Investment in African startups could drop by as much as 40% by the end of the year due to the Covid-19 pandemic—but the bigger question for smaller startups is if they will remain alive at all. As investors become more risk-averse, industry insiders expect that the funding slowdown to prove most damaging for young companies as venture capital likely tilts towards established startups with proven business models. As such, the stark reality for early-stage startups is they may yet be caught in the cross-hairs of tough macroeconomic headwinds that are forcing even far more established startups to layoff staff and cut down costs. But in an effort to help startups stay afloat, Ventures Platform, an Abuja, Nigeria-based early-stage fund, is creating a startup relief program to disburse emergency grants of up to $20,000 to early, high-growth stage startups that may require cash lifelines. The program has been launched in collaboration with Acumen, a New York based impact investor, and LoftyInc, a Lagos-based investment firm. The main goal of offering the grants is to ensure the survival of promising startups threatened by the pandemic, Kola Aina, founder of Ventures Platform, tells Quartz Africa.
SOURCE: QUARTZ AFRICA