African founders looking for early-stage startup funding may consider pitching Launch Africa Ventures, one of the continent’s most active pan-African venture capital firms.

Launch Africa Ventures invests in technology and technology-enabled startups with their main teams and operations in Africa. The firm focuses on companies that have moved beyond an untested idea and are developing scalable solutions for large African markets.

Unlike a grant, Launch Africa funding is an investment. The firm typically invests through equity or SAFE notes that later convert into equity. Founders should therefore expect due diligence, valuation discussions and ownership negotiations as part of the investment process.

What Is Launch Africa Ventures?

Launch Africa Ventures was founded in 2020 to address the financing gap faced by African startups between seed and Series A funding.

The firm’s first fund raised approximately $36 million and invested about $31 million in 133 startups across 22 countries. Its wider portfolio has grown to include more than 150 African technology startups.

Launch Africa is currently deploying its second fund. Information published on the firm’s website indicates that Fund II generally targets B2B and B2B2C startups with investment tickets of approximately $250,000 to $500,000, although the amount offered to an individual company will depend on its stage, traction and financing round.

What Startup Stages Does Launch Africa Invest In?

Launch Africa considers companies at the following stages:

• Pre-seed;
• Seed;
• Pre-Series A;
• Series A.

The fund is particularly interested in businesses that could become ready for a larger $3 million to $5 million Series A round within 12 to 24 months of receiving its investment.

This means founders should be able to demonstrate how Launch Africa’s capital will help them reach the next major financing milestone. The pitch should connect the requested investment to customer growth, product development, geographic expansion, profitability or another measurable objective.

Which Sectors Does Launch Africa Fund?

Launch Africa is a multi-sector investor. Its areas of interest include:

• Fintech;
• Healthtech;
• Agritech;
• Climate technology;
• Edtech;
• E-commerce;
• Logistics, transport and mobility;
• Software as a service;
• Artificial intelligence;
• Big data and analytics.

The firm does not invest in gambling, weapons, adult entertainment, extractive industries and other sectors prohibited by its limited partners.

Previous investments include Nigerian digital bank Kuda, Tunisian education technology company GOMYCODE and Kenyan B2B commerce company MarketForce.

What Does Launch Africa Look for in a Startup?

Launch Africa prefers B2B and B2B2C companies over purely consumer-focused businesses. The fund is especially interested in startups that have completed successful pilots, signed corporate partnerships or demonstrated that customers are willing to pay for their solution.

Its current guidance says it prefers startups generating at least $25,000 in net monthly recurring revenue and growing by at least 10% month-on-month. However, the firm may consider earlier businesses where the technology or intellectual property is unusually strong.

The startup’s core operations and team should be based in Africa. The company should also have a credible plan to expand beyond its home market within approximately 12 months of investment.

A strong founding team will usually combine relevant sector knowledge, local market experience, execution ability and a clear understanding of the company’s financial model.

What Support Does Launch Africa Provide?

Launch Africa offers more than investment capital. Its team supports portfolio companies with:

• Fundraising preparation;
• Governance;
• Recruitment;
• Business operations;
• Diversity, equity and inclusion;
• Market expansion;
• Corporate introductions;
• Access to legal, accounting, human-resources and marketing support.

This support can be valuable for founders preparing to enter new African markets or raise a larger institutional funding round.

How to Improve Your Launch Africa Pitch

Your pitch deck should clearly explain the problem, target customer, market opportunity and why your solution is difficult to copy.

Include current revenue, month-on-month growth, customer retention, gross margin, acquisition costs and burn rate where applicable. You should also show how much funding you are raising, how the money will be used and what milestones the company expects to reach.

Launch Africa specifically encourages founders to highlight traction, the path to profitability, expansion plans, major risks, future funding requirements and why the team is qualified to execute the strategy.

Launch Africa Investment Process

Launch Africa states that it reviews between 200 and 400 deals each month. Its process generally takes six to eight weeks from the initial discussion to completing an investment.

After an online submission, the team says it aims to contact suitable companies within about two weeks. Not receiving a reply may mean the company does not currently match the fund’s investment criteria.

Official Launch Africa Application Link

Submit your startup to Launch Africa Ventures

Founders can also review the Launch Africa investment criteria before submitting their pitch.