Kenyan/German VC, UnCap, has announced the launch of  Unconventional Capital, a €30 million ($33 million) fund dedicated to providing non-dilutive, revenue-based financing to early-stage SMEs in Africa.

Since its inception in 2019 and official launch in 2021, Uncap has invested in several early-stage SMEs across sub-Saharan Africa. With its revenue-based financing approach, Uncap has been amongst the pioneers of alternative financing for businesses in Africa.

Under Uncap’s revenue-based financing, the VC injects the capital you require (20K to 100K Eur), and you reimburse us through a proportion of your monthly revenue. Startups targeted should meet a few requirements:

  • You run a registered limited company in Kenya, Rwanda, Uganda, or Nigeria

  • A minimum of 2 years in operation

  • Generates at least 80,000 EUR in the last 12 months

  • Well-kept records of accounts, permits, and licenses

  • Potential to scale

According to Uncap, the new fund represents a significant expansion of Uncap’s mission to support growing companies in sectors that drive economic development, particularly in:

  • Agriculture

  • Trade & logistics

  • Climate resilience, and

  • Financial inclusion

Moreover, the VC added that the fund will collaborate with key German and European institutions including SAIS, an agri-tech initiative funded by the German Federal Ministry for Economic Cooperation & Development (BMZ) and implemented by GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH), as well as O-Farms, a circular agriculture programme run by Bopinc and funded by the Ikea Foundation.

The fund is being launched with initial support from major global institutions, including the Bill & Melinda Gates Foundation and the Bayer Foundation. According to Uncap, the backing highlights confidence in Unconventional Capital’s innovative funding model and its commitment to promoting sustainable growth in Africa’s underserved markets.

Uncap also announced a strategic step in separating the company’s financial activities from its proprietary technology platform. The firm has also recently launched a stand-alone SaaS platform, Level, which will continue to provide streamlined investment management tools for funders and accelerators across the continent.

The fund will be co-led by Uncap’s current investment principal, Esther Ndeti, and CEO, Franziska Reh, both of whom will serve as managing partners.

Ndeti stated that Unconventional Capital aims to transform SME financing by fostering an environment where more businesses can succeed in underserved markets, contributing to sustainable economic growth across the continent.

 

“SMEs account for about 90 per cent of African businesses, yet they face many challenges in raising capital. The inefficiency of African capital markets in effectively supporting SMEs, coupled with limited visibility to a broad investor base, continues to hinder access to essential funding for small and medium-sized enterprises across the continent,” she said. 

“Over the past three years, we’ve championed innovative, alternative financing for African businesses. We hope this fund will address capital gaps for early-stage SMEs as they scale, deepening our impact.

In the end, we want to not only support more businesses but also set new standards in the industry for innovation and inclusion.”

 

 

 

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