EchoVC, a Lagos-based VC firm, has launched EchoVC Chain, an 8 USD million “pilot” blockchain-focused seed fund.
Echo VC, a Lagos-based VC firm, focuses on underserved and “underestimated” founders and markets, according to a statement by the company. To date, the firm has invested in almost 40 companies across various worldwide markets and made its first blockchain-related investment in 2021.
Echo VC and the blockchain
“Over the past few years at EchoVC, we have become intrigued with blockchains. The more we explored, and learned, the more excited we’ve become about the applications of blockchain and its functions in Africa,” said the firm’s Eghosa Omoigui, Tsendai Chagwedera and Deji Sasegbon in a blog post.
“For African markets, we believe blockchain functionality is more of a need, rather than a want, and our thesis is to leverage these functions to enable new leapfrogs, or unlock novel market opportunities, across the continent,” the post went on to say.
Areas of interest
The USD 8 million pilot seed fund, EchoVC Chain, will focus on investments in founders and startups that span EchoVC’s specific areas of interest. The company is particularly interested in two elements of the blockchain – the ability to abstract or tokenize, and the ability to scale autonomously.
“However, our perspective on the applications of blockchain in Africa traverses multiple layers. Our first layer of focus is on foundational fintech infrastructure. This includes infrastructure leveraging stablecoins to optimize payments, liquidity, and treasury; and also explores the unbundling and delivery of crypto/fintech building blocks, or “primitives” – which other companies can utilize to scale faster,” EchoVC said in their post.
The second layer, according to EchoVC, regards blockchain functionality. According to the firm, DeFi functionality can be leveraged in Africa for innovative financial products improving access to credit and savings, or new-age decentralized neobanks. NFTs can serve to foster the creator economy for the rising Gen-Z, enable games to provide new ways to earn, or even fractionalize real-world assets and portfolios to lower affordability barriers to investments, the company believes.
DAOs: Untapped potential
Finally, the company is upbeat about the prospects of decentralized autonomous organization (DAOs), particularly their ability to scale autonomously and organize human networks. “Examples in Africa are social collectives and informal markets, which are key strands of Africa’s offline economic fabric. DAOs can organize the offline and informal networks in a way that is beneficial for all participants. This should unlock labor liquidity and increase earning potential for the bottom-of-the-pyramid demographics. Other examples include decentralised agent networks, social networks, as well as gig networks,” the company said.
Finally, the fund will also explore other blockchain areas including digital identity, privacy, decentralised infrastructure edge nodes and agile supply chains to a possible future intersection between AI/ML and DAOs.
Impact Investing Ghana recently began the setup of a fund of funds that aims to make USD 75 million available through local and international funding for Ghanaian capital providers.