UNCAP rolls out €30mn fund to drive early stage SME growth in Africa

The African start-up landscape continues to attract global investors, with Uncap introducing Unconventional Capital, a €30 million fund dedicated to providing non-dilutive, revenue-based financing to early-stage small and medium-sized enterprises (SMEs) across Africa. CNBC Africa's Aby Agina engaged in a conversation with Esther Ndeti, Investment Principal at Unconventional Capital, to delve deeper into the fund's impact and future prospects. The fund aims to serve as a lifeline for early growth businesses that often struggle to secure funding from traditional financial institutions. Ndeti highlighted the challenges faced by these businesses, such as lack of assets for collateral and not fitting the high-tech, high-growth model sought by conventional investors. Unconventional Capital offers a solution by providing non-dilutive, revenue-based financing, enabling startups to access capital without compromising equity or burdening themselves with unsustainable debt. This approach allows businesses to scale while retaining full control, bridging the gap between capital access and sustainable growth. Esther Ndeti shared insights on the fund's future trajectory, emphasizing the significant funding needs across the African market. With plans to scale the fund and expand its geographic footprint, Unconventional Capital aims to attract additional investors and demonstrate the effectiveness of revenue-based financing in fostering SME growth in Africa. Leveraging technology to streamline processes and reach more SMEs, the fund envisions a future where alternative financing models tailored to African businesses will proliferate, addressing the pressing capital gap on the continent. Discussing the emerging trends in the African market, Ndeti expressed optimism about the rise of diverse financing solutions aligned with the unique challenges and opportunities within the entrepreneurial landscape. While acknowledging the vast capital gap in financing African businesses, she emphasized the need for innovative approaches to bridge this divide and support SMEs effectively. By diversifying across sectors and geographies and conducting thorough due diligence, Unconventional Capital mitigates risks associated with macroeconomic instability and financial literacy challenges. Looking ahead, Ndeti painted a positive picture of Africa's startup ecosystem, positioning it as a hub of innovation and growth with immense potential for investors. She encouraged boldness and resilience within the entrepreneurial community, underscoring the value of taking risks, solving problems, and scaling solutions. Investors were urged to seize the opportunities presented by the African market, recognizing the dual value proposition of financial returns and impactful contributions. As Unconventional Capital endeavors to catalyze Africa's potential, stakeholders were invited to participate in shaping the continent's entrepreneurial landscape. In conclusion, the launch of Unconventional Capital's €30 million fund signifies a promising chapter in Africa's SME sector, offering a tailored financing solution that empowers early-stage businesses and propels sustainable growth across the continent.