EchoVC, a Lagos-based early-stage VC firm focused on investing in underrepresented founders and underserved markets, has launched a blockchain-focused seed fund called EchoVC Chain. The $8 million pilot seed fund is aimed at investing in startups and founders that span EchoVC’s specific areas of interest, as first reported by Disrupt Africa.
Also, blockchain technology has immense potential to transform Africa’s financial sector and boost its economy. EchoVC believes that blockchain functionality is more of a need than a want in African markets, and the fund aims to leverage these functions to unlock novel market opportunities across the continent.
The founders and managing partners of the blockchain-focused VC firm, Eghosa Omoigui, Tsendai Chagwedera, and Deji Sasegbon said in a blog post, “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.”
EchoVC’s Investment Interests
EchoVC Chain will focus on three layers: foundational fintech infrastructure, blockchain functionality, and decentralized autonomous organizations (DAOs). By investing in these areas, the fund can drive innovation, improve access to credit and savings, and increase earning potential for the bottom-of-the-pyramid demographics.
The first layer of focus is on foundational fintech infrastructure, which includes infrastructure leveraging stablecoins to optimize payments, liquidity, and treasury, and exploring the unbundling and delivery of crypto/fintech building blocks. These building blocks can be utilized by other companies to scale faster, driving innovation in the fintech sector and creating new market opportunities.
Furthermore, the second layer of focus is on blockchain functionality, with a particular focus on DeFi functionality. DeFi can be leveraged in Africa for innovative financial products that improve access to credit and savings or power new-age decentralized neobanks. NFTs can foster the creator economy for the rising Gen-Z, enable games to provide new ways to earn, or even fractionalized real-world assets and portfolios to lower affordability barriers to investments.
Also, the third layer of focus is on DAOs, which can scale autonomously and organize human networks. DAOs can organize the offline and informal networks in a way that is beneficial for all participants, unlocking labor liquidity and increasing earning potential for the bottom-of-the-pyramid demographics. Decentralized agent networks, social networks, and gig networks are just a few examples of how DAOs can transform the African economy.
EchoVC also Excited about CBDCs
The advent of central bank digital currencies (CBDCs) is also tremendously exciting for EchoVC. CBDCs have the potential to remove friction in access to financial products, streamline cross-border payments, and enable programmable local money. By investing in startups that leverage CBDCs, EchoVC can drive innovation in the fintech sector and create new market opportunities.
In addition to the above layers, EchoVC is also exploring other emerging blockchain aspects ranging from digital identity, privacy, decentralized infrastructure edge nodes, and agile supply chains to a possible future intersection between AI/ML and DAOs. By investing in these emerging technologies, EchoVC can drive innovation in the African tech ecosystem and create new market opportunities.
Regulation is also an important aspect of the blockchain ecosystem. EchoVC believes that regulation is required and will have a positive impact in guiding innovation, improving stability, and removing frictions that still exist between decentralized and centralized worlds.
The VC firm, which says its mission is to be “the Sequoia Capital for underestimated founders and markets”, has invested in almost 40 companies across various markets worldwide, and made its first investment in the blockchain segment in 2021. The firm has the potential to transform the African blockchain ecosystem by investing in startups that leverage blockchain technology to drive innovation and create new market opportunities. By focusing on foundational fintech infrastructure, blockchain functionality, and DAOs, EchoVC can improve access to credit and savings, increase earning potential for the bottom-of-the-pyramid demographics, and drive innovation in the African tech ecosystem.