LabEight Africa Fuel-Fund

LabEight Africa Fuel-Fund

Finance

The token will represent an LP interest in LabEight Africa’s Fuel-Fund.

LabEight* Purpose & Vision

LabEight* is a venture capital firm that invests in category defining, innovative seed and Growth Stage Companies. We take an active, hands-on approach that leverages our entrepreneurial and stage expertise through our Launchpad Accelerator. The Fuel-Fund will partner with entrepreneurs to increase their chance of success by applying our extensive operational knowledge and provide market access through our global network. Fuel-Fund aims to bridge the early stage and venture capital investment gap that currently exists in Africa. The Fund expects to achieve this objective by combining capital with mentor and partner networks in the continent and globally.

Partners

Unifying Investment Thesis

Thematic Investment Thesis

LabEight* Fuel Fund, using a blended fund strategy, is a seed and series capital fund specializing in US$100K-US$1M investments in early and growth stage tech and tech-enabled start-ups in Africa. The fund aims to capture value missed by existing financial products and expects to achieve this objective by combining capital with a network of growth partners, activating their social capital to increase brand exposure and grow revenues for portfolio companies in exchange for an equity share in the company and profit participation.

At LabEight* we believe in a Bottom Up Economy, the idea that technology is now helping individuals and small businesses drive economic growth and innovation.  For many decades, the cost, complexity and rigidity of technology limited its power and benefits to large corporations – a Top Down Economy.
Today, technology is increasingly accessible, cheap and flexible to empower individuals and small teams. Small teams can now compete with large organizations or create entirely new markets with innovative products and services.

African consumers have evolved over the last 5-10 years, driven by an increase in technology penetration and raise in middle class affluence. These changes have uncovered unmet needs for the at-large population across multiple verticals, and agile start-ups are best positioned to take advantage of these opportunities. These opportunities are a powerful force on their own, but when paired with necessity, together they are undeniably potent.
As inventor Ray Kurzweil has said, “a kid in Africa today has access to more information than the president of the United States did 15 years ago.”  Our bet is that the kid in Africa will use that information to become an entrepreneur…and we hope she looks us up.

LabEight’s Focus

Why has LabEight* started with a focus on the Bottom Up Economy?  It’s a combination of our personal experiences, a conviction about the investment potential of the theme and the nature of Bottom Up founders.

  • Personal Experience: We have a combined 55+ years working on and investing in these concepts. For Ahmad, his experiences has been all about putting tools in the hands of people to help them build audience, community and economic returns from their creativity.  And as both an advisor and venture capitalist, Jason helped bring products that empowered individuals. Joy and Emmanuel have helped bring small businesses to the mainstream with background in investment management and social enterprise.
  • Investment: We hope to help founders build and grow profitable companies. The transition from a Top Down to Bottom Up Economy will create many innovative companies that will lead their industries for years to come.  We also believe that as software progresses in the world, leaders in every business vertical find themselves facing ‘buy, build or partner’ decisions with innovative upstarts.  This dynamic creates fantastic strategic opportunities for founders in countless industries – retail, financial services, transportation, business software, media, education, agriculture etc. – as every leader and company will be paying attention to new companies disrupting their markets.
  • Founder Mentality: We’ve observed that Bottom Up founders are disproportionately mission-driven in their work.  Their business models rely on creating real, tangible value for their customers. They believe the problems they solve are empowering people.
    We believe that being mission-driven is a competitive advantage for an entrepreneur. Mission-driven founders are better recruiters – they can explain the “why” not just the “what” and “how” of their vision. Their convictions make them better leaders, and their passion adds energy to every room and every team.  And we like hanging out with them.

Types of Companies Powering the Bottom Up Economy
It’s not about a particular industry or business model. Categories of companies included in the Bottom Up Economy are software-as-a-service for small business, API-based platforms, vertical marketplaces, direct-to-consumer businesses/services and peer or collaborative economies.  These types of companies often have key characteristics that we look for in our investments: strong network effects, rich data assets, inherently viral growth vectors and long-term defensibility.

In order to gain investment from LabEight* Fuel Fund, a company needs to demonstrate the ability to grow quickly, the aptitude to scale effectively with the team’s perceived ability to do so and the potential to making a return on that investment is the key determining factor

LabEight* Fuel Fund is convinced that the opportunity exists for African entrepreneurs to build transformational companies. We also appreciate that founders have options when choosing who to partner with and that picking the right investor is not always easy. We are transparent about our preferences and look forward to working with start-up teams where we share a common vision.

Notes For Series Investments
Companies we invest in will have the following characteristics:
– At least 1-2 years operating experience in African;
– Uses technology to transform an existing industry and has a business model that is defensible against competition;
– Has achieved product-market fit, and is generating repeatable revenue (Minimum US$10K MOM with potential realization of ROI within the first 1 to 3 years of investment)
– Is ready to take in US$500K-1M to scale their business development, marketing, operations, or product/technology processes, and in due course expand to other markets in the continent.

Notes For Seed Investments
Companies we invest in will have the following characteristics:
– Uses technology to transform an existing industry and has a business model that is defensible against competition;
– Path to Customer: Our model works best if there is a pathway to revenue, so we like to see at least some evidence of acquiring customers outside of immediate network (friends, family, colleagues).
– Is ready to take in US$100K-500K to scale their business development, marketing, operations, or product/technology.
– Has graduated from LabEight’s Launchpad Accelerator Program

Definitions

Early-Stage – Early-Stage, to our fund, means the company has a developed prototype of its product/service or some traction. A company at this stage has begun operations, but may not yet be at the point of commercial manufacturing or sales. Their products or services may or may not be commercially available, or the business may have a few initial customers.

Growth-Stage – At this stage, companies have had their first initial orders, or perhaps a few customers. These companies are showing the ability to grow, but may not be able to fulfil or support large orders and need financing to effectively scale.

Blended fund strategy – Seed stage, category-defining start-ups through the Launchpad with a view towards maximum exits in the typical exit window of 3-7 years, and Growth Stage Companies with a view towards revenue sharing and faster exits.

FAQs

1) How does LabEight* Fuel Fund identify potential investments?

At LabEight* we look for 3 key things initially. First we look for companies and founders working on innovative solutions in niche or growth markets. Second, we look for companies with revenue and are tracking towards 1MM in annual revenue. Additionally, we want to ensure that we can see a path to 10MM in annual revenue. Finally, while placing the company’s financials in our proprietary calculations, we look to ensure that our model is a good fit for their business model and market. Though we will always remain opportunistic we want to ensure that our model meets the needs of the founder and their desired path of growth.

2) How does this portfolio differ from other funds?

Because LabEight* has identified a massive gap, and consequently an opportunity, in the funding market we have created a new approach/financial product to close the gap. This solution to this identified gap and leveraged networks of the founders has often and continues to find the best companies to invest in financially.

3) Are there investments LabEight* will not make?

Our investment framework is based on impact and guided by the redemptive investment mindset. We see a lot of potential for our model in direct to consumer companies and enterprise software. We’ve also seen early signs of potential in tech enablement and productivity businesses. Finally, we won’t invest in industries/businesses that require long research periods or changes to policy for the product to eventually “fit” a market. These include, advanced hardware/electronic devices (think a new automobile) and aerospace/transportation (trains/rockets/etc.) companies. Additionally, our investments will be, in many ways, reflective of what we (the General Partners) collectively believe in.

4) Is LabEight* currently making new investments?

We are actively evaluating companies to start capital deployments in Q2 2021. We launched our Inaugural Launchpad Accelerator Program in September 2020 with four early stage companies.

5) What is LabEight’s due diligence process?
Early stage companies are identified within our Launchpad Accelerator which provides diligence, as well as legal, financial and growth potential diligence.
Growth-stage companies are Identified via set parameter stated on the fund/investment thesis.

Website: https://labeight.tech/labeight-africa/