USDC-issuer Circle backs CV VC’s $20M African Blockchain Fund

Circle Ventures, the venture arm of USDC issuer Circle, has joined as a limited partner (LP) in CV VC’s $20 million African Blockchain Fund, which backs promising blockchain startups across the continent.

The details 

• CV VC’s African principal and head of growth, Brenton Naicker, announced on social media that Circle is backing the fund to support African blockchain innovators.
• Circle Ventures’ exact contribution to the African Blockchain Fund is undisclosed, but the fund aims to invest $20 million in African startups over the next 8–10 years.
• CV VC has already backed several African startups and enrolled others in its global nine-week accelerator, which typically ends with grants for participants. 

Key quote 

• Naicker posted on LinkedIn: 

“Thrilled to announce that Circle Ventures has backed our CV VC African Blockchain Fund to support Web3 innovation across Africa... As stablecoins and Web3 technology continue to flourish across Africa, we remain committed to supporting pioneering founders driving change. We look forward to advancing the future of Web3 together with the Circle Ventures team.” 

What firms can get funded?

• Per Brenton Naicker, the African Blockchain Fund is not essentially for early-stage startups looking for angel or pre-seed funding to get off the ground and running.
• Instead, the fund will look to invest in projects that are past the ideation stage and with a minimum viable product already bringing in some revenue.
• These projects must have demonstrated at least three months of steady revenue growth. The CV Labs accelerator, on the other hand, still rewards great ideas and not always projects that are already running. He said:

"We are looking for a demonstrated history of growth in revenue and users in the business ... That's essentially the minimum criteria. We don't invest in ideas. You need to be post-MVP post-traction with a demonstrated ability to monetize your product."

Before now 

• Launched in 2022, the African Blockchain Fund is CV VC’s early-stage vehicle dedicated to African blockchain startups, with investments starting at $100,000 and a planned lifespan of up to 10 years.
• Startups that receive funding also gain access to a 10-week accelerator designed to strengthen their operations and attract further investment.
• According to CV VC, the African Blockchain Fund has facilitated investments in 13 African companies since its launch.

Its annual accelerator, run by the firm's incubatory arm, CV Labs, has also given grants to notable African firms. Some of these are Nigeria-based cross-border payments company Ivorypay and South African online training platform, Web3 Sanctuary. 

• Naicker told Mariblock that funds awarded via the accelerator program are not to be confused with the African Blockchain Fund, as while they both aim to support blockchain founders, the mediums are different.
• Most notably, while the CV Labs accelerator gives grants to participants, the fund run by CV VC itself invests in promising startups, with an accelerator as an added advantage to the investment. He said:

"These [the CV Labs Accelerator and the African Blockchain Fund] are two very separate things. As a fund, we run our own accelerator, where we invest in companies from that fund vehicle, but we also have a second business unit called CV Labs."

Zoom out 

• According to CV VC’s annual blockchain funding report, African blockchain startups still struggled to raise funds last year compared to the successes they recorded in 2022. 
• This highlighted a cautious funding environment and a slow recovery from the funding dearth induced by the crypto bear market from late 2022 into 2024. 
•  The report said African firms raised $122 million across 30 deals, 2.3% of the global capital. 
• However, the report focused exclusively on venture capital investments and does not include grants to which many early-stage African founders are now turning to for operational funds.