As technology startups emerge around the world, the need for the right tools and infrastructure to support them has likewise grown.
We’re proud to announce our support of Raise which has the potential to become Africa’s cap table solution. Their team offers a unified platform for investors, startups, employees and law firms to manage equity for corporate structures in Africa and abroad, including legal compliance, digital share certificates, and fundraising support.
The Nuts & Bolts
Problem: All companies, no matter where they’re based, need a way to manage their corporate affairs. That includes things like tracking share ownership, issuing and transferring shares, as well as preparing and filing yearly compliance reports. In the U.S. this has gone from manual and expensive work by law firms and banks, to a host of software options such as Carta, Pulley, Shareworks, and Captable.io, among others.
For companies building in Africa, corporate governance and cap table management is much more complex. Even early-stage companies often need to open multiple operating entities across the continent along with a parent company in an investor-friendly jurisdiction such as Delaware, Canada, or Mauritius. We’ve seen this with our own portfolio companies around the continent.
While the pandemic has increased willingness to adopt digital-first practices, many companies and governments in emerging markets still use physical documents, manual signature processes, stamps, and fragmented databases. Add to this mix of admin nightmares additional challenges like issuing stock options to local employees, the difficulty and time for investors to complete due diligence or getting proper regulatory valuations, and it becomes clear there’s a need for a better way. All of these issues combine to raise the transaction costs and time needed to complete investments and proper corporate governance.
Solution: Raise is built with African tech startups in mind from the start, making corporate organization and equity ownership clear and simple for founders building across the continent. Their platform is able to support companies and their subsidiaries in a variety of jurisdictions in Africa as well as holding companies in common foreign jurisdictions, such as Delaware, the EU and Mauritius. With Raise, companies can also manage the entire fundraising cycle on the platform, opening data rooms for investor diligence, modeling fundraise scenarios, and issuing digital certificates and shares at close. Investors and employees benefit as well. By using Raise they can hold and track their equity directly and eventually use the platform to access liquidity.
Getting to Know Raise
The Raise team is building for this space because of their experience with the challenges companies face in trying to manage these matters across Africa. Their subject matter expertise across securities law, fundraising, and compliance comes from working not only with large law firms and venture funds, but with early stage companies as well. We found when talking to the founding team that it is this lived experience of the challenges in the early stages of a company’s lifecycle that really helps them focus on their customers and understand their target market.
Co-founder and CEO Marvin Coleby is a former lawyer with Denton’s, where he specialized in working with venture-backed companies. Joining Marvin is Tina Nyamache, co-founder and head of growth, who previously worked for Village Capital’s Africa Operations, and Eugene Mutai, technical advisor to the team focused on bringing decentralized finance to Africa’s equity.
Even though 2020 was a slightly down year by aggregate amount of venture funding in Africa due to the pandemic, there was still $1.4B raised across 359 rounds, representing a 44% increase in the number of deals, an all time high for one year and 600% increase from just five years ago.
These numbers are just the start. As we’ve seen with markets around the world at 500, there are great founders everywhere. Africa’s technology ecosystem is just scratching the surface and Raise intends to help the new class of founders, employees and investors build it over the next decade and beyond.
Future of Raise
Raise has started with a simple but difficult mission – to build the most efficient platform for private companies across Africa to manage their equity. But they don’t plan to stop there. Once equity ownership is clear, the next step is providing paths to additional investment and liquidity.
As Africa’s fundraising market continues to grow, Raise’s vision is to become the pan-African securities exchange platform, making wealth and investment opportunities potentially available to every investor, founding team and employee through an open financial system for Africa’s digital equities. This will require bridging the gap between fragmented regulations and building relationships with government and regulatory agencies across the continent. The team is up to the challenge, and we’re excited to support them on this mission.
You can learn more about Raise at https://www.getraise.io.
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