Venture capital firm Uncap has introduced Unconventional Capital, a €30 million fund aimed at addressing the funding challenges faced by early-stage small and medium-sized enterprises (SMEs) in Africa. This initiative seeks to bridge the gap in capital access that many SMEs encounter during their growth phase.
Non-Dilutive, Revenue-Based Financing
Unconventional Capital offers a unique financial model, providing non-dilutive, revenue-based financing to early-stage African SMEs. Unlike traditional funding methods that dilute ownership, this approach allows businesses to retain control while securing the capital needed for growth.
Key Partnerships for High-Impact Sectors
Uncap has partnered with organizations such as SAIS, an ag-tech initiative funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ, as well as O-Farms, a circular agriculture program run by Bopinc and funded by the Ikea Foundation. These collaborations aim to unlock growth opportunities for businesses in high-impact sectors, leveraging Uncap’s expertise and networks to better support SMEs.
Global Support from Leading Foundations
The fund has garnered support from prominent global institutions like the Bill and Melinda Gates Foundation and the Bayer Foundation, underscoring growing confidence in Unconventional Capital’s innovative approach to alternative financing. By focusing on revenue-based funding, Uncap provides flexible options to early-stage African enterprises, helping them overcome financial challenges without sacrificing equity.
Separation of Financial Operations and Technology
Uncap also announced the separation of its financial operations from its technology platform, Level. Level is a stand-alone SaaS platform designed to simplify investment management for funders and accelerators across Africa. This strategic move will allow Uncap to focus more on delivering personalized financing solutions while expanding its tech-driven investment support services.
Leadership and Vision
The Fund will be co-led by Uncap’s current investment principal, Esther Ndeti, and CEO Franziska Reh, who will both serve as managing partners. Ndeti emphasized Unconventional Capital’s commitment to transforming SME financing by creating an environment where more businesses can thrive, particularly in underserved regions. She highlighted the critical role of SMEs in Africa, accounting for about 90% of businesses, and the persistent challenges they face in raising capital.
A New Standard in SME Financing
“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,” Ndeti explained. “In the end, we aim not only to support more businesses but also to set new standards in the industry for innovation and inclusion.”
Through Unconventional Capital, Uncap seeks to enable long-term economic growth across the African continent, empowering SMEs to overcome capital barriers and succeed in a competitive market.