North Africa

Fundraising for $24 m Hummingbird Impact Fund adjourned due to COVID-19

Non-profit Engineers Without Borders (EWB) Canada ‘s impact of the COVID-19 pandemic has postponed the start of fundraising for its US$ 24 million Hummingbird Impact campaign.

Disrupt Africa reported on EWB Canada ‘s launch of Hummingbird Impact in March, which said its new investment fund will provide early institutional capital and portfolio support to African tech projects that are both for profit and impact focused.

In order to “catalyze and de-risk disruptive and highly scalable strategies to bring structural change to an undercapitalized and skewed environment,” the Gender Impact Investment Fund was created. At the time, EWB said that Hummingbird claims that local and female entrepreneurs are ideally equipped to create opportunities for women and disadvantaged African communities.

Hummingbird initially set out to raise a US$ 20 million blended-finance impact fund which it planned to augment with a US$ 4 million facility for technical assistance to improve its portfolio’s growth and impact results. CEO Boris Martin, however, said EWB has now agreed to delay the start of fundraising for Hummingbird until the first quarter of 2021, in the light of the global pandemic.

Meanwhile the company has left Hummingbird Effect founding partner Muthoni Wachira (read our interview with her as part of our “Meet the Investor” series here). EWB said it is currently focused on actively supporting its existing portfolio of seed stage projects, including Kenyan agri-tech startups LishaBora and FarmDrive, Zambian asset financing company Rent to Own, Ghanaian mobile interaction platform Viamo, and Ugandan credit provider Numida.

Although concerns about COVID-19 ‘s effect on tech start-up funding in Africa are well known, there has been little evidence of a decline in funding so far as start-ups continue to raise ample investment to keep 2020 on track to be the best year ever in that regard. However, with VC firms having active funds dedicated to investing this money, COVID-19 ‘s big effect is likely to only become fully visible as VC firms attempt to collect new funds from limited partners (LPs). The decision by EWB Canada to delay fundraising for Hummingbird Effect shows the obstacles it faced in this regard, and is not good news at all for other VC firms or for the environment at large.