Unconventional Capital has unveiled a Ksh 4.3 billion (€30m) fund to provide non-dilutive, revenue-based financing to early-stage small and medium-sized enterprises (SMEs) across Africa.
Uncap says this model of funding provides more flexible funding options for African businesses navigating early-stage challenges in order to reach their full potential.
According to Uncap Managing Partner Esther Ndeti, the fund seeks to redefine SME financing by creating an environment where more businesses can thrive in underserved markets and contribute to sustainable economic growth across the continent.
“SMEs account for about 90pc of African businesses, yet they face many challenges in raising capital. The inefficiency of African capital markets in effectively supporting SMEs, coupled with limited visibility to a broad investor base, continues to hinder access to essential funding for small and medium-sized enterprises across the continent,” said Ndeti.
Uncap targets to support high-potential businesses driving economic growth in critical sectors such as agriculture, trade, logistics, climate resilience, and financial inclusion.
“Over the past three years, we’ve championed innovative, alternative financing for African businesses. We hope this Fund will address capital gaps for early-stage SMEs as they scale, deepening our impact. In the end, we want to not only support more businesses but also set new standards in the industry for innovation and inclusion,” added Ndeti.
Unconventional Capital will collaborate with key partners, including SAIS, an ag-tech initiative funded by the German Federal Ministry for Economic Cooperation & Development (BMZ) and implemented by GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH), as well as O-Farms, a circular agriculture program run by Bopinc and funded by the Ikea Foundation.
Additionally, Uncap has separated its financial operations from its proprietary technology platform, Level, a stand-alone SaaS platform designed to simplify investment management for funders and accelerators across Africa. This will help focus on delivering tailored financing solutions while expanding its tech-driven investment support services, Uncap stated.
The new fund which will be led by Uncap Investment Principal Esther Ndeti, and Uncap Chief Executive Officer Franziska Reh has attracted the backing of global institutions such as the Bill & Melinda Gates Foundation and the Bayer Foundation.
