Angels Ventures, business accelerator and venture fund, launches in Uganda

Uganda Tech entrepreneurs have another reason to smile after Angels Ventures Fund (AVF) began operations in the country earlier this year joining the Mara Launch Fund, to be the second in the country.

Joachim Ewechu, Chief of Business Operations, Angels Finance Corporation, the firm behind AVF, told HumanIPO that Angels Ventures is an entrepreneur-centric business accelerator and venture capital fund focused on the commercialization of high growth innovative market-driven businesses.

Joachim says the fund also supports the growth of scalable social impact businesses to solve identifiable social problems in areas of technology, communication, health, education, financial inclusion, housing and other sectors in emerging markets in Africa.

The fund will be running a 6-week business acceleration program twice a year for top 25 entrepreneurs to scale their businesses towards further commercialization.

Kitties and Pools

The program brings together entrepreneurs, mentors, consultants, professionals, corporate companies to give the startups business experience and mentorship. They will also engage support from key government bodies and capital partners. They are already in partnership with Mara Launchpad, offering working space for their entrepreneurs in Kampala.

Angels Ventures will invest between US$5000 to US$20,000 for the early seed stage financing. It shall then be investing between US$10,000 to US$100,000 as expansion capital for companies invested after the early stage level more as convertible debt than equity.

AVF’s convertible equity position is 10 percent into those companies they will invest in.

The larger AFC enables entrepreneurs access managerial support, business and entrepreneur training, early capital with private investors and venture capital funds sourced both locally and internationally.

“We are launching because we believe supporting entrepreneurship and business development is most effective way to solve the challenges we face in Africa and the world today” said George Bakka, CEO, AFC.

“We have realized out of our own development that capital always searches for the right opportunity and often flows out of built and developed relationships. Through Angels Ventures, we are bridging this critical gap and need for all innovative entrepreneurs,” say Ewechu.

Alliances and Branchouts

Angels Ventures is the business acceleration and venture capital arm of Angels Finance Corporation (AFC). Angels Ventures capital injections are from the parent company, Angels Finance Cooperation and one private investor, Sheel Tyle, Founder of S2 Capital, which is a seed stage fund that invests into social enterprises in the developing world.

According to Ewechu the Global Entrepreneurship Monitor (GEM) ranks Uganda as one of the countries with the highest rates of entrepreneurship. However, more than 70 percent of the businesses collapse within the first two years.

This is because of lack of access to business support infrastructure in form of early stage financing, mentorship and business management, he says.

He adds that the country’s unemployment rate at more than 60 percent is high motivator for entrepreneurship.

Already Angels Ventures Fund has selected 20 innovative companies for its acceleration program. Prior, Angels Ventures had done four convertible debt investments into five companies in the energy, agriculture, construction and consumer goods sector.

Black Eye

One common challenge he says was the lack of viability in the many ideas forwarded by entrepreneurs in their applications.

Ewechu explained to HumanIPO that many of them lack viable business models around their innovations and fail to attract venture capital.

“The angel investing sector is still small and close to non-existent. We are thus looking to a time before we can convince some possible angel investors to also invest in such young companies,” he said.

“We have not yet a developed IPO or acquisitions market that one would base on to develop valuations for early stage companies or develop exit options”, he says.

Interested entrepreneurs can file their applications for this year’s first program at Afcuganda.com.

Similar Programs

Similar initiatives are ongoing in Africa. 88mph, Africa’s leading accelerator program providing early-stage Kenyan tech companies with mentorship and funding, last week Monday pioneered the continent’s first intense 3-month accelerator program – inspired by Y Combinator – investing another minimum of US$200,000 spread across 8-15 startups. Startups can apply at 88mph.ac. Applications are currently open and close on August 15.

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