Launched by the New York-based venture platform Modus, Modus Africa is a venture capital fund supporting blockchain and artificial intelligence startups in sub-Saharan Africa. In the first quarter of the next year, the fund is projected to attain its final close.
Modus’ expansion over the last 18 months has included outlets in Abu Dhabi, Cairo, and, most recently, Riyadh, with support from organizations such as Mubadala’s Hub71. Modus says that its entry into Africa creates an “additional conduit of market access for Modus portfolio companies while also enabling African startups to scale into the MENA region.”
Modus operates three business divisions focused on entrepreneurs and startups in the MENA and GCC regions as a “holistic venture platform.” They include the Venture Builder, which works with early-stage MVP companies and ideas. Then there’s Corporate Innovation, a service platform that uses the company’s internal know-how to help corporations and governments. In addition, its venture capital arm invests in early- and mid-stage startups such as staffing platform Ogram.
Founded in 2016 by Kareem Elsirafy with Vianney Mathonnet and Andre Jr. Ayotte as the general partners of the Africa-focused fund, Modus says its fund is backed by several investors, ranging from UHNWI, family offices, private investors, and government-backed entities from the U.S., EU, and MENA.
“Not long after we launched this project after noticing how massive blockchain and AI could be in Africa, we were approached by Modus Capital because they wanted a Pan-African strategy themselves,” said Ayotte. “They were looking for people with the know-how, the network, experience to do that, so we started discussing how the partnership would work. Ultimately, what happened is that our project became the Modus Africa fund.”
According to Modus, Africa has the potential to achieve 200 million+ additional blockchain users over the next four years, driven by necessity and a rapidly rising tech-savvy populace. Nonetheless, the six-year-old VC company isn’t only betting on AI and blockchain startups; it’s also investing in startups from other industries that are incorporating those technologies into their products. According to the general partners who control the fund’s thesis, direction, and investment strategy while leveraging Modus’s 50+ team for due diligence and portfolio management, the firm is currently closing three investments in startups using AI and blockchain across insurtech, fintech, and health tech.
“We as a fund will reinvest in our winners and our LPs are also looking to reinvest in them outside the fund, catalyzing even more money in the ecosystem in Africa,” said the partners. “In terms of countries, we know that tech talent and incubators are really strong in tech ecosystems like Kenya and Nigeria, Egypt, and South Africa, and it’s inevitable that a good deal flow within all these regions. With that said, though, we are exploring new regions and searching for key partnerships to enter those markets and add some support and sustainability for deal flow.” Some of these markets include the Democratic Republic of Congo (DRC), Niger and others in Francophone Africa.
Speaking on the formation of Modus Africa, Kareem Elsirafy said in a statement: “Modus is proud to be launching an Africa-MENA investment corridor to continue supporting and investing in emerging innovation ecosystems. The Modus platform is uniquely positioned to deliver impact and value to African communities through operational, institutional, and financial capital. We’re excited to have Vianney and Andre leading the way on this journey.”
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