Gates-funded accelerator invests $200k in African start-ups
US-based fintech accelerator Digital Financial Services Lab (DFS Lab) will invest $200 000 in four African fintech start-ups.
The company is funded by a $4.8 million three-year grant from the Bill and Melinda Gates Foundation. DFS Lab seeks to identify promising entrepreneurs and invest in companies that focus on consumers in Sub-Saharan Africa and Asia.
The four start-ups, which are building financial service products for low-income and unbanked consumers in developing markets, include Nobuntu (SA), Cherehani Africa (Kenya) and Nala (US).
The fourth start-up, a Kenyan digital lender, is still in "stealth mode" and its identity was not disclosed.
Cherehani Africa is leveraging mobile-based technology to provide credit and distribute personalised financial literacy content to women and adolescent girls who own micro-enterprises.
NALA is building a Venmo-like interface to create a single, unified wallet for Tanzanian smartphone users. Nobuntu is a community-minded savings product designed to help South Africans prepare for their old age.
In addition to financing, the selected companies will receive six months of intensive mentorship and integration into a global network of top experts who have agreed to advise them, says DFS Lab.
"We are excited to have the opportunity to invest in companies that are creating products that will improve, simplify, and enrich people's lives, said DFS Lab director Jake Kendall.
"Our current set of portfolio companies are using technology to create solutions for low-income and unbanked populations, providing high-impact advancement. We look forward to seeing these
companies grow and encourage others to look at Africa and Asia for investment opportunities."
According to a Disrupt Africa report, there were 301 active African fintech start-ups in 2017, following a boom in fintech start-ups launching over the last two years in particular.
While SA, Nigeria and Kenya remain at the forefront of start-up activity in the fintech sector, a number of other regional fintech ecosystems are beginning to emerge, it adds.
Dominique Collett, a senior investment executive at Rand Merchant Investments and head of AlphaCode, points out that in 2016, $5.5 billion of venture capital investment went into payments start-ups. This represented 22% of global fintech investment activity.
Since launching in 2015, DFS Lab has now invested more $1.2 million in African and Asian fintech start-ups.