Venture capital firm Uncap has announced the launch of Unconventional Capital, a €30 million fund aimed at addressing the capital-raising challenges that early-stage African small and medium-sized enterprises (SMEs) face. The fund focuses on non-dilutive, revenue-based financing, offering a flexible alternative to traditional equity funding models, which often dilute the ownership of entrepreneurs.
Unconventional Capital is designed to support SMEs in high-impact sectors, providing them with the necessary financial backing to scale their operations. The fund was launched in collaboration with notable partners such as SAIS, an agriculture tech initiative funded by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), and O-Farms, a circular agriculture program backed by the Ikea Foundation.
The establishment of the fund reflects the critical role that venture capital is playing across Africa, particularly in the development of innovative digital solutions. Uncap’s fund has attracted backing from global institutions like the Bill and Melinda Gates Foundation and the Bayer Foundation, signaling growing confidence in its unique approach to alternative financing.
In addition to launching the fund, Uncap announced the separation of its financial operations from its technology platform, Level, which operates as a SaaS platform designed to simplify investment management for funders and accelerators across Africa. This move will enable Uncap to focus more closely on personalized financing solutions for SMEs.
The fund will be co-led by Esther Ndeti, Uncap’s current investment principal, and Franziska Reh, the CEO of Uncap, both of whom will serve as managing partners. According to Ndeti, Unconventional Capital seeks to transform SME financing by providing more **inclusive and scalable funding options** for businesses in underserved regions, ultimately contributing to sustainable economic growth across Africa.
This launch comes at a pivotal time for Africa’s SME sector, which accounts for 90% of businesses on the continent but continues to face barriers in accessing essential funding. Unconventional Capital’s innovative approach to revenue-based financing aims to fill these gaps, providing the flexibility SMEs need to thrive and expand.
