EchoVC announces close and launch of $2.5M Pre-Seed Climate, Energy & Sustainability Pilot Fund, Eco Pilot Fund I

EchoVC, a seed and early-stage technology venture capital firm focused on investing in underrepresented founders and underserved markets, is thrilled to announce a significant milestone in our journey towards fostering innovation in Africa and supporting ground-breaking ideas, products, solutions, and platforms. Today, we are proud to introduce our latest pre-seed fund vehicle – EchoVC Eco [/iː.koʊ-/] Pilot Fund I.

Fuelling Impact, Innovation & Sustainability with Technology:
As a venture capital fund dedicated to unapologetically investing in underrepresented founders and underserved markets, EchoVC is excited to launch EchoVC Eco Pilot Fund I - a $2.5m ‘pilot’ fund in partnership with Shell Foundation with co-funding through UK Aid from the UK Government.

This new fund vehicle represents our commitment to identifying and investing in the most promising pre-seed startups shaping the future of climate, energy, agriculture and mobility. Through our fund, we seek to foster very-early-stage enterprise development and innovation with solutions that enable an income uplift for all the participants along the journey.

Why Eco Fund I?

In keeping with our mission to close the funding gap for underrepresented founders and startups targeting underserved markets, we invested in sector-sensitive companies targeting climate, agriculture, energy and transportation over the last 6 years. Backing incredible founders such as Sara Menker at Gro Holdings, Bim Adisa at Beacon Power Services, Dami Olokesusi at Shuttlers.NG, Desmond Koney at Complete Farmer and June Odongo at Senga, we got a first row look into the journey of these mission-fuelled founders.

Following this, we then spent over a year deep diving to understand where funding flows to, and how it affects, African entrepreneurs within these sectors. Despite marked interest (growing year on year) in harnessing the business potential on the African continent, the distribution of funding to entrepreneurs remains uneven. A sample taken from venture financing deals occurring in Africa between 2017-2021 showed that [Black] Africans accounted for 28% of CEOs and 31% of executive teams of the startups winning financing deals. For the subset of energy, mobility, and agriculture-related firms, the equivalent distribution is 21% of CEOs and 36% of executive teams. That is why as an emerging solution, our Eco Pilot Fund I is targeted at African companies and African founders in Sub Saharan Africa.

As stated by Taiwo Kamson, Principal at EchoVC, “Our Eco Pilot Fund I is not just any fund but a strategic first step initiative designed to address the funding gap in specific impact focused sectors and the respective value chains. We believe that by focusing on these areas, we can make a lasting impact on the growth and development of innovative solutions around agriculture, climate, and energy.”

“Africa’s golden age of entrepreneurship, job creation and household lift will demand that mission-driven founders be backed by high-risk capital. Africa’s needs, while diverse, will not be solved only by investments in fintech,” said Eghosa Omoigui, Managing Partner, EchoVC.

“The objective of our eco pilot fund will be to back founders with first institutional checks and assist them in syndicating financing rounds to support their mission. As a pilot fund, we want to sponsor a pipeline of high quality founders that create high quality companies that can be supported later by the increasing number of climate and energy focused funds. We anticipate that our learnings from this vehicle will feed into our investments to be made from our larger 2024 Eco Fund,” Eghosa Omoigui stated.

“Our approach in coming to market with a relatively tiny pilot fund was to work out the kinks of backing founders in sectors that have historically been underfunded,” said Tsendai Chagwedera, Partner at EchoVC. “As one of the most experienced VC funds on the continent, we have constantly sought to develop innovative ways of financing startups that can create long-term positive financial and high-impact returns in a relatively immature venture capital market, and in today’s risk-off market, entrepreneurs benefit from investors that are ready, willing and able to initialize and maintain financing and company building support,” Omoigui continued.

Taiwo Kamson noted further that “As we see more mid-sized and large funds coming to market to back climate and energy startups, we have struggled to find any that are set up to take first money risk or do the company-building work required to help kickstart the companies that will later be candidates for investment by these funds. The continent needs these pre-seed stage companies to create and deploy the solutions necessary to meet market demand and enable climate-resilient economies.”

Key Features of Eco Pilot Fund I:

Our Eco Pilot Fund I will be focused on making up to ten pre-seed investments in founders and startups that span our specific areas of interest, as set out below.

The Fund will invest broadly in companies led by Africans in Sub Saharan Africa including a specific focus on companies in Nigeria and Kenya delivering particular solutions.

Initial Focus Impact Areas:

1.     Access to resources – New technologies focusing on energy provision or use for agriculture (energy for agriculture).

2.     Access to finance and insurance – Support intermediaries that can use digital technologies to unlock finance for farmers and mitigate their risks.

3.     Knowledge/Capacity Building - Focus on low-cost solutions to provide better market information and training for farming practices.

4.     Access to markets - Creating value chains connecting small holder farmers to larger supply chains thus increasing value to farmers.

Other areas of interest include, but not limited to, innovations in energy storage, cooling, and off-grid cooking, smart energy systems and mini-grids, affordable and reliable access to renewable energy, and new approaches to urban transportation including alt-powered two and three wheelers.

The Impact We Aim to Make:

Our goal is to contribute to the growth and success of the most innovative and promising ventures in the outlined impact areas and create jobs and uplift in income as well as expand the reach in customers served. We envision a future where ground-breaking ideas are not only funded but also nurtured to reach their full potential.

Join Us on this Journey:

We welcome visionary entrepreneurs & forward-thinking innovative founders in Africa to connect with us and, together, shape the future and unlock new climate-resilient possibilities.

The EchoVC team is incredibly grateful to our investors who have partnered with us and our founders on this exciting journey.

We look forward to making a lasting impact with EchoVC Eco Pilot Fund I and its successor funds.

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About EchoVC: EchoVC is a Black-led technology-focused seed and early-stage venture capital firm investing in underrepresented founders and underserved markets. With a mission to be the Sequoia Capital for underestimated founders and markets, the firm invests from offices in Lagos, Nairobi, New York and London, and currently has a portfolio of nearly seventy companies. Financing entrepreneurial inspiration in diverse founding teams, and backing bold ideas and business models that harness the power of technology to deliver value to mass markets, EchoVC invests in technology and technology-enabled startups serving markets across sectors and themes such as smart planet, healthcare and human services, education, agriculture, climate, energy, AI, financial services, mobility, commerce, media, and connectivity.

For more information, visit www.echovc.com

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About EchoVC Eco Pilot Fund I: EchoVC Eco (pronounced /iː.koʊ-/) is the climate, energy, sustainability, mobility and agriculture investing platform of EchoVC.

Open-Mic Session: Accessing Seed & Early Stage Finance for African Startups

It was great bringing together investors in African and Africa-focused companies to discuss insights, challenges, ideas, and thoughts about investing in the era of COVID-19. The webinar was hosted as an open-mic session and featured over 100 participants from first time Angel investors to Venture Capitalists, Private Equity professionals, and Fund Managers across the globe. With the view that a lot of the developed market investors will be focusing on local opportunities when they come out of portfolio management triage, we felt it was important to share and exchange thoughts on how to assemble post-COVID capital for the next generation of important seed and early-stage startups. 

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We are also putting a list of active Africa-focused investors together and would appreciate if you could fill out this form to get more information on your investment criteria.

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Questions & Answers (transcript edited for brevity):

• What is the biggest risk for an investor investing in Africa?

  • Founder integrity is a big problem. The willingness to cut corners for the benefit of themselves and to the detriment of investors is a big issue. There’s a much smaller and finite group of founders that you can count on. Dealing with this becomes a burden on the investor and presents a risk that may not be very visible to you in other markets.

  • The paucity of exit opportunities. This is something that comes up when we talk with LPs in other markets that they don’t see. The concept of getting dividends and payouts on cashflow is not traditional in VC because VC is set up for the exit; the big win; the power-law distribution across the portfolio. But the fact of the matter is there will be many companies that may never get to that exit but become really good operating businesses. One thing that investors always hope for is that there is going to be some exit at the end of the rainbow, but what happens when there isn’t one? How do you force that? Do you now start to think about getting dividends into this thing and so on and so forth? And it’s going to be much harder when you do this at the end versus the beginning. I don’t know whether there is a solution to that right now because I think the US market has always been very interesting in how to set the pace for all these terms. I’ve seen how the terms change when the market changes. The first time I saw a 5x liquidation preference was in the US. I’ve never seen it anywhere else. I’ve never seen it in Africa and never knew it existed! Hard ‘redeemable’ dividends, compounded – I’ve seen that in the US. These are all terms designed to ensure that there is a return and I think one of the things we should do as investors is to have open conversations with the founders about expectations. It feels like the founder just wants to get your money to go in and just do the work, and that is probably not a bad thing because one of the key lessons of being an investor is knowing how to get out of the way, but, there is an expectation for the return and I don’t know how many of us are having those conversations. That’s a thing I think people should talk more about.

• How do you not lose credibility with employees that have sacrificed so much for your startup? (Founders addressing layoffs as a result of COVID-19)

  • As investors, we have to be co-empathetic with the founders we’ve invested in to go through this process. I like to tell people that one of the hardest things I did was when I was Chief of Staff for Intel Capital, we had to participate in a companywide reduction in force and I remember it like it was yesterday. I hated every minute of it and I swore I was never going to be part of it directly ever again. So, I cannot even begin to imagine what it is like for people to go through that. We’ve talked about being able to help founders navigate through this process. Being available and empathetic with them to help them get to the strength they already had and to the strength they will need to make the hard decisions. You need to be able to get to people and relay to them that this is not the outcome I wanted but everybody is struggling and it’s not just us, it’s the whole world. For us to survive and give you the opportunity to potentially come back, we’re going to have to reduce our headcount. Investors have to be supportive of that process.

• How do we help facilitate consolidation?

  • All the startups in the world believe they are fantastic but I’ve been in this business long enough to see businesses releasing press releases of how great they were on Monday and sending shutdown emails on Friday. I get wanting to look bigger and better than you are but that suggests to me that you are not a pragmatic founder because what you have to be able to do is to sit down and say let’s figure this thing out. We created a corporate development element inside our fund to help startups to be better placed to get acquired or to acquire. You’ve got to go back to your startups and ask if they are better off doing this together with the competition and going out and raising money with a bigger opportunity and execution set than you are just doing this now and coming to a halt in 30 or 60 days? That’s going to be very important and I think all of us need to have those conversations with our startup founders because it needs to happen. There’s no way you’re going to get around it now, it’s super super important. 

Antifragility in the Africa-focused Entrepreneurial Ecosystem - March 2020 webinar

As we build and invest in high-impact tech and tech-enabled companies focused on serving various African sub-markets, we see a lot of current market participants that have never faced anything like the catastrophe that #covidー19 is shaping up to be. Many are clearly not equipped with the tools or knowledge to manage or mitigate the impact of an economic recession. The objective of this webinar is to share insights, best practices and recommendations for operators and investors and run a central line into the conviction and energy we collectively have to ensure we can continue to successfully serve our customers, employees, and ecosystems.

The panelists: Folabi Esan of Adlevo Capital, Rebecca Enonchong of AppsTech, Wim van der Beek of Goodwell Investments, Tokunboh Ishmael of Alitheia, Stephan Breban, Clive Butkow of Kalon Venture Partners, and Eghosa Omoigui of EchoVC Partners.

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Our Investment in PayJoy – Deepening Smartphone Penetration… Democratizing Access

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A lot has been said over the years about the importance of enabling people to participate in the growing digital economy that is enabled by the internet.  The value proposition is clear: give people cost effective and dependable access to the internet and they will have a good shot at significantly improving their lives. No wonder that in 2016, the United Nations declared access to the internet a basic human right.

Access to the internet cannot be overemphasized; in 2018, global internet-influenced retail sales rose to $2.84 trillion and is expected to rise to $3.45 trillion in 2019. An estimated 1.92 billion people are expected to carry out commerce online in 2019. However, more than 750 million Africans are currently excluded because they are not connected to the internet. These Africans are cut off from the opportunities that internet access enables to potentially earn an income, educate their families, and access digital goods and services to improve their lives and communities.

Almost half the world remains digitally unconnected. In Africa for example, internet penetration is at 37.3%, making it the lowest globally, significantly distant from its counterparts in Asia, Middle East and Latin America which have penetration rates of 51.8%, 67.2% and 67.5% respectively. With only 56.8% global internet penetration, it means that over 3.3 billion people do not have access to the internet, let alone access to affordable data.

In thinking about the challenge of internet connectivity in Africa, there are a number of factors that we believe are important. Firstly, gross under investment in most African countries over decades has meant that mobile connectivity will be the nearly exclusive way that Africans come online. Mobile telecommunication companies have invested billions of dollars in expanding and improving the quality of mobile connectivity to African – we estimate around 70-80% of all Africans now live in an area that is covered by a mobile network signal. In addition, data from Facebook and other popular online services show that internet connected Africans are predominantly accessing these services from a mobile phone.

Secondly, for those able to get online, the cost of getting online (as a percentage of per capita income) has been decreasing, rapidly. Data from the Alliance for Affordable Internet on mobile data costs shows that on average the cost of 1GB of mobile data has dropped from around 12.5% to 8.8% of GNI per capita from 2015 to 2017 and it continues to improve. In Egypt, Ethiopia, Kenya, Nigeria and South Africa, the affordability of mobile data over this period has improved by over 50%.     

Finally, the affordability of internet-capable mobile devices is a significant factor that limits the uptake of smart phones for access to the internet. A recent report by GSMA found the cost of the handset to be the highest perceived barrier to mobile phone ownership across many emerging markets. The cost (and hence affordability) of these phones has been improving – the same GSMA report found that the average selling price of a smartphone in Africa decreased by about 20% across Africa from 2008 to 2017. Nevertheless, the average smartphone still costs between $100 and $200 in many emerging markets, price levels that are still unaffordable for large segments of the population with limited to no access to asset financing products that are traditionally available in developed economies to support the purchase of these devices. Many people in developed economies are very surprised to learn that the typical African consumer has to pay the entire amount upfront to purchase a smartphone. Unlocking product financing has, in our view, been an integral first step to solving for several contiguous problems, viz, access to credit (finance), access to quality mobile devices, access to the internet, and most importantly, offering Africans optionality to improve their personal and professional lives. Africa cannot afford to be the dumping ground for feature compromised devices that worsen the total cost of ownership while luring users with the promise of a cheap device.

Payjoy enables people who lack credit (or credit history) to gain access to smartphone financing, thus improving [quality] smartphone penetration in emerging markets including Africa, India, Latin America and SE Asia. The company’s full-stack platform pulls together an ecosystem of OEMs, Resellers, Finance Companies and Telcos through partnerships that enable it to provide a seamless product. It currently has partnerships with Samsung (India), ITOCHU (Indonesia), Boabab (Cote d’Ivoire), MTN (Nigeria, Zambia) and a number of others including Apple, Verizon and Qualcomm. PayJoy’s locking technology embedded in the operating system also enables the smartphone to act as collateral for both phone financing and micro-lending thereby further democratizing access to smart phones and internet and opening up opportunities that were previously inaccessible to the middle to lower income segments of the relevant economy, thus assisting them to move out of poverty.

Doug Ricket, the CEO and co-founder of PayJoy, is one of those founders we adore. Since meeting him almost 5 years ago, we have been impressed by his relentless focus on unlocking product finance. He has gained a deep understanding and attachment to this problem through his work at Google, D.light and the Peace Corps. PayJoy for him is not just another bright idea, it is a problem he is deeply committed to solving. Payjoy believes the time is now and we strongly agree.

We have built, and continue to build, a portfolio of symbiotic investments in companies that support our investment theses of fragility, lift, lubricants and organizing the offline. To illustrate, our investment in Mines.io, an ethically responsible small-check lender focused on serving the underbanked and unbanked population in Africa and elsewhere by offering unsecured loans with loan decision underwriting in 60 seconds or less, is an example of how we looked to build a full-stack approach to financial inclusion in Africa. Our investment in Payjoy solves the consumer’s ability to access smartphone-secured credit that allows them to manage cashflow, build a credit history, and create life optionality by accessing internet services via better quality devices. Another [undisclosed] investment of ours is addressing inclusion by solving the fundamental issues around network access and elasticity through material cost reduction in service providers’ capex and opex.

As an Africa-focused VC firm, from inception we have been very thoughtful about how to invest to protect and empower the fragile African consumer and SME. Antifragility should underscore the pursuit of prosperity. We are of the view that, through syndicated educational content, our network of portfolio companies can foster financial wellness in an environment where there has been chatter about abusive consumer behavior AND predatory lending practices leading to debates as to whose role it is to ensure microloan borrowers responsibly use credit. For Payjoy, the platform ensures credit is specifically used to finance (new and preowned) smart phones which, in turn, we believe can significantly improve standards of living. The locking technology, which turns the smartphone into collateral, also ensures that microloan borrowers are disciplined in the size of loans they secure, in making timely repayments to avoid restricted access to their phones, and spiraling into a debt trap.

One important driver for us, in spreading financial wellness to populations that may never have access to credit otherwise, is to ensure that the feedback loop between access to credit, good repayment behavior and rewards, including but not limited to better financing terms, is relatively short. We are working with our portfolio companies to ensure empathy and enforcement are engineered into their platforms. This will benefit the many and concurrently ensure the abusive few are course-corrected in short order.

Making quality smartphones more affordable will be a major step towards improving internet penetration in Africa and emerging countries. This, in turn, will sponsor full access to the world of tech-enabled products and services leading to professional and personal lift and financial inclusion, amongst several other benefits. We look forward to working with an experienced and committed team and supportive co-investors to make this future a reality.

We are pleased to be participating in this financing with our co-investors including Greylock Partners, Union Square Ventures and Core Innovation Capital. We look forward to working with Doug, Mark, Gib and the Payjoy team to deepen smartphone penetration across emerging markets, unlock collateralized financing for the bottom and middle of the pyramid, and increase access to previously unreached communities while helping spread financial wellness.

Our Investment in SystemOne – The Digital Backbone for Infectious Disease Diagnostics

Across Nigeria and many parts of Africa, patients walk into public hospitals to get tested for infectious diseases such as HIV and TB. Once the test results are available, they are manually recorded on paper and a local government supervisor does the rounds to collate these results and funnel them to state and national levels. This allows national health officials to understand the disease burden and ensure follow up and treatment of patients that test positive. The traditional test-diagnose-collate-distribute process usually takes more than 30 days by which time some patients have lost their lives or have already infected others.

This state of affairs creates a very significant problem and health risk. We are excited to announce our Series A investment in SystemOne (through our partnership with TPG Growth and TPG Rise Fund). Simply put, SystemOne is an infectious disease diagnostics company. The company’s  GxAlert® and Aspect® platforms ensure that the time and knowledge gap between diagnosis and reporting is closed by disseminating test results in real-time to clinicians, health ministries, regional/global health funders and patients. By providing health officials with instant notifications and up-to-date dashboards, SystemOne delivers real-time understanding and decision support for disease trends, device functionality, error rates and more.

SystemOne’s platforms are multi-device (including RDTs) and multi-disease such that health officials and funders can have single line-of-sight into all diseases across every diagnostic device in a region. The company has connected over 2,000 diagnostic devices in 40+ countries and has automatically transmitted over 5 million diagnostic results.

We liked SystemOne for several reasons – one of which was that it was solving a very large problem. $25.7bn is being spent annually on TB and HIV. However, the detection rates in places like Nigeria are still as low as 17% for TB. Millions of dollars are wasted in consumables such as MTB/RIF ultra-cartridges because of the lack of insight into inventory levels. Diagnostic devices are left inoperative for periods of time with patients left untested, because there are no mechanisms to alert senior health officials or device manufacturers. SystemOne provides insight for, and into, all the constituencies thereby generating more value for money and arming funders and national health officials with the necessary real-time data. The excitement we heard when we spoke to some of the customers was palpable – “We have been waiting for a solution like this!” The product-market fit has led to significantly low churn with many customers renewing after the end of their contract period.

The SystemOne solution is the only solution in this space that is uniquely designed for developing markets to address issues around power, data shortage, connectivity, technical know-how and language. The on-the-ground support also provided makes implementation and operation easy. 

SystemOne’s co-founder and CEO, Chris Macek previously founded Relyon Solutions, a company that developed large-scale software applications for government projects, the World Bank and universities. Along with his co-founders – Nicolas Boillot and Stefan Baumgartner – they have immersed themselves in this problem set and, with this Series A financing, they will be working on not just detecting but linking every positive diagnosis to treatment to help move the world steps closer to the attainment of the UN’s 90-90-90 goal.

We are very excited to welcome Chris, Nicolas, Stefan and team to the portfolio and grateful to partner with an incredibly driven group as they deliver global impact!  

Introducing Gro Intelligence

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We like to say that we invest in elite founders who breathe, eat and dream about their product and have a very high-fidelity understanding of their market, the problems to be solved, and the job to be done. From a product perspective, we look to invest in blitzscaling companies focused on lubricating or completely eliminating market-facing friction in African markets and beyond.

When we met Sara Menker to learn more about Gro Intelligence, we had no doubt that she ticked these boxes, and more! Today, we are excited to announce that our strategic partnership with TPG Growth led a Series A-2 investment in Gro Intelligence. The funds will be used for product development, people and customer acquisition.  Eghosa Omoigui has joined the company's Board of Directors. 

Gro Intelligence disrupts the existing fragmented agricultural data research market by structuring the world’s agricultural data, organizing and transforming it into searchable information, offering cloud-based decision support and predictive analytics.

Prior to Gro, the agro-data world consisted, in part, of different types of players all seeking decision-making information. There are (a) teams of experts toggling between various technical software, spreadsheets, documents and messy, fragmented outputs; (b) farmers burdened with a plethora of multiple, disconnected data points which they struggle to interpret; (c) third-party intermediaries driving to farms, taking pictures and writing notes, or launching satellite infrastructure to capture and resell better geospatial data; (d) commodity traders paying millions for an information edge; and (e) governments and regulatory agencies creating and implementing policy as well as collating and publishing data that is so important that it can and does move commodity trading markets in an instant.

Fundamentally, every single agro-market participant wakes up every day trying to answer one fundamental question, viz., “How do all these [dynamic and volatile] trends (weather, policy, pricing, risk, demand, supply, regulations, finance, etc.) affect me and my business?”

In Q1 this year in the U.S., grains were piled on runways, parking lots and fields as a result of record highs in yield. Quite the opposite was true in Africa – half the continent experienced the worst harvest in three decades due to climate change. For example, in East Africa, droughts led to a 31% increase in the price of maize products. In both situations, Gro’s flagship product would have been the perfect tool for producers, consumers, governments and NGOs to analyse and understand the interaction of market forces, regulations and weather on production and yields. The Gro system generates yield forecasts analytics that predicts yields within a 2% error margin of the final reported yields, 5 months before official numbers are published. The system is already outperforming USDA forecasts and is available more frequently.

Gro’s use cases are endless. It provides farmers the key data they need to optimize production and gives CPG/FMCG companies the tools to optimize their supply chains and reduce waste. It enables governments and regulatory agencies to develop proactive policies to prevent stockpiles and shortages, gives NGOs access to data needed to achieve their goals of increasing food security and nutrition, and helps insurance industry participants price ag-related risks more accurately.

Gro’s founder once described the company’s objective as becoming the “single source of truth for the world’s global balance sheet for agriculture.” With Gro’s platform, what would take users days, weeks and sometimes even months, can now be done in a matter of minutes. We believe it should increase decision support efficiency by 7,200x!

The fourth agricultural revolution has digital agriculture at its center with regenerative and precision farming coming into near-term focus, with the world’s population expected to increase to 9.6bn by 2050, food production forecasted to rise by 60-70%, and arable land expected to decline significantly. Efficiency and yield maximization will therefore be key and access to quality and actionable data is absolutely crucial.

Agriculture is a $3-5 trillion market globally and we size the agriculture data opportunity as $50-100 billion. Accenture believes that by making data-based decisions, farmers can increase their income by $52bn through cost-cutting and yield-optimization. The proliferation of capital flows into this sector over the last couple of years is no surprise then, with investments like the recent $300 million acquisition of Granular by DuPont and the $900 million DTN acquisition.

Sara Menker is an exceptional entrepreneur that is deeply passionate about agriculture and its impact on people and markets. She was a commodities trader at Morgan Stanley in her previous life and experienced first-hand the pain points in ag-data research. The market crash in 2008 showed clearly how volatile a sector as essential as agriculture could be, which got her thinking more deeply about the future of agriculture. She went on every farm tour across the globe that she could find. Her firsthand experience of massive droughts in Africa in the eighties, made her even more obsessed about agriculture. Sara exemplifies the market and product obsession that is the EchoVC portfolio company founder.  

Separately, it is no secret that there has been a massive bias towards male founders in the tech space. The global percentage of women-founder venture-funded companies has been constant at 17% for over 5 years and even lower at 7% for later stage growth companies, the bulk of which have been in ecommerce and education. For African and Africa-focused women founders, the stats are even more bleak. As an extremely diverse VC firm (50% women), this wasn’t an ideal state of affairs. Thus, we have been extremely keen to fund elite [technical] female founders, and set funding a woman founder as a must-happen goal for this year. We can’t believe our good fortune!

We would be remiss if we didn’t give gigantic shout-outs to the Gro team (and their awesome interns, too).  Together, Sara, Sewit and Nemo have done a tremendous job of building an all-star cross-border team that truly believes in the vision of building a world-class agriculture data platform that, in time, should become the agro market’s daily habit.

We are super excited about Gro and cannot wait for the world to feel its impact. In partnership with our friends at TPG Growth/Satya Capital, we believe that Gro will completely revolutionize agriculture data for Africa and beyond. We look forward to working with Sara and the team and welcome them to the portfolio.

About Gro Intelligence

Gro Intelligence structures and contextualizes the world’s agricultural data, making complex analysis simple and accessible. Gro Intelligence’s flagship product, Gro, is a web-based product that pulls together global food and agriculture data and structures it into a common language using an ontology designed by Gro. Gro also offers a suite of machine learning models to forecast supply, demand, and environmental catastrophes. Gro enables users to extract insights and access predictive analytics at an unprecedented scale. Gro Intelligence has offices in New York City and Nairobi, Kenya. For more information, please visit: www.gro-intelligence.com

Our Investment in Frontier Car Group

We’re thrilled to announce that we recently co-led a $22 million investment into Frontier Car Group (‘FCG’), a visionary company that in 18 months has become a pioneering force in Africa’s technology industry. Launched just a year and a half ago, Frontier builds and runs tech-enabled used-car marketplaces enabling people to buy and sell cars safely and efficiently for a fair price in top tier emerging markets like Nigeria, where the car-sales market is often unstructured and riddled with preventable complexities.

At its roots, FCG is a purpose-built technology platform that ensures the complex nature of the used-car marketplace is streamlined from start to finish. Like many emerging markets, Nigeria’s used car market is plagued by alarming incidents of unwitting buyers purchasing stolen cars or unscrupulous sellers offering undisclosed-as-previously-damaged vehicles. In a market where most people are more likely to purchase a car without ever owning a home, thus making the auto purchase the most significant financial transaction in their lives, Frontier Car Group, through its current operating subsidiaries VendeNosTuAuto (Chile), VendeTuAuto (Mexico), CarFirst (Pakistan), Ototrink (Turkey) and Cars45 (now Nigeria’s largest car buying service), is on track to revolutionize how used automobile sales networks operate in emerging markets around the world.

Prior to FCG, there has been little to no innovation in the used car industry in Africa’s largest economy.  Market-wide challenges have historically included a high level of fragmentation in the industry, lack of technology infrastructure to capture efficiencies, long lead times (14-30 days per transaction vs. 45 minutes-72 hours for Cars45), information asymmetry, and unpleasant bartering dynamics with in-person dealer negotiations. We are firmly of the view that organizing this very fragmented market while eliminating friction and unnecessary complexity should produce tremendous value and introduce market-wide trust infrastructureto all the local market participants, with the added benefit of creating more quality jobs in the local automotive industry and its adjacencies.

Currently, Nigeria’s used car market is extremely fragmented with 99% of transactions occurring on inefficient communication channels such as POTS, WhatsApp and BBM. Cars45 aims to solve many issues with the current model by sourcing verified cars from millions of individual consumers while selling quickly to a large, robust network of verified used car buyers.  The company operates a rapidly growing network of inspection centers where customers who wish to sell their cars can get a quick valuation, inspection, certification and decision within 45 minutes.  Cars45 offers an end-to-end technology solution that eliminates a very significant amount of friction in the purchase, sale and certification of used cars. In doing so, we have seen how much value is created for market participants while reducing the workload of, and generating revenue for, relevant government agencies. Even more significantly, the business opportunities generated by the injection of material liquidity into the marketplace are creating new jobs across the automotive industry.

Headquartered in Berlin, FCG ramped up its operations in a very short period of time and is now overseeing established high-growth businesses in Mexico, Chile, Turkey, and Pakistan, in addition to Nigeria. The team currently employs 200 people across its network and plans to continue expanding.

CEO and co-founder Sujay Tyle has proven himself to be an unstoppable force of nature and a monster fundraiser! Prior to founding Frontier Car Group, he was a partner at Kingsway Capital, a London-based emerging markets-focused hedge fund. Previously, he was on the founding team of Hired.com (a talent marketplace) as its COO, where he helped set a strong foundation for entering and operating in global markets. Sujay has shown time and again his talent for finding strong partners.  His intellect and natural leadership qualities were on early display as he was admitted to Harvard at the age of 15. As a recipient of the prestigious Thiel Fellowship, a member of the 2012 Forbes 30 Under 30 class and one of Goldman Sachs’ Top 100 intriguing entrepreneurs, the combination of Sujay’s impressive achievements and entrepreneurial acumen created a very potent attractant.

As one of our five key investment theses, we look for elite entrepreneurs powering tech-enabled products and services we call “lubricants,” that oil the frictions in our day-to-day lives. Sujay, along with his co-founders Peter and Andre, fit the bill and exemplify the conviction, tenacity and intellect we look for. Importantly, they have partnered with a team of elite local operators in diverse emerging markets. Cars45 CEO, Etop Ikpe, is one of the elite operators driving FCG’s meteoric growth and was, in no small measure, also key to our decision-making process for this opportunity. We had been thisclose to investing in him and his DealDey team and while that opportunity eventually did not materialize, we came away strongly impressed by his entrepreneurial and operational skills and his unique ability to get skeptics and believers to follow him. After he led the sale of DealDey to Ringier Africa, we told him that we would fund whatever startup opportunity he chose to pursue next. We are honored that we were FCG’s sole choice to be their Africa-focused institutional investor. This background is important because I will always be grateful to Etop, Sujay and Peter for sharing this opportunity at a time of great personal grief for me, thus helping me maintain some semblance of normalcy and sanity. As I repeatedly told Etop, who STILL can’t believe we got the deal done despite my personal circumstances, “We told you we would fund your next startup and we meant it.”

EchoVC+, our previously unannounced growth-stage vehicle, is excited to partner with Sujay, Peter, Andre, Etop and the entire FCG team to address one of the largest offline commerce opportunities in Nigeria and beyond. As an active Africa-focused local investor dedicated to funding high-octane entrepreneurs and concurrently attracting foreign investors to participate in the growth of local SME micro-economies, we see Cars45 as being representative of Nigeria’s, and indeed Africa’s, SME-powered digital infrastructure.

We look forward to working closely with Sujay, Peter, Andre and Etop as they continue their high-octane mission to improve automotive sales in emerging markets around the world.