Table of Contents
TL;DR,
- Lisk has launched the $15M Lisk Empower Fund to invest in 40 Web3 startups, capitalizing on emerging markets that deliver 9-11% annualized returns traditional VCs often overlook.
- The fund focuses on startups providing real-world utility in areas like payments and supply chains, offering checks from $250k to $750k and hands-on advisory to prepare them for global fundraising.
- Its tokenized structure offers liquidity in the typically illiquid venture capital asset class, allowing investors to trade their shares if needed.
In Africa, becoming the top ecosystem is cutthroat competition with global competitors vying for top ecosystems for startups. To take it to the next level, Lisk has launched a $15 million fund, the Empower Fund, backing Web3 founders in Africa.
So far, Africa is brimming with creativity, from Azza, Element Pay and others solving tangible, real-world problems across the continent. For Lisk Blockchain, it’s a chance to throw its competitors.
The Lisk EMpower Fund: A $15M Bet on High-Growth Markets in Africa and Beyond
The Empower fund is a chance for the layer 2 Ethereum blockchain to capitalize on $5.2 trillion funding opportunity that most traditional firms miss out on—the keen focus: emerging markets, mainly Africa, Latin America and Southeast Asia.
According to Gideon Greaves, Head of Investments at Lisk, Global VCs are obsessed with speculation. In Africa, where digital payments have become the “million-dollar” push, startups providing utility are basically honey to investors. Cambridge Associate backs this narrative with emerging markets outpacing public benchmarks delivring delivering 9-11% annualized venture returns over the past 10-15 years.
RELATED: 20 Startups Join Lisk Incubation Program for African Blockchain Scaling
This trend takes the mentality of “being first” to a whole new level, with first-world markets oversaturated, posting near-zero three-year returns amid record-high valuations.
We also want to invest in founders who are emotionally attached to their product. It’s an extension of themselves. We’re looking for someone who can not only start a good business and get it to market, but also turn it into a $100 million business. That means raising more and more capital, going through Series B and C rounds, and managing leadership, hiring and firing.
The Lisk Web3 fund, What to Expect for Africa, Latin America and Asia
The Lisk Web3 Fund is engineered to cater to multiple requirements that most Web3 startups crave for. The main focus is to add another layer to its Lisk Incubation program, funneling graduates to a first cheque of $250,000, preparing teams for global Series A rounds. This follows second cheques of up $500,00, providing a maximum exposure of $750,000.
The Lisk Empower fund intends to deploy all the capital in three years. Its 10-year fund will focus on 40 startups and will expect returns between 3-9%. Afterwards, their next goal will be a $50 million+ fund. Importantly, about 30% of the total capital is set aside for follow-on investments, ensuring that successful ventures are not left stranded post-seed.
Gideon Greaves, Head of Investment, Lisk
Beyond writing checks, this new initiative will offer first-hand advocacy to its participants. The main goal is to help founders refine their narrative, structure for international fundraising and provide insights on how to raise Web3 startup funding for subsequent Series A and B rounds.
The fund is a multifaceted strategy funneling successful startups from its accelerator and incubation programs into its next phase. Currently, Lisk has close ties with local incubators like CV Labs and AyaHQ. For African startups, it’s a pipeline for global VCs plus a chance to leverage its Layer 2 network.
In an interview, Gideon Greaves classified the projects as a tokenized fund.
Tokenization just digitizes the whole process. Digitization allows someone to click, invest in the fund, upload KYC documents, and then transfer capital. They could connect their wallets and give us crypto, pay with a card, or do a bank transfer.
Venture capital is a risky asset class relying on the performance of the startups. Unlike traditional and Web3 asset classes, you cannot access your capital until a certain period, most commonly 10 to 15 years. Tokenization provides the liquidity required in what would typically be an illiquid venture. This means you can safely opt out by listing your shares on Lisk or any other marketplace.
RELATED: Lisk Blockchain Expands Into Africa: Empowering Millions Through Incubation Programs and Hackathons
Lisk’s On-the-Ground Presence: Grants, Incubation, and the First Step into Venture
The firm’s long history of running incubation programs, providing grants for startups and hosting events in Africa has made it a favorite in local markets. The fund already announced its initial portfolio, which includes:
- Lov.cash: A South African digital supply chain platform enhancing transparency and efficiency.
- Afrikabal: An African Agritech platform connecting smallholder farmers to global markets and investors.
- IDRX: An Indonesian stablecoin solution designed to expand financial access for unbanked populations.
- SigraFi: A venture financing small gold producers by issuing gold-backed on-chain loan notes.
When zooming into Africa, Lisk has supported ventures like Tata-Mali, Swahilies, and Afrikabal through its incubation program with CV Labs. Through hackathons like Lisk Builder Challenge, events like BlockChange Africa and a new $2M USD fund(Lisk DAO fund), the platform focuses on engagement, utility and providing avenues for builders.
Currently, the platform is looking for startups focusing on payments, linking wallets to bank accounts anything involving stablecoin. Startups focusing on transparency use cases involving verification, certification (RegTech), proper supply chains, or government tender processes have an edge against competitors.
Founders can apply here.
