bne IntelliNews – The first woman who discovered Jack Dorsey’s new bitcoin bet in Africa

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In December, the investment community learned of Jack Dorsey’s most recent moves in Africa when his tech conglomerate Block, Inc. co-led a $2 million investment round in Gridless, a bitcoin mining company helping to bring a new generation of energy to rural communities in East Africa. .

All eyes were on Dorsey, former CEO and co-founder of Twitter, and bitcoin-focused venture capital firm Stillmark, whose capital injection Gridless reportedly intends to use to open new mines. . It was the postman[e] Ventures, however, a team of impact business builders focusing on potential disruptors in the fields of energy, agriculture and mobility, led by Lynsday Holley Handler on the ground in Africa, which has d first put his weight behind Gridless.

Really big founders want other entrepreneurs who have built things and understand the opportunities and challenges they face to invest in them, Holley Handler said in an interview from her home in Kenya. We do a lot of technical due diligence six months of due diligence in the case of Gridless. We understand energy inside and out and are one of the few truly early-stage tech VCs here on the ground in East Africa.

Holley Handler is a partner and project manager at Factor[e] with more than 18 years of experience in business creation and several successful exits to his credit. Before Factor[e]she was CEO of Ugandan startup Fenix ​​International, which expanded to 6 countries before being acquired in 2018 by Engie, a global energy player headquartered in Paris, France.

However, it was in 2006 that Holly Handler first met Erik Hersman, co-founder and CEO of Gridless. After they first met at TED Africa in Tanzania, the two stayed in touch, making Handler one of the first to discover Gridless last year.

Postman[e]s bitcoin play for affordable electricity

In a nutshell, Gridless designs, builds and operates bitcoin mining sites alongside small-scale renewable energy producers in rural Africa where excess energy is not being used. The company serves as an anchor tenant, financing the construction and managing the operation of data centers in rural communities where traditional industrial or commercial customers are unavailable, according to its website.

Postman[e] led the $300,000 pre-seed round in Gridless in June 2022, which helped put the company on the radar of institutional investors and Silicon Valley movers. The venture capital builder then committed an additional $300,000 in the company’s latest round in November alongside Bloc, Inc. and Stillman in a deal that was made public this month.

We have benefited greatly from Factor[e] supporting and supporting Gridless from day one. Hersman said in a statement for bne IntelliNews. Their experience and connections in the renewable energy space in Africa allowed us to more quickly understand the challenges of mini-grid operators and find partners who fit well.

Postman[e] Venture Studio grows

Right now Handler is busy building the Factor[e] Venture Studio, looking for great ideas and teams on the ground in Africa, helping them raise funds and providing post-investment support. Postman[e]’s growing portfolio companies are solving some of Africa’s biggest income inequality and climate change problems.

We help founders build and test their first products and business models with real customers in the African market, she said. We invest significant capital in companies at the ideation and pilot stage to help entrepreneurs focus on building scalable solutions and businesses that solve big problems rather than focusing on raising funds for the first year. Finally, we offer entrepreneurs a community of other founders, investors and specialists who can accompany them on their entrepreneurial journey.

Handler also recently helped connect Dorsey with Kenyan entrepreneurs from venture capital studios, accelerators and other entrepreneurial communities during his first-ever visit to the East African country.

My conversations with incubators have been my favorites, Dorsey said at an invitation-only gathering of entrepreneurs, tech enthusiasts and investors Dec. 8 in Kenya’s capital Nairobi. These are always the best conversations because there is so much optimism and a desire to solve people’s problems.

Venture capitalists reduce risk for African startups

The business builder approach is the best way to harness Africa’s most promising startups, according to Handler.

Beyond finding great people and ideas and helping to capitalize on them, we are here on the ground and in constant contact with the companies we invest in, providing advice and support, she said. . In fact, what we do at Factor[e] is to de-risk these startups, paving the way for greater venture capital and institutional capital to flow to the continent’s most promising companies.

Gridless is a great example of Factor business types[e] finds, supports and helps take off. Admittedly, the problem that Gridless tries to solve is not insignificant. In 2020, more than 50% of Africa’s population was without electricity, highlighting the immense demand for reliable, clean and affordable energy for this region.

Africa needs affordable electricity, Hersman said in a statement. Our work supporting renewable energy mini-grid developers fills a gap, helping developers grow faster, be more sustainable, and serve thousands of homes. This investment, and the high caliber of partners behind us, means that we can accelerate our deployment knowing that we have both the capital and the strategic support necessary.

Gridless currently has three operational pilot sites in Muranga, a rural town northeast of Nairobi. Each mine runs on hydroelectric power from HydroBox, a mainland-based energy company. Two of the mines have a capacity of around 50 kilowatts and over the next few weeks the third mine will increase to 300 kilowatts.

The plans are impressive, considering that just 50 kilowatts would power around 800 homes. In January, Gridless plans to launch another 50 kilowatt hydroelectric mine in Malawi and its first solar power site in West Africa which will have a capacity of 30 kilowatts, the company told CNBC.

Dorsey sees Africa as the future with other investors in tow

Right here [in Africa] you immediately feel the need and the need,” Dorsey said at the Dec. 8 event, hosted by iHub, an innovation hub and hacker space for the tech community in Nairobi. That’s what really cemented my interest in Africa and the people here.

He took a particular interest in Africa a few years ago because, as he said, he saw the future there. This sentiment appears to be shared by Handler and other investors.

Visa Foundation and Mastercard Foundation Africa Growth Fund recently announced their investment in Nigerian equity-focused, gender-focused firm Aruwa Capital Management, helping the Lagos-based company raise more than $20 million for startups led by women. And just last month, the International Finance Corporation, the private sector arm of the World Bank Group, announced it would invest $225 million in a venture capital program to fund tech startups in Africa. and in the Middle East.

IFC’s venture capital platform will help technology companies and entrepreneurs grow in times of capital scarcity, creating scalable investment opportunities and supporting countries’ efforts to create transformative technology ecosystems. We want to help develop innovative local solutions that are not only relevant for emerging countries but can also be exported to the rest of the world, said Makhtar Diop, chief executive of IFC, in a statement to TechCrunch.

Positive investment momentum and new opportunities in Africa

Capital crisis or not, Africa has never really been blessed with a glut of venture capital money, at least not in absolute terms. However, investments have steadily increased, with African startups attracting a record $3.5 billion in venture capital investments in the first half of 2022, representing a growth of 133% compared to the same. period last year, according to the African Private Equity and Venture Capital Association. So there is a good chance that 2022 will turn out to be a banner year for venture capital investments in Africa after all, with even better and brighter things to come in the new year.

We see opportunities across Africa, particularly when it comes to tech companies in Kenya, Nigeria, Ghana and Addis, some of the largest and most entrepreneurial ecosystems, but we are also open to big founders and ideas in other markets across Africa, Holley Handler said, adding that what really drives her is making cutting-edge technology accessible to everyone.

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