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Carbon is becoming a venture capital portfolio company. But is it prepared for its volatile chemistry?



Carbon is becoming a venture capital portfolio company. But is it prepared for its volatile chemistry?

Money lender and Fintech startup, Carbon, is on its way to become a Pan-African venture capital portfolio company as it sets to offer $100,000 in funding to support African innovators.

Like established VC companies such as Microtraction, TLcom, Kord Capital, Lighthouse; micro money lender Carbon intends to fund African tech startups (in insurance, health and education) looking for financial support to scale in their respective markets.

According to the designed framework binding the new Carbon’s initiative, successful startup will receive $10,000 for 5% equity to Carbon, the funding partner.

While commenting on the development, Chijioke Dozie, CEO and co-founder, Carbon, xpressed his company’s motivation, noting that there was the need to dominate and scale as a business entity.

“Common investor wisdom is to stay in your market and dominate. This assumes that you are expanding on your own but we believe that by collaborating and partnering deliberately, Carbon and other tech companies can scale faster and build more enduring platforms.

“There are many excellent companies across the continent looking for the kind of scale Nigeria offers and we are excited to partner with them to provide the support and financial investment they need,” the CEO stated.

This new funding offering is coming barely 2 weeks on the heels of its recent build-up development where Carbon took its money lending services to another estimated 9 million potential customers with the building of its iOS App.

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After having operated as a micro lender in Nigeria and Kenya, expanding yet again into VC string will lead Carbon to become the lastest large lender, sticking out its head for opportunities in the new space as well as stand to burn its fingers should its venture cease to be promising.

Analysts in equity investing have always warned new entrants to take caution in identifying startups with prospects in order to get the value on every investment.

To operate as a VC firm, Carbon will be doing a lot of homework ensuring it’s investing in a scaleable business.

This is so because unlike in its micro lending service where loans are given out based on limited terms (such as use of collateral) and a proven possibility of a repayment; here, as an angel investor, Carbon will be doing more.

To record success, therefore, requires the firm to get down to research each applying startup’s manager’s history, examining the successes he/she has recorded in the past to project the chances of replicating same after investing.

Carbon must also be careful not to fall prey of investing in ventures that might have scores to settle with government as the recent #Okadaban is enough lesson for any individual and corporate firm entering to fund an initiative for equity.

It is, therefore, for these many reasons that we ask if Carbon is actually ready to stake its $100,000 in such a volatile space.

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