Uncap Launches Unconventional Capital With a $33 million fund to Support SMEs in Africa

Uncap, a venture capital firm based in Munich and Nairobi, has unveiled Unconventional Capital, a €30 million fund aimed at supporting early-stage small and medium-sized enterprises (SMEs) across Africa through non-dilutive, revenue-based financing. This innovative model provides capital to businesses without requiring them to give up equity, offering more flexibility as they scale. The fund focuses on key sectors vital to Africa’s economic growth, including agriculture, logistics, trade, climate resilience, and financial inclusion.

Led by Esther Ndeti and Franziska Reh, the fund will collaborate with partners like SAIS, an ag-tech initiative funded by Germany’s BMZ and implemented by GIZ, and O-Farms, a circular agriculture program funded by the Ikea Foundation. These collaborations are set to unlock growth opportunities for SMEs in high-impact sectors, while support from global institutions like the Bill & Melinda Gates Foundation and the Bayer Foundation reflects confidence in Uncap’s approach.

In addition, Uncap has separated its financial operations from Level, its stand-alone SaaS platform, which simplifies investment management for funders and accelerators. This move enables Uncap to focus on delivering tailored financing solutions to SMEs while expanding its tech-driven services.

Key features of Unconventional Capital

Flexible funding options

The revenue-based financing model offers a more flexible approach compared to traditional equity-based investment.

Non-dilutive financing

The fund provides revenue-based financing, allowing SMEs to access capital without diluting their equity.

Focus on high-impact sectors

The fund prioritizes businesses operating in sectors such as agriculture, trade, logistics, climate resilience, and financial inclusion.

Partnerships for growth

Unconventional Capital is collaborating with key partners, including SAIS and O-Farms, to leverage their expertise and networks to support SMEs.

Global institutional support

The fund has secured backing from prominent global institutions like the Bill & Melinda Gates Foundation and the Bayer Foundation.

Eligibility Criteria

• SMEs must be registered limited companies in Kenya, Rwanda, Uganda, or Nigeria.
• Businesses must have been in operation for at least two years.
• Annual revenue should be at least $89,000 in the past 12 months.

Investment Amounts

• Uncap plans to support each eligible SME with between $22,000 and $112,000 in funding.

Repayment Terms

• The specific repayment terms for revenue-based financing will vary based on individual agreements between Uncap and the SME. However, it is generally tied to a percentage of the company’s revenue, allowing for more flexible repayment schedules.

Ndeti noted that Unconventional Capital aims to redefine SME financing in Africa, helping businesses thrive in underserved markets and contributing to sustainable economic growth. The fund’s mission is to address capital gaps while setting new standards for innovation and inclusion across the continent.