Meet the Investor: John Masanda, FasterCapital

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“At FasterCapital, we believe that there is a great unexplored potential in the market that most incubators and accelerators ignore or overlook.”

So says John Masanda, regional partner for Africa of the Dubai-based virtual incubator and investor FasterCapital.

“Most accelerators focus on good developers or fresh graduates who can build a technical startup, but they either totally ignore the fact that there are lot of non-technical entrepreneurs who would like to build their online startup but can’t get into any accelerator or underestimate the team size needed to build an internet startup nowadays.”

FasterCapital assists people like this, providing technical development in return for some equity, thus lowering the amount of funding a startup has to raise from investors.

“We come in as an investor from early stage and provide our development for equity,” Masanda said.

It has been pretty busy. Launched in 2010, FasterCapital runs acceleration and incubation programmes. It currently has 18 incubated startups that have graduated and are fully functional, more than 180 startups in the acceleration programme, and more than 120 regional partners with 80 offices worldwide. Kenya’s Edupay, Nigeria’s WaraCake and Tunisia’s Bobbli are among the African startups in its portfolio.

It calls for applications every quarter, with one round currently open, and will increase pool of startups and investors over the course of 2017. Funding comes from a network of investors, with FasterCapital having already raised more than US$35 million to help finance its business and the incubated startups.

Masanda said the company seeks two types of investors.

“The core-level investors are the investors who will be directly investing in FasterCapital and might join the board of directors provided their investment is high,” he said.

“The startup level investors are those investors who are ready to invest in one or more startups of their choice. Early-stage investments can be risky, but also offer bigger equity stake for the investors. The initial seed stage is about US$50,000 to US$500,000.”

Though global, the company has a particular interest in the African tech scene.

“The tech space in Africa is on a growth path, there are exciting and innovative ideas streaming through. The growth of economies and population presents a market to consume products and services via mobile telephony and internet access too,” Masanda said.

“We believe that many challenges in Africa can only be solved by African entrepreneurs. One can’t expect to import all technology from the west. Our goal is to help those entrepreneurs in Africa who have ideas to solve local problems.”

However, these startups typically lack mentorship and funding.

“There is need for the ecosystem to be structured to provide soft skills, technical skills and requisite funding,” he said.

Masanda said policymakers were helping tech startups to some extent through laws and regulations, but were yet to make a real impact on the space.

“Policymakers continued engagement with stakeholders and borrowing best practices will sustain growth and scale-up of our startups to be future corporations,” he said.

“Investor interest in Africa is evidently growing across all sectors – governments, corporations, and startups too. African economies and populations are growing and adopting new technologies and products, thus becoming an assured emerging market with purchasing power.”

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent’s most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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