ImpactAlpha, August 22 – ImpactAlpha has reported on how funders and financial firms in the U.S. and India are trying to support cash-strapped schools. Many schools in Nigeria face a similar problem with accessing financing. Allpro has developed software to help schools manage their finances and data and connects them to lenders.
Early-stage venture fund Microtraction, based in Lagos, Nigeria, is backing the startup with an equity investment in exchange for a 7.5% stake in the company.
“We believe education is a fundamental right for everyone and key to the future of Africa. We also believe education is the most powerful investment in our future. Inadequate education stagnates socio-economic development on the continent,” Microtraction’s Yele Bademosi said on Twitter.
Microtraction, which does not call itself an impact investor, has made four investments since launching last year. The firm aims to fill a pre-seed funding gap, which Bademosi describes as “a huge problem that was stifling the growth of the African technology ecosystem.”
“It’s harder for very talented people in the African technology ecosystem to raise a few thousand dollars than for someone in Silicon Valley to raise half a million dollars,” he said.
Microtraction’s investment strategy is the same for each portfolio company: it invests $65,000 in two stages. First, is a $15,000 investment for a 7.5% share and the follow-on $50,000 convertible note comes when companies reach a $1 million valuation.
In addition to Allpro, Microtraction has backed personal savings app CowryWise; bitcoin trading startup Bitkoin Africa; and digital payments startup Wallet.ng.