South Africa-based Founders Factory Africa has undergone a significant transformation, rebranding as 54 Collective and launching a dedicated $40 million venture capital fund. This move positions 54 Collective as a key player in the African startup ecosystem, joining other prominent investors like Partech in bridging the funding gap for early-stage companies.
The firm has ambitious plans, aiming to invest in 105 high-potential startups over the next five years, with a focus on supporting 21 businesses annually. Currently, 54 Collective has already backed 29 startups and is on track to reach 42 by the end of 2024.
Commenting on this development, Bongani Sithole, Co-founder and CEO of 54 Collective, highlighted that the firm’s total assets under management now exceed $150 million, encompassing the $40 million fund and an additional $107 million dedicated to supporting the success of its portfolio companies.
This rebranding comes at a crucial time for the African startup ecosystem. Following a period of rising interest rates, foreign investment in African startups has declined significantly. Venture capital inflows to the continent dropped by 31% to $4.5 billion in 2023, with a notable decrease in both equity and debt deals.
In response to this challenging environment, 54 Collective is stepping up to ensure continued capital flow to promising African startups. The firm will actively engage with its portfolio companies, taking board seats to provide strategic guidance and support operational excellence. This proactive approach will enable startups to focus on core priorities like product development and customer growth.
As a fully-fledged venture capital firm, 54 Collective now enjoys greater flexibility to expand its investment scope and attract a broader range of investors. The firm offers a compelling value proposition to early-stage companies, providing up to $250,000 in equity investments and up to $150,000 in non-dilutive capital. This strategic approach underscores 54 Collective’s commitment to supporting the growth and success of the African startup ecosystem.
This rebranding follows a significant funding round in 2023, where 54 Collective raised $114 million to enhance its operational support capabilities and address gender disp
arities within the African venture capital ecosystem.
