Africa-focused investment club NewGenAngels is raising a fund of US$1 million in order to invest in up to 10 Africa-focused startups over the next 18 months.
NewGenAngels is looking for 100 angel investors to commit US$10,000 each to the NewGenFund1, and says the goal is to activate 1,000 angels over the next five years.
The US$1 million fund is open to both individuals and organisations who see the opportunities in the African ecosystem, with NewGenAngels hoping to create a community of investors. The fund is based on a number of conversations with diaspora investors keen to put money into African businesses.
NewGenAngels founder Sean Obedih said the community was encouraging people to form syndicates of 10 people putting in US$1,000 each in order to invest in startups in a variety of sectors, including technology.
The goal is to invest and co-invest in up to 10 companies over a period of 12-18 months, with the community believing a micro fund will allow it to deploy funds more quickly rather than having to speak to angels on a deal-to-deal basis.
“We are looking to create a diverse portfolio that will include technology-enabled companies and others doing interesting things in FMCGs, education, and agri-processing, but we are sector agnostic,” Obedih told Disrupt Africa.
“This fund is important because it provides a transparent investment product and process that will allow investors to see the impact of their investments.”
Obedih said the approach allows investors to minimise risk by diversifying investments and accessing deals only available through NewGenAngels’ networks.
“But most importantly it creates a community of ambassadors who go out and tell the rest of the world what their portfolio companies are achieving and contributing to the African growth story,” he said.