Pangea Trust, through its Connect Equity crowdfunding platform, is unlocking diaspora remittance flows as a source of funding for early stage and growth start-ups in Africa.
Remittances to sub-Saharan Africa reached $45 billion last year, with Nigeria, Ghana, Kenya, Senegal and Zimbabwe topping the list of recipient countries.
And as annual inflows grow, Anne Lawi, Country Director and CEO of Pangea Trust, an East African accelerator and investment platform, told TechCrunch that diaspora remittances can be leveraged to increase the amount of funds. injected into new companies. Startups in Africa raised nearly $5 billion in funding last year, but the amount remains scant compared to the rest of the world.
“While the amount of funds invested in startups in Africa has grown over the years, it still pales in comparison to the need. And that is why we are working to unlock diaspora remittances as a source of financing,” Lawi said.
“And because we’re also an accelerator, we’ve created and validated an approach that helps us identify investable businesses…we’ve also created structures that help angel investors invest in these businesses alongside venture capitalists. “, said.
However, a change of perspective is required for this to happen and that is why Pangea, working in partnership with the Swedish International Development Cooperation Agency and the Kenya Diaspora Alliance, Since last year, it has organized a series of events aimed at educating those in the diaspora on why startups are good investment options.
After making the initial public call for its first cohort last year, Pangea vetted and onboarded nine startups that met various criteria, including high growth potential and long-term goals aligned with the Sustainable Development Goals. All nine have capital investment needs of between $25,000 and $100,000.
By the end of the fundraiser, Pangea will have connected the startups to $320,000 of diaspora funding, with the additional goal of raising $1 million from the same sources by the end of the year.
Startups participating in seed fundraising include Grow Agric, which connects farmers with working capital; Ai Care, a SaaS insurtech; Baridi, an off-grid solar preservation business that addresses the problem of post-harvest losses; Damu sasa, a blood service information management system; Ambulex, which brings emergency health care solutions to low-income communities; Funke Science, an e-learning platform for science courses; Kiri EV, manufacturers of electric scooters; Rabbii Teecha, which offers an individual registration service; and Benacare, a link to home nursing services.
All of the aforementioned startups are founded in Kenya, but others from Ethiopia and Somalia will receive support during the pilot phase, with plans to scale to five more countries, including Rwanda, Tanzania and Zimbabwe over the next year.