Jake Bright
Jake Bright is a writer, author and advisor with a focus on global business, politics, and technology.
From 2017 to 2020, he was a contributing writer and advisor at TechCrunch where he published on Africa, mobility and politics. Bright helped spearhead consistent Africa coverage and co-produce the first Startup Battlefield competitions in Africa and Africa focused programming on the Disrupt San Francisco mainstage.
Bright’s first book, The Next Africa (Macmillan 2015), forecast the rise of Africa’s venture backed startup scene. Prior to this he worked in international finance and as a speechwriter in Washington, DC. Bright continues to contribute occasional guest pieces at TechCrunch.
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Ghana’s MEST innovation space is making moves, gearing up to launch a Pan-African VC fund in 2015, while expanding its IT training program into Nigeria and Kenya.
Based in Accra, MEST (full name Meltwater Entrepreneurial School of Technology) operates both as a tech institute and startup incubator. Its 12 month Entrepreneurs-in-Training (EIT) program infuses African techies with “a combination of hard IT and practical business skills to equip them to build successful commercial tech companies,” says MEST Managing Director Neal Hansch.
Some EIT graduates take their startup ideas to MEST’s current incubator fund– where ventures like customer service app Dropifi or electronic records platform Claimsync have received $50 to $100K seed rounds. The incubator (which invests around $1-2 million a year) has launched 20 companies to date. A handful have gone on to raise outside capital and two — Claimsync and messaging app Saya — have been acquired.
While MEST’s seed capital is currently limited to in-house EIT graduates, its new fund (beta name MEST Venture Partners) “will invest in MEST companies as well as companies outside of the MEST ecosystem,” said Hansch. “We see opportunities for a Pan-African fund providing early stage capital to the best and brightest entrepreneurs and companies in the sectors we’re most interested in, mainly digital businesses in ecommerce, edu-tech, digital media, fin-tech.”
Hansch would only name “when fundraising’s done” as a launch date and did not give a target value. He did confirm the new fund will make investments of $500K-$750K for early stage (live product) rounds, with occasional subsequent growth rounds reaching the $1-$2 million range.
These numbers may seem less than chump change to Silicon Valley players, but should be taken in context of the nascence of tech VC in Africa. Total annual VC to the continent’s IT startups is only expected to reach $600 million by 2018, per a Crunchbase assisted analysis.
“For perspective, a $50 million fund is effectively equivalent to a several hundred million dollar fund elsewhere,” explained Hansch. “On the venture side, seed stage investments for upstart companies are generally in the sub $100K range. We’re looking at $500K to seven figures for majority of our deal sizes…Most everywhere else this would be called micro VC, but in Africa that’s a pretty healthy size.”
MEST is tapping into global networks (namely its Silicon Valley office) for fundraising and will surely utilize its recently expanded IT entrepreneurship programs in Kenya and Nigeria for startup pitches.
As key pieces of Africa’s new tech ecosystem emerge (see July TechCrunch piece breaking it down), tech incubators and co-creation spaces have become a mainstay. Like MEST, many began and continue to operate as grant based institutions, receiving funds through foundations, corporate CSR, or even aid agencies.
A shift is emerging across Africa’s notable innovation spaces toward profit oriented, VC focused, startup accelerator models. The Savannah Fund grew out of iHub, Nigeria’s Co-Creation Hub launched its seed fund in 2014, and MEST Venture Partners will soon open a new tranche of investment to Africa’s startups.
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