Early-stage venture capital firm, Microtraction, has raised $15 million in its second funding.
Microtraction invests in African startups in the early and pre-seed stage, and plans to invest up to $100,000 in 60 African startups. The firm also plans to follow-up on 20% of the firms they invest in, in their next fundraise.
The VC firm has previously invested in 19 firms spread across four countries: Nigeria, Ghana, Kenya, and Rwanda. The recipients of Microtraction’s investments are spread across different sectors – fintech, health tech, SaaS, edtech, crypto, gaming and mobility.
Microtraction was founded in 2017 by Kwamena Afful, and Yele Bademosi. In 2020, the firm offered $25,000 for 7%, but has increased it’s offer to $100,000 for the same 7% stake. In an interview with TechCrunch, Yele Bademosi highlights how Microtraction has been faring with the likes of YC also offering similar offerings.
“People want to get into YC to raise money post YC. So what we’ve done with Microtraction is not just build this community of investors and LPs locally and globally. We also have a broader network of VC funds now, looking at the companies we’re backing, our thesis, strategy, etc. So, we’ve gone from like people seeing us as a pre-YC fund or pipeline to us investing in the best early-stage companies, and then local and global investors looking closely at the deals and following on where there is a fit for them,” Badamosi said.
“I think it’s very important to highlight the last part Yele mentioned because it’s one of the reasons we have taken our approach. We speak to many global investors almost daily, trying to understand the ecosystem. Many people that invest in African companies tend to go to an accelerator, Demo days, etc. People want direct access to Africa without having to go to accelerators. Things are changing,” Partner, Dayo Koleowo added.
The investment firm also noted that it has 30 venture-backed founders of African companies as LPs in its latest community funds. These founders include: Helicarrier’s Ire Aderinokun, Paystack’s Shola Akinlade, Cowrywise’s Razaq Ahmed, 54gene’s Francis Osifo, Piggyvest’s Odun Eweniyi Paga’s Jay Alabraba, Spleet’s Tola Adesanmi and Float’s Jesse Ghansah.
Other LPs are General Patners of VC funds like Ribbit Capital’s Micky Malka, Hustle Fund’s Elizabeth Yin, Sebastes Capital’s Jason Fish, a16z’s David Haber, Y Combinator’s Michael Seibel, 776’s Alexis Ohanian, Bonow Ventures’ Tilo Bonow, Precursor Ventures’ Charles Hudson, Better Tomorrow Ventures’ Sheel Mohnot and Broadhaven Ventures’ Michael Sidgmore.
Microtraction is also venturing into web3, and is setting up an invite-only community where social tokens will be used to incentivize and gamify the experience of members who provide value-add and support to the fund and founders.