StarkWare initiates $4M fund for blockchain projects in Africa

StarkWare has introduced a $4 million fund to support blockchain startups in Africa, specifically aimed at empowering six to eight projects annually. The fund will provide grants, venture investments, and accelerators to African blockchain startups. The main goal of this initiative is to nurture developers and assist them in building projects on StarkWare’s Ethereum layer-two scaling protocol, Starknet.

Heading the fund is Kheireddine Kamal, who was born in Morocco and seeks to invest in early-stage projects. During Starknet’s community call on February 3rd, Kamal highlighted that the fund’s priority is two-founder teams with a blend of business and technical acumen. These teams should have projects that are beyond the ideation phase. Eligible startups must have teams ranging from one to five members and a commitment to exclusively develop real-world products on Starknet. The fund’s focus is on startups in Francophone West and Central Africa, East Africa, Nigeria, and Ghana.

With an intention to target teams at the pre-seed and seed stages, StarkWare emphasized its aim to concentrate on projects looking to deploy their solutions massively scaling Ethereum on Starknet, a zero-knowledge (ZK) rollup. The funding program includes grants of up to $150,000 for new startups to validate their concepts through tranches based on KPIs. For startups that are more advanced in their journey, they may receive up to $500,000 in investments and equity funding. Additionally, selected projects will benefit from mentorship, gaining insights from experienced founders, and access to expertise in areas such as HR and marketing through Starknet. An accelerator program lasting 12 months is also part of the funding initiative, focusing on aiding startups to evolve into self-sustaining entities.

African blockchain startups have encountered challenges in securing significant funding opportunities over the years. Global venture funds allocated to African blockchain companies were minimal, with just 6.4% received in 2023 and only 1.8% in the first half of 2024. The restricted funding opportunities in African blockchain firms result from factors like regulatory complexities, market fragmentation, and a customer base with limited income and spending capacity. Despite these challenges, there have been instances where blockchain organizations have continued to invest in African startups. Last year alone, blockchain projects in Africa were fortunate to receive grants from the Ethereum Foundation through its Ethereum support program, which supported ten projects. Typically, blockchain firms extend grants and investments to projects built on their blockchains in a bid to encourage adoption.