SA's first equity crowdfunding platform, Uprise.Africa, has secured an undisclosed amount of funding from Silicon Valley-based venture capital (VC) firm Nexxus Ventures.
The Cape Town-based online equity crowdfunding platform says it recently concluded an investment round on a R60 million evaluation.
Through the investment, Uprise.Africa has formed a strategic partnership with Nexxus that will focus on identifying South African businesses with high growth potential and help them launch new funding deals, and facilitate further funding for global expansion.
Targeted at both investees and investors, Uprise.Africa facilitates the investment process for small to medium enterprises and entrepreneurs through crowd-funding. Its online equity crowd-funding model enables multiple investors to support entrepreneurs through buying equity in their businesses.
"While the investment will be used on investing across our business with a critical focus on improving user experience and enabling scale, the partnership is more for a strategic reason," explains Uprise.Africa CEO Tabassum Qadir.
"The partnership between Uprise.Africa and Nexxus Ventures will set up many promising South African businesses as 'Silicon Valley-ready'. Local companies funded on Uprise.Africa's platform will have the option to be incorporated in the US.
"Nexxus Ventures will facilitate all necessary requirements for businesses to be structured as US-domiciled entities, and they will handle all IP rights and assets required for US investment as the US entity."
The investment, adds Qadir, has been attributed to Uprise.Africa being the only regulated equity crowd-funding platform in SA.
A successful campaign ran on the platform for Drifter Brewing Company. The up-and-coming player within the local brewing ecosystem raised over R3 million after a few months of running its equity crowd-funding round live on Uprise.Africa.
Nexxus Ventures is based in Palo Alto, California, and focuses on early stage VC investments by backing innovative businesses which are building market-transforming companies.
It invests in and assists international start-ups seeking capital and market entry in the US market. The company's partnership team consists of Tsuyoshi Taira, Mukesh Ahuja, Mo Khan and Guillermo Sohnlein, who have helped back a myriad of emerging growth companies, including industry innovators like Junglee (acquired by Amazon), Meraki (acquired by Cisco) and Collective Health.
"This acquisition will enable Nexxus Ventures to allocate intelligent capital behind ambitious, disruptive entrepreneurs through the Uprise.Africa platform, and utilise its extensive Silicon Valley and global network to search, identify and invest in 'African Unicorns'," explains Khan.
Identifying 'disrupterpreneurs'
Uprise.Africa was founded in 2017 by Qadir and co-founders Patrick Schofield (COO), Inge Prins (CMO) and Vuyisa Qabaka (investor relations officer), with a 51% stake owned by female entrepreneur organisation, Women2Rise.
Since its inception, the crowd-funding platform has done two successful campaigns as proof of concept.
The platform charges an 8% levy on investments: 5% goes to the platform, 2% management fee to cover post-investment costs and 1% to cover the platform's upkeep costs.
Discussing the listing criteria for businesses, Prins says Uprise.Africa focuses on sourcing a variety of talent from the South African entrepreneurial landscape.
"We are looking for entrepreneurs wishing to raise any amount from R500 000 to R50 million. We welcome businesses from all sectors and will assess each project on its own merit," she explains.
It has over 250 registered investors. "By registering on the Web site, investors will get information on when the next campaign will go live," notes the firm.
Once it has fully established itself in SA, the company hopes to expand across Africa.
"Uprise.Africa has a Pan-African ambition as our name alludes. Once we have streamlined operations in SA, we will look at further expansion," concludes Prins.
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