African fintech has occupied a central place in the Catalyst Fund, an accelerator backed by JP Morgan Chase and Bill & Melinda Gates Foundation that provides advice and non-equity funds to emerging market emerging companies.
The organization announced its start cohort in 2019 and three of the four financial companies, Chipper Cash, Salutat and Turaco, have a focus on Africa (the company based in Brazil, Diin, was the fourth).
About The Catalyst Fund
The Catalyst Fund, which is managed by the global technology consulting firm BFA, also published its latest evaluation report, which showed that 60% of the portfolios of new companies in the organization are located in Africa.
New additions to the fund’s program will range from $ 50,000 to $ 60,000 in support of the creation of companies without capital (as Catalyst Fund calls it) and six months of technical assistance. The funds and support are aimed at taking companies to the next phase of catalyzing business models, generating income and connecting to global VCs.
“We really adapt the kind of help we provide to companies so that they can reach the set points and market test that investors want to see to enable the next phase of growth”, BFA Deputy Director Maelis Carraro said.
The Catalyst Fund’s start-up cohort in 2019 was also exposed to the fund’s Investor Circle, an impact network and commercial sponsors that can make investment decisions and accelerate individual companies.
A little bit of history
The deadline for supporting the new Catalyst Fund startup cohort lasts until 2019. Companies will also attend the large SOCAP 2019 technology conference in San Francisco, where Catalyst organizes workshops and meetings with its Investor Circle.
Founded in 2016, the mandate of the Catalyst Fund includes support to new fintech companies that are developing solutions for low-income people in emerging markets. The organization has accelerated 20 companies in Africa, Asia and Latin America that have raised $ 25.7 million in tracking capital, according to their latest report.
With the Bill & Melinda Gates Foundation and JP Morgan Chase. as leading sponsors, the Catalyst Fund partners also include Rockefeller Philanthropy Advisors and Accion.
JP Morgan Chase’s interest in supporting the Catalyst Fund is related to a firm commitment by the global bank to financial inclusion, according to JP Morgan Chief of Community Innovation, Colleen Briggs, who is also a day-to-day administrator of the Catalyst Fund.
The JP Morgan actions
JP Morgan recently launched a five-year commitment of $ 125 million to improve global financial health, he explained. “For us there is a real market opportunity … we genuinely believe that financial inclusion is the foundation of the economy”, said Briggs.
“If we do not understand social problems well, this undermines the resilience of the communities and markets where we try to operate”.
The fact that the Catalyst Fund cohorts have moved to companies focused on Africa speaks about the fintech thesis on the continent.
Why Africa matters
According to a series of estimates, the 1.2 billion people in Africa represent the largest proportion of the world’s unbanked and unbanked population.
An improved mobile phone and smartphone profile for Africa (see GSMA) makes this an opportunity for financial products based on mobile devices.
Hundreds of new companies are descending into the fintech space of Africa, seeking to offer scalable solutions for the financial needs of the continent. For the statistics offered by Briter Bridges and a WeeTracker survey of 2018, fintech now receives most of the venture capital and transaction flows for new African companies.
Companies such as the Catalyst Fund co-member, Chipper Cash, co-founded by Ugandan Ham Serunjogi and the Ghanaian Maijid Moujaled, seek to grow in Africa before considering any global movement.
The company plans to introduce its products without payment, P2P, to pay cross-border mobile money beyond current operations in Ghana and Kenya to Rwanda, Tanzania and Uganda within the next 12 months.
Companies seeking to join companies such as Chipper Cash as a company funded by the Catalyst Fund may request a reference from the Catalyst Investors’ Circle, which makes recommendations on new candidates. The Catalyst Fund aims to choose 30 new companies for its cohort over the next three years, according to the program’s director, David del Ser.
Also published on Medium.