Nigeria wants to cushion its startups against the kind of
situation that Chipper Cash, a victim of the fall of SVB and the bankruptcy of
cryptocurrency exchange FTX, finds itself in. The battered fintech firm is now
considering selling itself out. Amid the upheaval caused by the recent collapse
of SVB, Silvergate, and Signature banks in the US, Nigeria launched the fund
this week, being thus the quickest in the continent to react to the crisis.
Africa’s largest economy largely aims to reduce the
dependence on startup funding from the US, whose three now-defunct US-based
lenders had been supporting tech-focused venture capitalism in Africa.
Nigeria’s new fund is designed to support creative and tech
sectors from the young entrepreneurs aged between 15 to 35 years who have faced
difficulty in raising capital. The country has the most significant number of
startups in Africa — mostly revolving around the tech and fintech industries.
They have depended on fundings from overseas capital and venture capital firms.
However, the initiative comes off with a shortcoming because
the governmental fund would require collateral, and many startups do not have
it. According to industry experts, SVB’s collapse will significantly impact the
industry. Y Combinator recently stated that one-third of the startups in its
community used SVB as their sole bank account.
0 comments:
Post a Comment