- November 30, 2020
- Posted by: pragma_admin
- Category: Uncategorized
A new financial instrument to help mitigate the economic crisis
The Bridge fund has been designed to provide an appropriate response to the challenges confronting young innovative African companies, whose development is harmed by the economic impacts of the Covid-19 pandemic.
This fund looks like the French Tech Bridge, with the aim of offering a kind of bridging loan, over a maximum period of 24 months, to companies whose fundraising process has been cancelled or delayed due to the global economic crisis and the contraction of the investment market.
€5 million potentially multiply by co-investment
The budget of the fund amounts to €5 million.
The mechanism provides that the proposed packages – between €200,000 and €600,000 – have to be co-financed by institutional investors who have already deployed investments in Africa. This approach should trigger a leverage effect able to potentially multiply the €5 million allocation.
The amounts will be released in the form of loans, on attractive terms.
A fund specially created for young innovative African companies
The Bridge fund targets young innovative companies, whose core business is digital, which are at least 18 months old and have already received funds from an investor or a recognized structure.
Companies keen to apply must also have generate 75% of their turnover of at least €200,000 on the continent or have at least half of their teams working there.
The sectors targeted are all strategic for the African economy: agriculture, energy, education, health, financial inclusion, logistics, green mobility.
A simplified and rapid process
Promoted by Digital Africa and deployed by Proparco, a subsidiary of the French Development Agency dedicated to the private sector, the two organizations have been working on a simplified and rapid process, both for reviewing applications, which takes no more than 8 weeks, and for formalizing contracts and allocating funds.