Founders Factory Africa raises US$114M from JJIV and Mastercard Foundation to expand support to African techpreneurs

SOUTH AFRICA – Africa’s early-stage start-up investor, Founders Factory Africa, has raised US$114 million from Johnson & Johnson Impact Venture (JJIV) and Mastercard Foundation to expand its ecosystem of tech startups.

The support will enable Founders Factory Africa to scale its model and better serve technology-led start-ups and founders across the African continent.

The JJIV investment exclusively supports the healthcare vertical within Founders Factory Africa to significantly increase access to high-quality care in Africa, which is part of their broader goal to build and scale 100 African startups by 2025.

David Higgins, Investment Lead, Johnson & Johnson Impact Ventures said, “In Founders Factory Africa, we saw an opportunity to invest in high-potential entrepreneurs that historically have not received funding.”

Higgins added that Founders Factory Africa was uniquely positioned to not only identify those entrepreneurs but actively partner with them on their journey and JJIV was proud to support them to help transform the landscape of healthcare innovation in Africa.

The accelerator’s unique approach and mission alignment made it a natural partner to Johnson & Johnson Impact Ventures (JJIV), an impact fund within the Johnson & Johnson Foundation.

Moreover, they support startups that are positively disrupting healthcare, providing new solutions, and addressing health inequities.

Founders Factory funding Africa’s tech startups

Founders Factory, which originally launched in London in 2015 and has already built more than 70 startups, and launched African operations in Johannesburg in 2018, from where it plans to design, build and scale 140 disruptive tech startups across Africa.

The company brought its model to Africa in partnership with Standard Bank and subsequently secured backing from Netcare to provide a platform for entrepreneurs to build and scale e-health startups across Africa.

Founders Factory Africa has cut a niche as an early-stage tech investor and venture development company that is partnering with companies at very early stages to help them access capital and technical expertise.

Since its inception in 2018, Founders Factory Africa has catalyzed the trajectory of over 55 tech start-ups across the continent.

Bongani Sithole, CEO, of Founders Factory Africa said, “In Africa, there is an abundance of entrepreneurs with the talent and ability to revolutionize healthcare. At Founders Factory Africa, we’re here to fuel their success and impact as they focus on local solutions to local problems, scaling businesses that positively change the lives of their users.”

Making African entrepreneurs better positioned to succeed

Although Africa does not suffer from a lack of entrepreneurial interest, innovation still faces major challenges.

In particular, it’s often difficult for founders to get funding and other needed support when their businesses are in the early stages of development.

Most funding in Africa goes to lower-risk, later-stage companies, and early-stage African entrepreneurs receive only 8% of total investment dollars compared to 20-25% in other startup-supportive economies.

Sithole remarked that Founders Factory Africa was committed to supporting entrepreneurs with everything they need to go further, faster so that their incredible potential and promise can improve lives across the continent.

The funding affirms Founders Factory Africa’s hybrid investment model of combining capital and operational support and will help the early-stage investor further iterate this model.

Moreover, supporting early-stage ventures to become sector-agnostic in their investment with founders who prioritize business fundamentals, and will also double down on addressing the gender imbalance in the ecosystem.

Additionally, the accelerator will broaden its capital investment offering to include non-dilutive capital, supporting the continent’s need for different capital deployment types across the venture maturity curve.

The accelerator also recognizes the need to strengthen its internal capacity to continue to provide its portfolio of start-ups with the best venture-building support on the continent.

“Come build with us,” said Founders Factory Africa CEO, Bongani Sithole.

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