Harambe Entrepreneur Alliance has allocated about $100,000 each to two Nigerian tech startups Max.ng, a taxi-hailing service, and Releaf Group, a platform for sorting and distribution farm products, to help them through economic downturns caused by the Coronavirus pandemic.
This was disclosed by the Harambe Chairman, Okendo Lewis-Gayle, in a telephone interview, according to Bloomberg
Meanwhile, Harambe, whose backers include Cisco Systems Inc. and a foundation of South African businessman Jonathan Oppenheimer, raised $1 million to support its African technology startups and help kick-start the return of venture capital to the continent after the coronavirus outbreak.
Details: It invested $100,000 equity financing in Metro Africa Xpress (MAX). The company was co-founded by Adetayo Bamiduro.
Harambe also invested $100,000 debt funding in Releaf Group, a Nigerian agritech company that is using technology to address supply chain challenges in the agriculture industry. The startup was co-founded by two Harambeans, Emmanuel Udotong and Ikenna Nzewi.
“What we suspect is 70% to 80% of non-VC backed startups could vanish over the next three to six months. What this moment requires us to do is to begin to reimagine our business model [and] repurpose our assets.”
“As innovators, this is what we do and now have to do so with an added sense of urgency. The capital markets have frozen up. We are hoping to create a domino effect in terms of investment in African startups,” Chairman, Harambe, Okendo Lewis-Gayle said.
Based in the U.S. Harambe-founded companies raised more than $500 million from prominent families, individuals and international companies to support African entrepreneurs. Its list of past investors has included Mark Zuckerberg, Jack Ma and Bill Gates.
Venture capital across the world has been drying up, with deals down 23% during the first quarter of the year compared with 2019, according to Preqin Ltd., as investors and funds take a more cautious approach amid the pandemic.
According to him, Africa is no exception, despite being less affected by the virus than Europe and North America. About half of Harambe’s companies expect the financial impact to become critical in the next three months, Lewis-Gayle said.
“The group has almost 300 members that could potentially apply for funding,” he said. “The funding works in a co-investment model, whereby its ventures must also attract interest from other investors.
“We are expecting them to adapt. For example, Max has decided to also include home-deliveries of goods as part of its service, and actually delivers for free to the elderly population.”
Founded in 2008 by Okendo Lewis-Gayle, Harambe Entrepreneur Alliance supports innovators developing solutions to problems on the African continent. It as an ecosystem that enables founders to learn from each other and grow together.
“One of the challenges of the African entrepreneurial ecosystem is that it is still in its early days. Therefore, we don’t quite have enough investors, enough experienced talent for the different parts of the venture,” he added.