This April, Black Espresso, the famed South African DJ and document producer whose actual title is Nkosinathi Maphumulo, made historical past on the Grammys. Together with his seventh studio album “Subconsciously,” he grew to become the first African act to win an award within the Finest Dance/Digital Album class.
His win got here when the worldwide urge for food for Amapiano, a style of house music that emerged in South Africa, and Afrobeats, a popular music genre that originated from Western Africa, had elevated exponentially. It was a much-needed success for the African music scene, and although it didn’t seem so, it was a lift for its tech scene.
Over the previous couple of years, there’s been an overlap between tech and artwork, fueling a rising curiosity of film, music and sports activities stars investing in tech startups. A few of them — together with Grammy Award-winning artists resembling Jay-Z, The Chainsmokers, Nas, and others like Snoop Dogg — have launched varied funds to put money into startups within the U.S., Europe and globally.
Thus, for Black Coffee, who backed Andela, a tech expertise incubator and unicorn launched from Lagos in 2015, his win meant Africa’s tech scene might, for the primary time, brag about having a homegrown Grammy Award-winning artist as an investor in its startups.
What’s pulling African music artists to tech funding?
Earlier than Jay-Z (Shawn Carter) co-founded Marcy Ventures in 2018, he was concerned with different companies such because the legacy leisure firm Roc Nation and champagne model Armand de Brignac. His music profession gave him the assets and entry to diversify his monetary pursuits, together with in startups, regardless of the life-style contrasts between the tech and leisure worlds.
One African artist that hasn’t hidden his love for Jay-Z’s entrepreneurial strikes, and appears to be adopting the billionaire’s playbook, is Mr. Eazi (actual title Oluwatosin Ajibade).
“The primary driver for me to enter music was studying a guide known as ‘Empire State of Thoughts’ about Jay-Z,” Mr. Eazi advised Nob6 on a name. “I had a ardour for music and realized early that the music enterprise would give me entry to the place I wished to be. It’s like a approach for me to have all the liberty I wished and nonetheless get to the vacation spot of monetary independence by making a number of investments.”
Final August, the favored Afrobeats singer and songwriter made headlines in Africa’s tech circles following his investment in pawaPay, a U.Ok.-based and Africa-focused cellular funds firm via Zagadat Capital. However not like Jay-Z, Mr Eazi had a tech background earlier than fascinating audiences with hit songs like “Pores and skin Tight,” “Hollup,” and “Leg Over” and producing three mixtapes and two EPs throughout his lengthy music profession.
In 2014, Mr. Eazi launched Phonetrader, a web-based used telephone market backed by a now-defunct startup incubator, 440NG, which was run by two funding corporations, L5Lab and 88mph. Whereas Mr Eazi discovered the ropes of beginning an organization and scaling merchandise throughout his time at Phonetrader, he additionally acquired to grasp funding dynamics from Chika Nwobi, the founding father of L5Lab and present chief govt of Decagon, an engineering expertise recruitment platform, after attending a number of investor conferences.
These classes would show useful in 2019 as Mr. Eazi — after constructing his presence abroad and connections within the U.S., the U.Ok. and Europe — launched EmPawa Africa, an outfit to speed up the music careers of younger artists. “After I began emPawa Africa, I wished to experiment with the VC mannequin by investing in lots of artists,” stated the artist who lately accomplished a program at Harvard Enterprise College.
The company — which has spun out the likes of Nigerian artiste Joeboy and Ghanaian artiste Kwesi Arthur — now has its tentacles unfold in advertising and marketing, distribution, publishing, administration and finance providers for impartial artists and document labels. It additionally white-labels its platform for events that wish to put money into African music; for example, the $20 million African Music Fund (AMF) project in 2020.
Ajebutter22, a Nigerian-based music artist and rapper whose actual title is Akitoye Balogun, agrees with Mr Eazi’s philosophy of investing in creatives. In response to him, powering artists and folks within the artistic house ought to be carried out in a startup/VC method. “A few of the investments I’ve made within the music house have been via that mentality of seeing an artist or mission as a fast-growing car,” stated Ajebutter22 in an interview with Nob6.
Like Mr Eazi, the songwriter, well-known throughout the Lagos celebration scene with hit singles like “Tungba,” grew up keen on tech. In 2013, he flirted with an thought for a platform that would assist folks pay for songs on their telephones. Although it by no means took off resulting from lack of funding, the method of getting the mission off the bottom and studying books like “Zero to One” and “Exhausting Issues About Exhausting Issues” opened the artiste’s thoughts to the chances round tech.
Ajebutter22 would work at Gamsole, a gaming startup, and Cisco earlier than venturing into angel investments in 2020. “It was about proudly owning one thing larger than myself, which could be nice sometime. That was behind deciding to put money into tech,” stated the artist who has invested in AltSchool, a talent-matching platform, and Nestcoin, an Africa-focused web3 startup.
From particular person checks to launching funds
Private relationships constructed through the years have been important to how Ajebutter22 has made investments, a way perfect for a really early angel investor. As an example, he’s a longtime good friend of Nestcoin chief govt Yele Bademosi, and he knew Adewale Yusuf, the co-founder and CEO of AltSchool, from his time at Gamsole. The AltSchool funding additionally recorded participation from one other music artist and collaborator, Falz (actual title Folarin Falana).
“I believe crucial factor whenever you wish to make investments is to know the group you’re backing as a result of something can change at any time. The market measurement, in fact, is extraordinarily essential too, however for me, who you’re backing is essential,” he stated.
If Ajebutter22 plans to vary his technique as he makes extra angel investments, organising a proper construction like Zagadat Capital — which Mr Eazi references as a collective — will probably be important.
As a collective, Zagadat Capital includes “like-minded people who find themselves younger, African and see investing in African tech corporations as thrilling,” stated Mr Eazi. Household workplaces are a part of this collective along with founders like Shola Akinlade, the co-founder and CEO of Stripe-owned Paystack, and Iyinoluwa Aboyeji, co-founder of Expertise Metropolis.
Expertise Metropolis, the city growth startup that plans to create constitution cities throughout Africa, is among the most audacious tasks on the continent and is a portfolio firm of Zagadat Capital. Others will not be as sophisticated: Eden Life, a concierge startup, and betPawa, a web-based betting firm. This deal protection exhibits selection in Mr Eazi’s picks; the artist additionally factors out that his collective supplies a singular benefit for portfolio corporations in that its members, consisting of some celebrities, can double as shareholders and influencers.
“It’s not simply cash or to get some conferences. We are able to additionally assist the group to scale after we promote. You’d see me promoting betPawa, for example. I’m getting paid, however I’m an investor and a shareholder,” he stated. “On the finish of the day, we’ve got extra leaning in direction of investing in corporations the place the flywheel could be enhanced. It’s an ecosystem that retains feeding itself and rising to the purpose the place it’s sustainable.”
Exterior Africa, Mr Eazi has reduce checks in Mexican fintech Paisa and Irish-based fraud prevention supplier Apata. He additionally has different leisure investments asides from EmPawa Africa: YC occasions firm Shoobs and U.S.-based music startup Vydia. These two investments emphasize the artists’ play to develop the curiosity of Africans in international leisure spheres, significantly as music from the continent will get popularized. “The explanation I’m investing in music tech is to ensure we’ve got African fairness within the buildings which can be integral to the ecosystem as a result of that’s the place the actual energy and worth lies,” remarked Mr. Eazi.
Total, it’s a large portfolio for an artiste-cum-investor with just one yr of energetic funding historical past below his belt. With time, Mr Eazi acknowledges that he’ll go all out to lift a fund and make investments extra in depth checks, identical to his mentor, Jay-Z, did in 2018. “For now, we’re going to nonetheless keep at a collective. However when it’s time to develop, I’ll want no person to inform me. It’s going to be a gradual course of.”
Black Espresso handles his offers via Flightmode Digital, a enterprise capital agency he arrange in 2017, in response to PitchBook. The agency — which says it seeks to put money into early-stage companies working in video content material creation and manufacturing and software program growth — has backed a number of startups, together with Yoco, a South African funds startup that has raised over $100 million in VC funding; SweepSouth, a cleansing and residential service startup; and Rensource, a renewable power firm.
It’s unclear whether or not Black Espresso raised a set capital to speculate via Flightmode Digital as a result of, judging by its on-line presence, it seems extra like an funding holding firm than a conventional VC agency. Nevertheless, the hassle displayed by Ajebutter22, Black Espresso, Mr Eazi, Falz and some below the radar means that it’s solely a matter of time earlier than native artists, no matter their technical backgrounds, launch VC corporations and funds like their international counterparts because the continent’s tech scene — which has acquired $3 billion price of enterprise capital funding within the first half of this yr — continues to blow up and extra exits occur.
“Why it appears artists aren’t keen on startup investing is as a result of some nonetheless must deal with their instant wants; some folks won’t perceive a few of the issues being solved,” Ajebutter22 stated. “However I additionally suppose that increasingly artists will probably be in that house over time. I believe African artists have gotten extra developed and uncovered, and if one or two success tales occur, it can encourage them to go all in.”