List of Early Stage Investors in Ethiopia 2024

Imagine having a groundbreaking idea that could revolutionize your industry, but lacking the resources to turn it into reality. That’s the harsh reality for many Ethiopian entrepreneurs. Despite a flourishing startup scene, a significant funding gap cripples early-stage ventures.

Here’s a glimpse into the challenge:

A Multi-Billion Dollar Shortfall: World Bank data reveals a staggering USD 3.9 billion (200 billion birr) financing gap for Ethiopian SMEs, encompassing startups. This translates to limited access to capital for many budding businesses.

Regional Laggard: Compared to regional powerhouses, Ethiopia’s startup funding paints a grim picture. A Substack report highlights a one-billion-dollar deficit compared to Kenya’s robust investments last year. Ethiopia only managed a meager six million dollars, a mere 0.5% of the total regional funds.

This disparity places Ethiopia at a critical crossroads. While neighboring countries like Kenya (USD 1.16 billion), Tanzania, Uganda, and Sudan actively fuel innovation, Ethiopian startups struggle to secure the funds needed to thrive.

In this article, we have curated a list of investment firms/Networks that provide funding for pre-seed and seed-stage startups.

1. Addis Abeba Angeles (AAA) Network

If you have an innovative idea for a product or service and just need early-stage funding to launch it, then Addis Abeba Angeles Network may be the answer. The Addis Ababa Angels Network offers you an equity investment, mentorship, and our diverse expertise to launch and grow your business.

Founded by a group of investors in 2020, Addis Ababa Angels Network invests in startups and entrepreneurs in exchange for equity ownership aiming to build a robust startup ecosystem in Ethiopia that addresses the existing funding gap and targets early-stage innovative startups.

To be fit for funding from Addis Abeba Angles Network, Your Startup Business must be technology-enabled, must have at least two co-founders as well, and must have an MVP (Minimum Viable Product).

AAA has previously invested an undisclosed seed investment in Ethiopian Startups like Eshi Express. 

2. Blue Moon Ethiopia

Blue Moon’s seed funding is based on a “10-10-1” model: they invest the equivalent of US$10,000 in each startup in return for 10% equity. They also require each team to invest US$1,000 themselves, which is known as “skin in the game.”

According to information on their website, their model is based on a fixed pre-money valuation for all startups accepted into the BlueMoon Incubator.

This fixed valuation avoids the near-impossible task of determining a company’s valuation at the idea stage. By providing seed funding at this very early stage, they take on the highest risk but also enable their startups to have a baseline valuation when seeking further funding from commercial investors in later rounds.

3. Orange Digital Ventures

Established in 2015, Orange Digital Ventures (ODV) is the strategic investment arm of the Orange Group, a leading telecommunications operator in Africa and the Middle East.  Think of them as the tech incubator within a giant telecom company, fueling innovation and growth across the continent.

Their focus spans various stages, including the crucial seed stage, where promising ideas receive the initial funding needed to blossom. Orange Digital Venture has previously invested in Gebeya

4. Microtraction

Microtraction is a venture capital fund that invests in Africa’s most promising early-stage, growth-driven technology startups. Founded in 2017 (not 2016), this Nigerian venture firm focuses on sectors like Big Data & Analytics, E-commerce, Education, Fintech & DFS, FoodTech, LegalTech, Marketing, Mobility, and Software.

Microtraction offers pre-seed funding for African tech-enabled startups. They have previously invested in 66 African companies, supporting 108 founders. Their portfolio companies are currently valued at over $700 million. They offer investment options at both the pre-seed and seed stages.

5. Consonance Investment Managers

Consonance investment managers focus on investing in high-quality early-stage and growing businesses across Sub-Saharan Africa.

Founded in 2017 and headquartered in Nigeria, Consonance is a venture capital firm offering pre-seed and seed investment options.

They focus on sectors including Agriculture & AgTech, Education, FinTech & DFS, Food & Beverage, FoodTech, Health, HR Tech, Insurance, Jobs, LegalTech, Logistics, On-Demand Services, Professional Services, and Software.

Consonance boasts a portfolio of 37 active companies, including Gebeya (valued at $500 million), across 8 African countries. They are committed to supporting women founders, with 43% of their portfolio companies led by women.

6. Kazana Fund

Launched in 2022, Kazana Fund is a venture capital firm built on community. They focus on investing in early-stage startups led by African founders, with a particular interest in East Africa.

If you have a disruptive idea and are seeking pre-seed funding, Kazana Fund might be the perfect fit. They understand the challenges faced by early-stage founders, stating: “Send us your pitch deck if you’re looking to raise your pre-seed/seed round and are looking for investors who are invested in your future. We’ve been there, we know the struggle, so we’re here to challenge the face of the tech ecosystem by driving more capital and support to African entrepreneurs.