Outlierz, a Moroccan-based seed investment company, has recently launched with the aim of supporting African startups and the African diaspora by providing them with “smart capital”.
The firm seeks to invest time and money during the pre-seed and seed stages of a company’s development, with investments ranging between $50,000 to $200,000. The members of the team also provide advice, resources and access to a global network of mentors and investors, also known as “smart capital”.
Outlierz realises the huge opportunities that African entrepreneurs posses in the technology sector and acknowledges that the lack of money and appropriate resources hamper the growth and scalability of startups in the continent. Startups with a unique product, executable prototype or looking to raise seed capital are eligible for investment.
The three stage application process is as follows:
- Screening – submissions via form or video. Once considered, the relevant people will be contacted.
- Qualification – this stage involves testing the product/service on the market for a few months. If the trial period yields good results, then it will be taken to the Investment Committee.
- Investment Committee – deliberations are concluded and an offer is made within a few weeks.
Founder and managing partner Kenza Lahlou said the following:
“We started from a simple yet striking conclusion: too many startups fail at the pre-seed and seed stages because of a lack of appropriate resources. We intend to change that by providing smart capital to the continent’s most promising companies.
The target outcome will be a stronger pool of high potential startups that are ready for subsequent investment and, in the end, lead to success stories that are uniquely African.”
Angel Investing in the African Startup Scene
2016 was a great year for African startups after they raised over $129 million in funding, including a 16.8% increase in the number of startups that managed to secure funding compared to 2015.
David van Dijk of Venture Capital for Africa noted that “Angel Investing” (AI) in Africa is experiencing a “coming-of-age” after the the number of visible Angel investor groups doubled over the course of the year to 40 at the end of 2016 (compared to 20 in 2015) across 25 African countries.
The most important lessons learnt over the past year include, but are not limited to:
- Angel investing in Africa is in its infancy and steps must be taken to expose investors to the early stages of investing in these companies.
- Co-investing, communities and making connections are vital in the process.
- “Smart Capital” – business acumen and market access – are just as important as funding.
- Policy makers providing incentives for AI in Africa is unlikely to be accomplished in the short-term and requires long-term planning and solutions.
- Relative to the US and Europe, AI in Africa requires less capital to become renown players in the market, creating an opportunity for small players in these regions to focus their attentions on Africa in order to command favourable market positions.
2017 will be an interesting year for the entire startup scene in Africa and there will be a lot of opportunities for entrepreneurs, investors and governments.