Impact-focused equity crowdfunding portal Malaik has launched in Africa, bidding to help small and medium enterprises (SMEs) on the continent overcome challenges when it comes to accessing funding.
The aim of Malaik is to connect investors interested in impact investment opportunities with African entrepreneurs raising equity finance. It offers clear and well-documented opportunities for high impact investing in African businesses.
Malaik uses a unique system of first identifying a lead investor before putting a company on the platform, with this investor setting the terms and valuations of the deal, and personally investing a minimum of 25 per cent of the company’s asking round. The lead investor is required to conduct their own due diligence before putting their money in.
Crowdfunders receive the same class of share, and the same price per share, as the lead investor, with companies listed on Malaik deciding how much money they want to raise in exchange for a certain percentage of equity.
“Young companies all over Africa face a scarcity of funds to fuel their growth,” said founder Neku Atawodi.
“Apart from banks and occasional angel investors, there is often nowhere to turn. Malaik is turning this crisis into an opportunity for startups and investors alike by offering stakes in young African companies to the crowd. Our unique impact tracker means that investors can track their investments impact on the platform.”
The platform will focus on high-impact companies that provide jobs and solve social and infrastructural issues in African nations while maintaining profitability, with the portal funding seed stage businesses requiring funding of between US$200,000 to US$2 million.
“We believe that business with an impact should be profitable,” said Atawodi.
“And that innovative entrepreneurs are the key to developing a more prosperous and equitable Africa. Malaik’s unique job index will allow investors to view how many jobs are created by investing in the startups’ scale up plans.”
Malaik tracks impact as well as financial reports, using an impact tracker that tracks the company’s progress using measurable Sustainable Development Goals and reports it in an easy to understand dial system.
“The needs of our age are building a more sustainable world, fighting global poverty, global health issues and climate change, among others. The innovation in finance that responds to this need in Africa is Malaik: democratising impact investing into impact-driven African startups,” said Issam Chleuh, Malaik impact advisor and chief executive officer (CEO) of Africa Impact Group.
The platform charges no upfront or ongoing charges to investors, and receives nothing if a company does not make a profitable return. It is currently showcasing its first fully funded company, I-drop water, a data powered innovative vending water machine that addresses the challenges of clean drinkable water in Africa.