our office network. As mentioned, Tsendai will be based in Nairobi to oversee activity along that geographic axis and he will be supported by a rotating analyst.

We are incredibly excited for the future and looking forward to building it with the very best Africa-focused entrepreneurs.

Thank you for all your support.

The EchoVC Team

#WeAreEchoVC

Our Investment in PayJoy – Deepening Smartphone Penetration… Democratizing Access

A lot has been said over the years about the importance of enabling people to participate in the growing digital economy that is enabled by the internet.  The value proposition is clear: give people cost effective and dependable access to the internet and they will have a good shot at significantly improving their lives. No wonder that in 2016, the United Nations declared access to the internet a basic human right.

Access to the internet cannot be overemphasized; in 2018, global internet-influenced retail sales rose to $2.84 trillion and is expected to rise to $3.45 trillion in 2019. An estimated 1.92 billion people are expected to carry out commerce online in 2019. However, more than 750 million Africans are currently excluded because they are not connected to the internet. These Africans are cut off from the opportunities that internet access enables to potentially earn an income, educate their families, and access digital goods and services to improve their lives and communities.

Almost half the world remains digitally unconnected. In Africa for example, internet penetration is at 37.3%, making it the lowest globally, significantly distant from its counterparts in Asia, Middle East and Latin America which have penetration rates of 51.8%, 67.2% and 67.5% respectively. With only 56.8% global internet penetration, it means that over 3.3 billion people do not have access to the internet, let alone access to affordable data.

In thinking about the challenge of internet connectivity in Africa, there are a number of factors that we believe are important. Firstly, gross under investment in most African countries over decades has meant that mobile connectivity will be the nearly exclusive way that Africans come online. Mobile telecommunication companies have invested billions of dollars in expanding and improving the quality of mobile connectivity to African – we estimate around 70-80% of all Africans now live in an area that is covered by a mobile network signal. In addition, data from Facebook and other popular online services show that internet connected Africans are predominantly accessing these services from a mobile phone.

Secondly, for those able to get online, the cost of getting online (as a percentage of per capita income) has been decreasing, rapidly. Data from the Alliance for Affordable Internet on mobile data costs shows that on average the cost of 1GB of mobile data has dropped from around 12.5% to 8.8% of GNI per capita from 2015 to 2017 and it continues to improve. In Egypt, Ethiopia, Kenya, Nigeria and South Africa, the affordability of mobile data over this period has improved by over 50%.     

Finally, the affordability of internet-capable mobile devices is a significant factor that limits the uptake of smart phones for access to the internet. A recent report by GSMA found the cost of the handset to be the highest perceived barrier to mobile phone ownership across many emerging markets. The cost (and hence affordability) of these phones has been improving – the same GSMA report found that the average selling price of a smartphone in Africa decreased by about 20% across Africa from 2008 to 2017. Nevertheless, the average smartphone still costs between $100 and $200 in many emerging markets, price levels that are still unaffordable for large segments of the population with limited to no access to asset financing products that are traditionally available in developed economies to support the purchase of these devices. Many people in developed economies are very surprised to learn that the typical African consumer has to pay the entire amount upfront to purchase a smartphone. Unlocking product financing has, in our view, been an integral first step to solving for several contiguous problems, viz, access to credit (finance), access to quality mobile devices, access to the internet, and most importantly, offering Africans optionality to improve their personal and professional lives. Africa cannot afford to be the dumping ground for feature compromised devices that worsen the total cost of ownership while luring users with the promise of a cheap device.

Payjoy enables people who lack credit (or credit history) to gain access to smartphone financing, thus improving [quality] smartphone penetration in emerging markets including Africa, India, Latin America and SE Asia. The company’s full-stack platform pulls together an ecosystem of OEMs, Resellers, Finance Companies and Telcos through partnerships that enable it to provide a seamless product. It currently has partnerships with Samsung (India), ITOCHU (Indonesia), Boabab (Cote d’Ivoire), MTN (Nigeria, Zambia) and a number of others including Apple, Verizon and Qualcomm. PayJoy’s locking technology embedded in the operating system also enables the smartphone to act as collateral for both phone financing and micro-lending thereby further democratizing access to smart phones and internet and opening up opportunities that were previously inaccessible to the middle to lower income segments of the relevant economy, thus assisting them to move out of poverty.

Doug Ricket, the CEO and co-founder of PayJoy, is one of those founders we adore. Since meeting him almost 5 years ago, we have been impressed by his relentless focus on unlocking product finance. He has gained a deep understanding and attachment to this problem through his work at Google, D.light and the Peace Corps. PayJoy for him is not just another bright idea, it is a problem he is deeply committed to solving. Payjoy believes the time is now and we strongly agree.

We have built, and continue to build, a portfolio of symbiotic investments in companies that support our investment theses of fragility, lift, lubricants and organizing the offline. To illustrate, our investment in Mines.io, an ethically responsible small-check lender focused on serving the underbanked and unbanked population in Africa and elsewhere by offering unsecured loans with loan decision underwriting in 60 seconds or less, is an example of how we looked to build a full-stack approach to financial inclusion in Africa. Our investment in Payjoy solves the consumer’s ability to access smartphone-secured credit that allows them to manage cashflow, build a credit history, and create life optionality by accessing internet services via better quality devices. Another [undisclosed] investment of ours is addressing inclusion by solving the fundamental issues around network access and elasticity through material cost reduction in service providers’ capex and opex.

As an Africa-focused VC firm, from inception we have been very thoughtful about how to invest to protect and empower the fragile African consumer and SME. Antifragility should underscore the pursuit of prosperity. We are of the view that, through syndicated educational content, our network of portfolio companies can foster financial wellness in an environment where there has been chatter about abusive consumer behavior AND predatory lending practices leading to debates as to whose role it is to ensure microloan borrowers responsibly use credit. For Payjoy, the platform ensures credit is specifically used to finance (new and preowned) smart phones which, in turn, we believe can significantly improve standards of living. The locking technology, which turns the smartphone into collateral, also ensures that microloan borrowers are disciplined in the size of loans they secure, in making timely repayments to avoid restricted access to their phones, and spiraling into a debt trap.

One important driver for us, in spreading financial wellness to populations that may never have access to credit otherwise, is to ensure that the feedback loop between access to credit, good repayment behavior and rewards, including but not limited to better financing terms, is relatively short. We are working with our portfolio companies to ensure empathy and enforcement are engineered into their platforms. This will benefit the many and concurrently ensure the abusive few are course-corrected in short order.

Making quality smartphones more affordable will be a major step towards improving internet penetration in Africa and emerging countries. This, in turn, will sponsor full access to the world of tech-enabled products and services leading to professional and personal lift and financial inclusion, amongst several other benefits. We look forward to working with an experienced and committed team and supportive co-investors to make this future a reality.

We are pleased to be participating in this financing with our co-investors including Greylock Partners, Union Square Ventures and Core Innovation Capital. We look forward to working with Doug, Mark, Gib and the Payjoy team to deepen smartphone penetration across emerging markets, unlock collateralized financing for the bottom and middle of the pyramid, and increase access to previously unreached communities while helping spread financial wellness.

Our Investment in WorldCover

Agriculture is a key economic sector in many countries around the world. In Sub Saharan Africa (SSA) for example, the sector contributes, on average, 15% to the GDP of the region. More importantly, agriculture’s contribution to GDP reaches as high as 50% in Chad and ranges from 20-40% in the most populated countries in the region such as Nigeria, DRC, and Ethiopia. The sector is also important for employment - more than half of the total labor force in SSA is engaged in agriculture on smallholder farms (less than 2 hectares in size) that constitute approximately 80% of all farms in the region. 

These smallholder farms are for the most part rain-fed and heavily exposed to the impact of adverse weather patterns, which can be significant. In Kenya alone, the 1998-2000 drought was estimated to have had economic costs of US$2.8 billion. More dramatically, the post disaster needs assessment for the extended 2008-2011 drought estimated the total damage and losses to the Kenyan economy at a staggering US$12.1 billion.

In more developed economies, there are established markets for the transfer of such risks from individuals and institutions facing such risks to counterparties that are better able to diversify and manage them. However, in Africa and across much of the emerging world, insurance and reinsurance companies have done a suboptimal job of identifying, capturing and transferring these risks to market players who are best able to underwrite them. 

WorldCover was founded to address the last-mile transfer of these kinds of risk by powering a climate risk marketplace initially targeted at the ag sector. In emerging markets (starting with SSA), WorldCover connects farmers (and ag parties exposed to climatic risks) with climate risk investors. Through its risk transfer platform, the company offers farmers protection against natural disasters and phenomena that negatively affect their crop yields, while giving risk investors the desired diversification of their risk portfolios and offering uncorrelated investment returns. For the farmers, insurance cover provided through WorldCover safeguards their livelihoods and, as studies have shown, gives farmers the confidence to further invest in their farms, unlocks access to credit and other services, and ultimately produces more income for them and their community.

While others are tackling the problem in a variety of ways, we are particularly excited about WorldCover’s approach using an ‘easily digestible’ and understandable product, distributed directly and through local partners, combined with simple and cost effective processes for claims and claims administration, all leveraging the Company’s proprietary technology. The platform is flexible yet robust and can be used all over the world for a wide variety of natural phenomenon that threaten agricultural yields such as drought, flood and typhoons.

Chris Sheehan is the type of Africa-focused entrepreneur we love to support. He has come at the problem with a distinct approach and, together with a highly experienced team, has developed the zero-cognitive-overload product and further demonstrated its fit with the needs of smallholder farmers in Uganda, Kenya and Ghana. These farmers have demonstrated trust in the company and signing up for, and repeatedly subscribing for, insurance cover over the last few planting seasons. 

We are pleased to announce our investment in the Series A round for WorldCover, in conjunction with our co-investors, MS&D, YCombinator, Savannah Fund, Greylock, Index, Venrock & a host of high-quality angels. We look forward to working with Chris and the team to drive adoption of climate risk protection for agriculture in Africa specifically, and emerging markets in general.

Congratulations to Riby on the EFinA Financial Inclusion Grant

Congratulations to our portfolio company Riby Finance Limited for being a recipient of the EFinA $2 million financial inclusion grant. This is a testament to the company’s ongoing hard work to drive the banked population significantly higher whilst building a strong and sustainable business.

At EchoVC, one of our investment theses is organizing the offline and then bringing the offline online. So we are always keen on partnering with businesses that can elegantly automate offline behavior. Group lending and savings is one of such behaviors. We had thought deeply about the best approaches to automating this and then we met Salami Abolore, the founder and CEO of Riby Finance Limited.

Salami has an unmistakable aura of passion, resilience and determination to solve the specific problems of the underbanked and unbanked using the existing group culture. Faced with a personal problem of financial management and access to loans himself, Salami created an offline group amongst his friends in a bid to encourage joint savings (and access to credit whenever the need arose), with the aim of promoting and digitizing savings, lending and investing amongst peers. This mission birthed Riby.

Riby distinctly operates in a highly fragmented marketplace of cooperative banking with the bulk of its target market being at the bottom of the pyramid. Starting with Nigeria, with less than 5% of adults having access to credit cards or bank loans, and 40 million people unbanked, Riby’s objective is to introduce and deploy the culture and practice of being banked to the millions of Nigerian adults currently financially excluded by allowing them to save, borrow and invest with ease.

Riby does this by strategically positioning itself as an aggregator platform where members of cooperative societies have a line of sight into their activities and can access short-to-medium term loans or grants from commercial banks, DFIs, development banks, not-for-profit organizations, etc, who, in the same vein, get high-value insights into disbursements of loans or grants to the final beneficiaries. As an example, one of Riby’s products has powered the group lending activities of a notable government entity enabling it to attain the status of being the second highest micro-lender in Africa.

According to EFinA research conducted in 2018, 75% of the adult population saved via informal structures (groups and cooperatives) and family and friends and 100% of the population borrowed from the same. While a lot has been done with regards to ensuring global financial inclusion, access to finance still remains a major inhibitor to economic growth. With at least 50 million adults in Nigeria being financially excluded, and a 4.3% credit penetration from banks in Nigeria, Riby has a large target market to which it can provide a viable alternative whilst championing the high-impact cause to increase financial inclusion.

We have always believed that in this nascent tech environment, industry winners in the near-term will be those who have chosen to first refactor rather than disrupt. Hence, by taking offline behaviour and replicating it online, Riby is not attempting change the decades-old tradition of communal savings but instead, optimizing and scaling it to ensure that its products are accessible and usable across the various age cadres and literacy levels.

We are incredibly excited to support Salami and the Riby team as they grow to become a centralised repository of financial data and a lending and savings platform for cooperatives and societies. We look forward to working together to onboard ten million unbanked Nigerians!

It’s a HIT: Office Hours

INTRODUCTION

On the 4th of April, 2019, the EchoVC team had its first ‘Out of Office Hours’ where we met with founders of tech and tech-enabled businesses. This was done at Art Café (Victoria Island, Lagos) which was very cozy and seemed perfect for an out of office meeting.

During the three-hour window, the EchoVC team spoke to over 15 different tech businesses pursuing opportunities in diverse sectors such as PropTech, FinTech, Logistics, E-Commerce, etc. Honestly, we had hoped we would meet at least 1 good company, but we actually found a few really interesting companies.

We spoke with 2 categories of people:

The Entrepreneurs: Those who run businesses with some significant traction and were looking to raise, structure, expand or learn.

The Professionals: The bank guys, the lawyers and some curious cats who just wanted to know what this was all about.

CONTEXT

As a reminder, EchoVC is a seed and early stage venture capital fund focused on tech and tech enabled businesses. We are sector agnostic and we love businesses solving major problems that are both realizable and scalable. 

We have been incredibly busy investing in secrets, and because we know that to find secrets we have to go treasure hunting, we thought what better way to meet great founders, share knowledge AND give back to the ecosystem than to pop our heads out for out-of-office hours.

Think about it!!!

But, Don’t Overthink it

It was just a conversation, we just wanted to have a chat to get to know you and your business. We had never done this before, so we were as nervous as our founders (though our founders were not aware). We wanted a relaxed environment so we could be free to have an honest conversation. It’s like that first blind date.

We also got some funny and serious questions too – below are a few:

1.    Q: Are you with the EchoVC team?

A: Depends on who is asking. And please ignore the t-shirt.

2.    Q: What inspired the team to hold office hours?

A: We realized that a number of founders and tech teams sometimes require an environment that is chilled to discuss business ideas on the surface and gauge if they are investment-material. This was the major inspiration to do this.

3.    Q: What are the major characteristics you look out for in a Tech business?

A: 5 T’s and they are:

·      Strong TEAM;

·      Great TECH (Product);

·      Large TARGET ADDRESSABLE MARKET;

·      Wide TRENCHES (MOAT); and

·      Decent TRACTION (Existing Users, Paying customers).

Also remember that personal details are not exchanged and it’s important to adhere to this so as not to come off as obnoxious (if you know what I mean) 

4.     Q: can I have your contact details?

             A: Submissions@echovc.com

             Q: I need your personal details, I need to have that personal touch

             A: NO!

Please refrain from bringing that dry toasting line to an Investor meeting. While you think about this, notice the submission plug above? that’s where you send your pitch decks to. Come with your business cards and a crisp narrative about your business! 

Back to the point I was making earlier - we had a fantastic time meeting with the entrepreneurs who came in for the office hours. We ended up interested in 3 founders we met, and in our usual style we deliberated on these companies, bouncing ideas off each other, akin to a typically perfect day at the office. We like such meetings where we (investors) and the entrepreneurs are ending our conversations with a huge grin.

This is the start of something new, and we would encourage you all to look forward to our next Office hours, and plan to drop in.

We are always excited to see what industries the founders are playing in and how they are thinking about solving big problems.

There is much more coming from the EchoVC team so sit tight..

From the team at EchoVC, we want to say thank you for coming out and spending the day with us.

Our Investment in SystemOne – The Digital Backbone for Infectious Disease Diagnostics

Across Nigeria and many parts of Africa, patients walk into public hospitals to get tested for infectious diseases such as HIV and TB. Once the test results are available, they are manually recorded on paper and a local government supervisor does the rounds to collate these results and funnel them to state and national levels. This allows national health officials to understand the disease burden and ensure follow up and treatment of patients that test positive. The traditional test-diagnose-collate-distribute process usually takes more than 30 days by which time some patients have lost their lives or have already infected others.

This state of affairs creates a very significant problem and health risk. We are excited to announce our Series A investment in SystemOne (through our partnership with TPG Growth and TPG Rise Fund). Simply put, SystemOne is an infectious disease diagnostics company. The company’s  GxAlert® and Aspect® platforms ensure that the time and knowledge gap between diagnosis and reporting is closed by disseminating test results in real-time to clinicians, health ministries, regional/global health funders and patients. By providing health officials with instant notifications and up-to-date dashboards, SystemOne delivers real-time understanding and decision support for disease trends, device functionality, error rates and more.

SystemOne’s platforms are multi-device (including RDTs) and multi-disease such that health officials and funders can have single line-of-sight into all diseases across every diagnostic device in a region. The company has connected over 2,000 diagnostic devices in 40+ countries and has automatically transmitted over 5 million diagnostic results.

We liked SystemOne for several reasons – one of which was that it was solving a very large problem. $25.7bn is being spent annually on TB and HIV. However, the detection rates in places like Nigeria are still as low as 17% for TB. Millions of dollars are wasted in consumables such as MTB/RIF ultra-cartridges because of the lack of insight into inventory levels. Diagnostic devices are left inoperative for periods of time with patients left untested, because there are no mechanisms to alert senior health officials or device manufacturers. SystemOne provides insight for, and into, all the constituencies thereby generating more value for money and arming funders and national health officials with the necessary real-time data. The excitement we heard when we spoke to some of the customers was palpable – “We have been waiting for a solution like this!” The product-market fit has led to significantly low churn with many customers renewing after the end of their contract period.

The SystemOne solution is the only solution in this space that is uniquely designed for developing markets to address issues around power, data shortage, connectivity, technical know-how and language. The on-the-ground support also provided makes implementation and operation easy. 

SystemOne’s co-founder and CEO, Chris Macek previously founded Relyon Solutions, a company that developed large-scale software applications for government projects, the World Bank and universities. Along with his co-founders – Nicolas Boillot and Stefan Baumgartner – they have immersed themselves in this problem set and, with this Series A financing, they will be working on not just detecting but linking every positive diagnosis to treatment to help move the world steps closer to the attainment of the UN’s 90-90-90 goal.

We are very excited to welcome Chris, Nicolas, Stefan and team to the portfolio and grateful to partner with an incredibly driven group as they deliver global impact!  

Introducing Gro Intelligence

We like to say that we invest in elite founders who breathe, eat and dream about their product and have a very high-fidelity understanding of their market, the problems to be solved, and the job to be done. From a product perspective, we look to invest in blitzscaling companies focused on lubricating or completely eliminating market-facing friction in African markets and beyond.

When we met Sara Menker to learn more about Gro Intelligence, we had no doubt that she ticked these boxes, and more! Today, we are excited to announce that our strategic partnership with TPG Growth led a Series A-2 investment in Gro Intelligence. The funds will be used for product development, people and customer acquisition.  Eghosa Omoigui has joined the company's Board of Directors. 

Gro Intelligence disrupts the existing fragmented agricultural data research market by structuring the world’s agricultural data, organizing and transforming it into searchable information, offering cloud-based decision support and predictive analytics.

Prior to Gro, the agro-data world consisted, in part, of different types of players all seeking decision-making information. There are (a) teams of experts toggling between various technical software, spreadsheets, documents and messy, fragmented outputs; (b) farmers burdened with a plethora of multiple, disconnected data points which they struggle to interpret; (c) third-party intermediaries driving to farms, taking pictures and writing notes, or launching satellite infrastructure to capture and resell better geospatial data; (d) commodity traders paying millions for an information edge; and (e) governments and regulatory agencies creating and implementing policy as well as collating and publishing data that is so important that it can and does move commodity trading markets in an instant.

Fundamentally, every single agro-market participant wakes up every day trying to answer one fundamental question, viz., “How do all these [dynamic and volatile] trends (weather, policy, pricing, risk, demand, supply, regulations, finance, etc.) affect me and my business?”

In Q1 this year in the U.S., grains were piled on runways, parking lots and fields as a result of record highs in yield. Quite the opposite was true in Africa – half the continent experienced the worst harvest in three decades due to climate change. For example, in East Africa, droughts led to a 31% increase in the price of maize products. In both situations, Gro’s flagship product would have been the perfect tool for producers, consumers, governments and NGOs to analyse and understand the interaction of market forces, regulations and weather on production and yields. The Gro system generates yield forecasts analytics that predicts yields within a 2% error margin of the final reported yields, 5 months before official numbers are published. The system is already outperforming USDA forecasts and is available more frequently.

Gro’s use cases are endless. It provides farmers the key data they need to optimize production and gives CPG/FMCG companies the tools to optimize their supply chains and reduce waste. It enables governments and regulatory agencies to develop proactive policies to prevent stockpiles and shortages, gives NGOs access to data needed to achieve their goals of increasing food security and nutrition, and helps insurance industry participants price ag-related risks more accurately.

Gro’s founder once described the company’s objective as becoming the “single source of truth for the world’s global balance sheet for agriculture.” With Gro’s platform, what would take users days, weeks and sometimes even months, can now be done in a matter of minutes. We believe it should increase decision support efficiency by 7,200x!

The fourth agricultural revolution has digital agriculture at its center with regenerative and precision farming coming into near-term focus, with the world’s population expected to increase to 9.6bn by 2050, food production forecasted to rise by 60-70%, and arable land expected to decline significantly. Efficiency and yield maximization will therefore be key and access to quality and actionable data is absolutely crucial.

Agriculture is a $3-5 trillion market globally and we size the agriculture data opportunity as $50-100 billion. Accenture believes that by making data-based decisions, farmers can increase their income by $52bn through cost-cutting and yield-optimization. The proliferation of capital flows into this sector over the last couple of years is no surprise then, with investments like the recent $300 million acquisition of Granular by DuPont and the $900 million DTN acquisition.

Sara Menker is an exceptional entrepreneur that is deeply passionate about agriculture and its impact on people and markets. She was a commodities trader at Morgan Stanley in her previous life and experienced first-hand the pain points in ag-data research. The market crash in 2008 showed clearly how volatile a sector as essential as agriculture could be, which got her thinking more deeply about the future of agriculture. She went on every farm tour across the globe that she could find. Her firsthand experience of massive droughts in Africa in the eighties, made her even more obsessed about agriculture. Sara exemplifies the market and product obsession that is the EchoVC portfolio company founder.  

Separately, it is no secret that there has been a massive bias towards male founders in the tech space. The global percentage of women-founder venture-funded companies has been constant at 17% for over 5 years and even lower at 7% for later stage growth companies, the bulk of which have been in ecommerce and education. For African and Africa-focused women founders, the stats are even more bleak. As an extremely diverse VC firm (50% women), this wasn’t an ideal state of affairs. Thus, we have been extremely keen to fund elite [technical] female founders, and set funding a woman founder as a must-happen goal for this year. We can’t believe our good fortune!

We would be remiss if we didn’t give gigantic shout-outs to the Gro team (and their awesome interns, too).  Together, Sara, Sewit and Nemo have done a tremendous job of building an all-star cross-border team that truly believes in the vision of building a world-class agriculture data platform that, in time, should become the agro market’s daily habit.

We are super excited about Gro and cannot wait for the world to feel its impact. In partnership with our friends at TPG Growth/Satya Capital, we believe that Gro will completely revolutionize agriculture data for Africa and beyond. We look forward to working with Sara and the team and welcome them to the portfolio.

 

About Gro Intelligence

Gro Intelligence structures and contextualizes the world’s agricultural data, making complex analysis simple and accessible. Gro Intelligence’s flagship product, Gro, is a web-based product that pulls together global food and agriculture data and structures it into a common language using an ontology designed by Gro. Gro also offers a suite of machine learning models to forecast supply, demand, and environmental catastrophes. Gro enables users to extract insights and access predictive analytics at an unprecedented scale. Gro Intelligence has offices in New York City and Nairobi, Kenya. For more information, please visit: www.gro-intelligence.com

Introducing EchoVC+

When we started this journey back in 2011, it sounded crazy to everyone we spoke to.

"Why would you want to invest in African tech startups?"

"What kind of strategy is this?"

"Sounds like a triple bogey to me: seed, technology and Africa."

Yet, we persevered.

Our view was that Africa was significantly underserved in digital and that it was clear that traditional sectors such as agriculture, media, print, hospitality, transportation, education, financial services and commerce would be reimagined and reinvented by technology and the Internet. More importantly, solutions for the 99% could be deployed at scale.

The refactoring of Africa would be led by high-octane entrepreneurs that shrugged off the daily constraints that their peers in better developed markets could never imagine, and executed with a goal to serve the local micro-economies being underwritten by consumers and SMEs alike.

The entrepreneurs came with energy, a high-hustle quotient and a high-fidelity understanding of the markets they sought to serve. What they lacked was mentorship, finance and that bit of external validation that maybe, just maybe, they were onto something great.

'The funding gap' almost became a trite phrase, used at conferences to highlight the problem but with very little being done in real life to bridge the disconnect. We also recognized that the funding gap looked more like a chasm once anyone took a closer look.

So our strategy was to build a platform that would focus on serving the elite Africa-based technology entrepreneurs whose pleas for funding had mostly gone unheard. We identified three key segments that needed a valuable source of funding, mentorship and company-building assistance: 1) pre-seed opportunities ($50K) - super interesting founding teams that could be just short of product-market fit but for whom a small financing round would accelerate their quest for fit. 2) seed opportunities ($250-500K) - early but crystal clear product-market fit and small teams led by elite founders. 3) seed+ opportunities ($750K-$1M) - rapidly growing revenues and meaningful financing support needed to fund mini-scaling.

Curiously, as we built out our brand and expanded our network of elite founders, we were surprised to discover how often we got approached by tech companies that fell outside of our initial target segments. These Africa-focused companies were well on their way to real scale,  led by superstar founders and teams, and very wary of the local PE and PE-lite firms that are more prevalent on the continent. It was clear that our domain expertise in technology was uncommon and our prior multi-continent experience in investing in companies across various life-cycle stages from seed through growth meant that technology entrepreneurs repeatedly asked us to journey with them as they built 20-50 year companies.

So as part of our initial strategy, we identified the need for a vehicle that would support post-seed+ companies. This vehicle would offer financing of up to $10-15m per company and we would lead or participate in rounds as required. Not unlike our first vehicle, it took us a while to convince the market that there was a pressing and unmet need for it. 

As the managing partner of TPG Africa very eloquently put it in an op-ed for CNBC Africa:

"By 2050, our continent will be home to nearly half a billion people who have either just entered or are about to enter the labour force. Their talent and enthusiasm can be the motor to accelerate Africa’s development...[but]...good ideas are being wasted because the money is not there to back them while successful start-ups are being starved of the resources they need to grow. The good news is that there is a widespread recognition in Africa of just how important it is to do more to harness the entrepreneurial spirit in our continent. African governments along with international institutions such as the African Development Bank and World Bank and NGOs all have initiatives in place. There is also a big role for private equity to help fill the gap in funding. But if it is to have the impact needed the approach must be flexible, ready to back businesses of all sizes and across their entire life cycles. It has to think small as well as big and be focused on the long-term."

The sentiments echoed in the op-ed reflect our founding vision. While it is increasingly clear that it takes at least ten years to become an overnight entrepreneurial success in Africa, we are even more excited about the opportunities still ahead to find and invest in high-growth technology companies focused on building the next rev of Africa.

To enable us to continue executing on our vision, and in partnership with TPG/Satya, we are pleased to introduce EchoVC+ I, our first vehicle to support blitzscaling tech companies in Africa. We are also announcing our first EchoVC+ investment, in Frontier Car Group, which builds and runs used car marketplaces in emerging markets.

In support of our expansion, we are also thrilled to welcome some amazing folks to our team. They represent some of the very best talent available and bring a shared love for technology entrepreneurship and community building. We are incredibly grateful to everyone that has supported us so far as we execute on our mission to seed and syndicate entrepreneurial inspiration across Africa.

Our Investment in Frontier Car Group

 

We’re thrilled to announce that we recently co-led a $22 million investment into Frontier Car Group (‘FCG’), a visionary company that in 18 months has become a pioneering force in Africa’s technology industry. Launched just a year and a half ago, Frontier builds and runs tech-enabled used-car marketplaces enabling people to buy and sell cars safely and efficiently for a fair price in top tier emerging markets like Nigeria, where the car-sales market is often unstructured and riddled with preventable complexities.

At its roots, FCG is a purpose-built technology platform that ensures the complex nature of the used-car marketplace is streamlined from start to finish. Like many emerging markets, Nigeria’s used car market is plagued by alarming incidents of unwitting buyers purchasing stolen cars or unscrupulous sellers offering undisclosed-as-previously-damaged vehicles. In a market where most people are more likely to purchase a car without ever owning a home, thus making the auto purchase the most significant financial transaction in their lives, Frontier Car Group, through its current operating subsidiaries VendeNosTuAuto (Chile), VendeTuAuto (Mexico), CarFirst (Pakistan), Ototrink (Turkey) and Cars45 (now Nigeria’s largest car buying service), is on track to revolutionize how used automobile sales networks operate in emerging markets around the world.

Prior to FCG, there has been little to no innovation in the used car industry in Africa’s largest economy.  Market-wide challenges have historically included a high level of fragmentation in the industry, lack of technology infrastructure to capture efficiencies, long lead times (14-30 days per transaction vs. 45 minutes-72 hours for Cars45), information asymmetry, and unpleasant bartering dynamics with in-person dealer negotiations. We are firmly of the view that organizing this very fragmented market while eliminating friction and unnecessary complexity should produce tremendous value and introduce market-wide trust infrastructureto all the local market participants, with the added benefit of creating more quality jobs in the local automotive industry and its adjacencies.

Currently, Nigeria’s used car market is extremely fragmented with 99% of transactions occurring on inefficient communication channels such as POTS, WhatsApp and BBM. Cars45 aims to solve many issues with the current model by sourcing verified cars from millions of individual consumers while selling quickly to a large, robust network of verified used car buyers.  The company operates a rapidly growing network of inspection centers where customers who wish to sell their cars can get a quick valuation, inspection, certification and decision within 45 minutes.  Cars45 offers an end-to-end technology solution that eliminates a very significant amount of friction in the purchase, sale and certification of used cars. In doing so, we have seen how much value is created for market participants while reducing the workload of, and generating revenue for, relevant government agencies. Even more significantly, the business opportunities generated by the injection of material liquidity into the marketplace are creating new jobs across the automotive industry.

Headquartered in Berlin, FCG ramped up its operations in a very short period of time and is now overseeing established high-growth businesses in Mexico, Chile, Turkey, and Pakistan, in addition to Nigeria. The team currently employs 200 people across its network and plans to continue expanding.

CEO and co-founder Sujay Tyle has proven himself to be an unstoppable force of nature and a monster fundraiser! Prior to founding Frontier Car Group, he was a partner at Kingsway Capital, a London-based emerging markets-focused hedge fund. Previously, he was on the founding team of Hired.com (a talent marketplace) as its COO, where he helped set a strong foundation for entering and operating in global markets. Sujay has shown time and again his talent for finding strong partners.  His intellect and natural leadership qualities were on early display as he was admitted to Harvard at the age of 15. As a recipient of the prestigious Thiel Fellowship, a member of the 2012 Forbes 30 Under 30 class and one of Goldman Sachs’ Top 100 intriguing entrepreneurs, the combination of Sujay’s impressive achievements and entrepreneurial acumen created a very potent attractant.

As one of our five key investment theses, we look for elite entrepreneurs powering tech-enabled products and services we call “lubricants,” that oil the frictions in our day-to-day lives. Sujay, along with his co-founders Peter and Andre, fit the bill and exemplify the conviction, tenacity and intellect we look for. Importantly, they have partnered with a team of elite local operators in diverse emerging markets. Cars45 CEO, Etop Ikpe, is one of the elite operators driving FCG’s meteoric growth and was, in no small measure, also key to our decision-making process for this opportunity. We had been thisclose to investing in him and his DealDey team and while that opportunity eventually did not materialize, we came away strongly impressed by his entrepreneurial and operational skills and his unique ability to get skeptics and believers to follow him. After he led the sale of DealDey to Ringier Africa, we told him that we would fund whatever startup opportunity he chose to pursue next. We are honored that we were FCG’s sole choice to be their Africa-focused institutional investor. This background is important because I will always be grateful to Etop, Sujay and Peter for sharing this opportunity at a time of great personal grief for me, thus helping me maintain some semblance of normalcy and sanity. As I repeatedly told Etop, who STILL can’t believe we got the deal done despite my personal circumstances, “We told you we would fund your next startup and we meant it.”

EchoVC+, our previously unannounced growth-stage vehicle, is excited to partner with Sujay, Peter, Andre, Etop and the entire FCG team to address one of the largest offline commerce opportunities in Nigeria and beyond. As an active Africa-focused local investor dedicated to funding high-octane entrepreneurs and concurrently attracting foreign investors to participate in the growth of local SME micro-economies, we see Cars45 as being representative of Nigeria’s, and indeed Africa’s, SME-powered digital infrastructure.

We look forward to working closely with Sujay, Peter, Andre and Etop as they continue their high-octane mission to improve automotive sales in emerging markets around the world.