MENA VC Flat6Labs’ new fund to support startups in East, West Africa

Flat6Labs is among the most active VCs in Africa, having invested in over 100 startups in the Middle East and North Africa (MENA) region to date. And now, after 11 years, the Egypt-based accelerator is embarking on a foray into East and West Africa through a $95 million Africa Seed Fund investment vehicle, which will mark its first venture outside of MENA.

“We are embarking on a new phase for the organization by expanding into sub-Saharan Africa through the Africa Seed Fund,” company CEO Ramez El-Serafy told TechCrunch, adding that the expansion will be gradual with two-thirds of its allocations. going further to North African enterprises. Flat6Labs is considering an initial shutdown before the end of the year.

“We are adding Kenya and neighboring markets in East Africa and the Anglophone and Francophone parts of West Africa, including Nigeria, Senegal, Côte d’Ivoire, Ghana and Cameroon,” El-Serafy said.

Flat6Labs, also a seed accelerator, previously managed country-specific funds, including a $10 million Anava seed fund for Tunisian startups, and is just now running a multi-country startup fund.

“As the markets in the region mature a bit, it makes sense to start looking at cohesive regions in terms of average purchasing power and opportunity – the products you see being created in these markets are very similar and easy to grab from one country to another,” said Flat6Labs CIO Dina El-Shenoufy.

Flat6Labs’ $95 million seed fund for Africa is sector agnostic

The fund is sector agnostic and intends to invest in fintechs, healthcare technology, logistics, mobility, cleantech, agtech, retail and e-commerce startups.

Flat6Labs will invest between $150,000 and $400,000 and make follow-on investments of up to $500,000 to ensure continued support for startups. Has invested between $30,000 and $100,000 in previous funds.

“We provide the capital, but there is huge value in how we work with the company because of how we position ourselves as an institutional co-founder of the company, helping them start the company, register it and give them access to networks. We are one of the few North African players expanding into Southern Africa, so that is also something that adds a lot of value when it comes to our geographic exposure,” said El-Serafy.

The cohort, he says, will have founders from different regions, creating an opportunity for individuals from different cultures and backgrounds to interact, share ideas, work together and gain the opportunity to tap into new markets. Flat6Labs will admit 10 to 15 startups every six months into its seed program. The accelerator plans to back up to 170 startups over the next five years.

“About 60 percent of the vetting will probably be vetting that happens in conjunction with the (seed) program, while the rest will be direct vetting for more mature founders,” El-Shenoufy said.

Flat6Labs, which claims to have $100 million in assets under management, was founded in Egypt and over the years has implemented multiple country-specific funds and accelerator programs with partners in seven countries, including Saudi Arabia, United Arab Emirates and Lebanon.

Some of its previous fund partners include International Finance Corporation (IFC), SME Development Agency, Egypt Ventures and Egyptian American Enterprise Fund.

With the new program, the accelerator hopes to be part of the support African startups need, especially as a result of a difficult fundraising environment.

“We are very excited about Africa, it is one of the fastest growing markets in the world. It is very unique in terms of its young population and the need for technology to solve many of the challenges we face on the continent. It makes a lot of sense for us as an organization to expand south,” said El-Serafy.

“We also know emerging markets very well. I have worked in the Middle East for the past 11 years, investing in founders in the midst of revolutions such as the Arab Spring. It’s amazing to work with all these founders and support them in these times,” he said.

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