AFRICA – Pre-seed VC fund and accelerator, Catalyst Fund has raised US$8.6 million towards a target US$40 million fund to back high-impact tech startups working to improve the resilience of underserved, climate-vulnerable communities in Africa.
This funding round was backed by FSD Africa Investments (FSDAi), Cisco Foundation, USAID Prosper Africa, and tech investor Andrew Bredenkamp.
While the primary mission of the Catalyst Fund is to fuel the growth of climate-focused startups across the African continent, the fund is poised to invest in other sectors, encompassing agtech, insurtech, climate fintech.
It also targets startups engaged in fishery management, food systems, cold chain logistics, waste management, and water resource management.
Having cast its net wide, this pan-African fund is particularly keen on supporting pre-seed startups. Thus far, it has already extended its support to ten startups from six different countries, including Egypt, Senegal, and Morocco.
The Catalyst Fund’s forward-looking strategy envisions investments in 20 startups during the current year and a total of 40 startups in the long run.
For pre-seed startups, the Catalyst Fund offers an initial investment of US$200,000, follow-on investments of up to US$500,000 at the seed stage, and US$1.5 million in series A rounds.
Maelis Carraro, Managing Partner at Catalyst Fund, shed light on their approach, stating: “Overall, having exposure of about US$2.2 million for each startup makes sense because we are coming in super early to be the early catalyzer for other investors to come in.
“The instrument we use at the pre-seed stage is a standard SAFE (simple agreement for future equity).”
Earlier this year, Catalyst Fund invested US$2 million investment into 10 startups accelerating Africa’s adaptation and resilience to climate change.
This was the inaugural cohort of a US$30 million VC fund that is anchored by FSD Africa, a financial sector development agency. Each of the 10 startups was offered US$100,000 of equity investments as well as US$100,000 of hands-on venture-building support.
“Despite climate change being a global reality, Africa is the most vulnerable continent to its adverse effects, even though the region contributes a mere 3% to global CO2 emissions,” says Maxime Bayen, Catalyst Fund’s operating partner.
“I strongly believe that startups and entrepreneurs, in general, will be a critical part of the solution in making the continent more resilient to the negative effects of climate change.”
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