Flat6Labs is among the most active VCs in Africa, having invested in over a hundred startups to date, in the Middle East and North Africa (MENA) region. And now, after 11 years, the Egypt-based seed-stage accelerator is embarking on a foray into East and West Africa through a $95 million investment vehicle from the Africa Seed Fund that 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,” said the company’s chief executive. Ramez El Serafy he told TechCrunch, adding that the expansion will be gradual, with two-thirds of its allocations still going to companies in North Africa. Flat6Labs is considering an initial shutdown before the end of the year.
“We are adding Kenya and its neighboring markets in East Africa, and the Anglophone and Francophone sides of West Africa, including Nigeria, Senegal, Ivory Coast, Ghana and Cameroon,” El-Serafy said.
Flat6Labs, also a seed accelerator, has previously managed country-specific funds, including a $10 million Anava Seed Fund for Tunisian startups, and is only now managing a fund for startups in multiple countries.
“With markets across the region maturing a bit, it makes sense that we start looking for cohesive regions in terms of average purchasing power and opportunities – the products you see being created in these markets are very similar and easy to take from one country. to another,” said the CIO of Flat6Labs Dina El Shenoufy.
Flat6Labs $95 million Africa Seed Fund is sector agnostic
The fund is sector agnostic and plans to invest in fintech, healthtech, 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. You invested between $30,000 and $100,000 in prior funds.
“We provide the capital, but there is great value in terms of how we work with the company because of how we position ourselves as the institutional co-founders of the company by helping them set up the company, register it and provide access to our networks. We are one of the few players in North Africa expanding into South Africa, so this is also something that adds a lot of value as far as our geographic exposure is concerned,” El-Serafy said.
The cohort, he says, will have founders from different regions, creating an opportunity for people from different cultures and backgrounds to interact, share ideas, work together and gain the opportunity to tap into new markets. Flat6Labs will admit 10-15 startups every six months into its seed program. The accelerator plans to support up to 170 startups over the next five years.
El-Shenoufy said: “About 60 percent of the checks will probably be checks that happen along with the [seed] while the rest will be direct checks for more mature founders”.
Claiming to have $100 million in assets under management, Flat6Labs was founded in Egypt and over the years has implemented various country-specific funds and accelerator programs with partners in seven countries, including Saudi Arabia, the United Arab Emirates and Lebanon.
Some of its previous fund partners include the International Finance Corporation (IFC), the MSME Development Agency, Egypt Ventures, and the Egyptian American Business Fund.
With the new program, the accelerator hopes to be part of the support needed by startups in Africa, especially in the wake 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 also makes a lot of sense for us as an organization to expand south,” El-Serafy said.
“We also know emerging markets very well. I have been working in the Middle East for the last 11 years investing in founders in the midst of revolutions like the Arab Spring. It’s amazing to work with all these founders and support them during these times,” he said.
