In April, a global startup accelerator joined forces with ARM Labs, a Lagos-based innovation hub, to launch a new accelerator program designed to foster innovation in fintech and related sectors. This initiative underscores the expansion strategies of the accelerator, which has been growing its presence in Africa.
The Lagos-based accelerator program aims to attract early-stage companies by offering a three-month intensive program. Accepted startups will receive $20,000 in seed funding, a $100,000 convertible note for equity between 6-9%, and access to an extensive network of mentors, resources, and industry experts. This marks a new chapter in the firm’s relationship with Africa, which began with a trial program in Cape Town in 2016. Over the years, the organization has supported over 100 African startups across various sectors, many of which are based in Nigeria.
Lagos as a Strategic Location
Lagos, Nigeria, is often described as the epicenter of Africa’s burgeoning tech scene. In 2021 alone, Nigerian startups attracted more than $1.8 billion in venture capital, making it one of the continent’s most vibrant innovation hubs. Recognizing the potential of the local market, the accelerator selected Lagos as the starting point for its expanded African operations. The program aims to catalyze innovation by partnering with ARM Labs, a firm deeply embedded in the Nigerian business ecosystem.
The accelerator program is set to welcome its first cohort in December, with a Demo Day scheduled for March. The partnership with ARM Labs is expected to enhance the program by blending global expertise with local insights. By combining their strengths, both entities aim to provide comprehensive support to participating startups.
Global and Local Reach
The program is open to both local and international founders. Historically, about 20-40% of participants in the accelerator’s programs are local, and the rest hail from other regions. This initiative is no different, with a focus on attracting entrepreneurs from across Africa who are targeting the continent’s markets. The program is particularly appealing to founders who wish to immerse themselves in the African business environment.
In addition to hosting startups with a fintech or proptech focus, the program will serve as a gateway for international founders looking to tap into Africa’s opportunities. The accelerator has run similar sector-specific programs globally, including initiatives focused on music in Los Angeles and agriculture in Minnesota.
Building Resilience in Tough Times
Amidst a global economic slowdown and reduced venture capital activity, this accelerator sees its new Lagos initiative as timely. By focusing on sustainable business practices and robust growth strategies, the program aims to equip startups with the tools to navigate challenging economic conditions.
Participating startups will also have access to follow-on funding opportunities through the accelerator’s venture fund, which supports companies through seed and Series A rounds. The program’s holistic approach to funding, mentorship, and networking is designed to help startups achieve long-term success, regardless of external market conditions.
Fostering Future Unicorns
With Nigeria already home to several unicorns, the program aims to create more high-growth companies from Africa. The accelerator is optimistic about the potential of the African market, citing its large population, increasing consumer demand, and the resourcefulness of local entrepreneurs. By addressing some of the continent’s pressing challenges, these startups have the potential to grow into legacy businesses that reshape industries.
The accelerator’s partnership with ARM Labs, combined with its global expertise, positions this initiative as a significant step toward unlocking Africa’s entrepreneurial potential. Through this program, the organization hopes to contribute to the growth of innovative solutions that address real-world problems while fostering the next generation of successful businesses on the continent.
