Past funding, MAGIC Fund’s payment-add helps early-stage founders scale

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For a founder, the startup world is a thrilling but very not easy one.

While there were many startup success stories correct thru the last two a protracted time, globally, the majority fail to manufacture it past early-stage as a consequence of rather about a causes; inadequate funding, industry mannequin/design failure, or product/market challenges.

The odds are even better for startups based in rising regions adore Africa, where there could be a dearth of funding, an financial system-crippling infrastructure gap, a wide particular person deplorable with low buying vitality, political hostility and uncertainty moreover fragmented markets.

A lack of acquire entry to to capital is regularly cited as the supreme reason companies fail in Africa and other rising markets. Nevertheless apart from funding, it’s miles also well-known for founders in such markets to additionally acquire mentoring – ideally from people which contain first-hand expertise – as they embark on their startup breeze with unknowns and untread paths.

With this in mind, a global collective of startup founders with expertise in several industries and geographies has been providing every acquire entry to to capital and mentorship to early-stage startups and founders for better than three years.

A fund by founders for founders

MAGIC Fund, launched in 2017, is an early-stage mission capital fund built by founders grew to change into merchants. It has 12 founders from internationally who act as regular companions with the Co-founder and CEO of Helium Health, Adegoke Olubusi, serving as managing accomplice, and Matt Greenleaf as running accomplice.

The fund is built on two theses. One, that pooling funds and sources of particular particular person founder-merchants together commence the personnel to more opportunities for investments, which they’d perhaps well then review better the use of their diverse skill sets.

Most founders-grew to change into-merchants hotfoot the angel investing or mission capital way alone, a convention that in most cases comes with geographical and expertise barriers. 

Realising this, Greenleaf and MAGIC’s other companions – who met Olubusi when Helium Health used to be going thru the Y Combinator accelerator programme in 2017 – co-invest together.

“MAGIC is adore a fund of micro funds built by founders,” Greenleaf told TechCabal in an interview. “Ahead of we started, we had been all into some style of investing as founders nevertheless realised that with our expertise namely industries, it would possibly perhaps well well manufacture more sense to consolidate our collective intelligence and streamline our angel funding teach thru a fund,” he explained.

MAGIC Fund 1 used to be $1.5 million, comprising the founders’ deepest monies in accordance to Greenleaf.

With its first fund, MAGIC invested in over 70 corporations at pre-seed and seed phases at some stage in Africa, Europe, Latin The USA, North The USA, and Southeast Asia. 

Helping founders on their breeze

Two, MAGIC believes that smaller funds bustle by founders acquire easiest in early-stage investing. Thus, the fund backs startups fixing challenges internationally at their earliest phases.

MAGIC has equipped founders with better than correct money, Greenleaf notes.

Unlike worn merchants whose well-known point of curiosity is getting sweet returns on investments, the founders-merchants at MAGIC with startup expertise additionally explore out for how essential payment they’ll power for startups invested in. 

MAGIC’s funding comes with enhance for founders thru recordsdata sharing and classes with experts in associated fields. This way, they reduction early-stage founders get product-market match, ravishing-tune industry devices, and fundraising strategies for a hit seed rounds.

In preserving with Greenleaf, the Fund’s companions offer mentoring, advice, and network connectivity to enhance investee-founders as they scale their companies.

“We speak that regular recordsdata and technology one can reduction other founders bustle a firm from zero to 100,” he talked about. “Now we contain of us within the crew who contain started a lot of corporations and contain acquire entry to to people which contain helped create unicorns. With that collective recordsdata of the crew, we present mentorship.”

MAGIC Fund’s expanded crew.

About a of the startups MAGIC has invested in and supported thus a ways comprise Bankly, Mono, Eden Life, Evolve Credit, Indicina, Bamboo, Chronus Health, Oxygen, Kiwibot, and loads others.

By investing in startups and mentoring early-stage founders, Olubusi believes the components MAGIC Fund operates presents the standard companions an opportunity to give reduction to their ecosystems. 

“Later-stage founders whose corporations contain gone past the preliminary pre-seed, seed, or product-market match stage contain a extremely serious purpose to play in facilitating and serving to grow their ecosystem,” he talked about. “And that’s with out a doubt one of many things we acquire to electrify at the fund.”

What subsequent?

After seeing success from its investments – MAGIC Fund 1 performed 5x over the duration of three years, in accordance to Olubusi – the firm has raised a 2d fund of $30 million announced not too long ago.

“We had completely deployed the principle fund so we conception: why not scale up the design because it labored so smartly and produce about a more of us on board?” Greenleaf talked about. “We didn’t contain a stout-time dedicated crew for fund 1 nevertheless now contain that and 15 regular companions who reduction with varied industries. Clearly, $30 million is a range of money to deploy and prepare.”

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About a of the unusual companions becoming a member of the MAGIC crew are the founders of startups invested in beneath Fund 1 nevertheless contain exited. In preserving with MAGIC, one-third of the unusual fund used to be contributed by the founder-regular companions.

MAGIC’s restricted accomplice deplorable is diverse, with 50% of them shaded and 33% ladies folk. About a of the LPs are Paystack’s Shola Akinlade, Olugbenga Agboola, the CEO of Nigeria’s Flutterwave, and Hendra Kwik of Payfazz in Southeast Asia, Katie Lewis, Michael Seibel, Kirsten Connell of Octopus Ventures, Tim Draper, and loads others.

Becoming a member of as companions are Evercare’s Temi Awogboro, Troy Osinoff, Tom Chen of Stitchroom, Elvis Zhang of Oxy2, Medumo’s Adeel Yang, and Juice’s Michael Lisovetsky.

Magic Fund 2 will likely be writing $100,000 to 300,000 tests at pre-seed and seed phases, Greenleaf published. The global fund is sector agnostic and plans to point of curiosity on fintech, healthcare, SaaS and mission, ladies folk’s smartly being, developer tools, and loads others.

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