Early-stage African investor Uncap has launched Unconventional Capital, a EUR30 million (US$33 million) fund dedicated to providing non-dilutive, revenue-based financing to early-stage small and medium-sized enterprises (SMEs) across Africa.
Since its inception in 2019 and official launch in 2021, Uncap has invested in early-stage African SMEs via its alternative, revenue-based financing approach.
Its new EUR30 million (US$33 million) fund Unconventional Capital will collaborate with key partners, including SAIS, an agri-tech initiative funded by the German Federal Ministry for Economic Cooperation & Development (BMZ) and implemented by GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH), as well as O-Farms, a circular agriculture programme run by Bopinc and funded by the Ikea Foundation.
By working with its partners, the fund aims to unlock growth opportunities for businesses and harness its expertise and networks to better support SMEs in high-impact sectors.
The fund has attracted the backing of global institutions such as the Bill & Melinda Gates Foundation and the Bayer Foundation, underscoring its credibility and the growing confidence in Unconventional Capital’s innovative approach to alternative financing. The financial model, focused on revenue-based financing rather than equity dilution, provides more flexible funding options for African businesses navigating early-stage challenges.
Additionally, Uncap has separated its financial operations from its proprietary technology platform, Level – a stand-alone SaaS platform designed to simplify investment management for funders and accelerators across Africa. This strategic move will allow Uncap to focus on delivering tailored financing solutions while expanding its tech-driven investment support services.
The fund will be co-led by Uncap’s current investment principal Esther Ndeti and CEO Franziska Reh, both of whom will serve as managing partners. Ndeti said Unconventional Capital seeks to redefine SME financing by creating an environment where more businesses can thrive in underserved markets and contribute to sustainable economic growth across the continent.
“SMEs account for about 90 per cent of African businesses, yet they face many challenges in raising capital. The inefficiency of African capital markets in effectively supporting SMEs, coupled with limited visibility to a broad investor base, continues to hinder access to essential funding for small and medium-sized enterprises across the continent,” she said.
“Over the past three years, we’ve championed innovative, alternative financing for African businesses. We hope this fund will address capital gaps for early-stage SMEs as they scale, deepening our impact. In the end, we want to not only support more businesses but also set new standards in the industry for innovation and inclusion.”
