Lagos-based EchoVC launches $8m ‘pilot’ blockchain-focused seed fund

Lagos-based VC firm EchoVC, a technology-focused early-stage VC firm focused on investing in underrepresented founders and underserved markets, has launched EchoVC Chain, a USD 8 million “pilot” focused blockchain fund.

EchoVCwhich says its mission is to be “Sequoia Capital for undervalued founders and markets”, has invested in nearly 40 companies across various markets worldwide, and made its first investment in the blockchain segment in 2021.

“Over the past few years at EchoVC, we have been fascinated by blockchains. The more we explored and learned, the more excited we became about the use of blockchain and its functions in Africa,” said the firm’s Eghosa Omoigui, Tsendai Chagwedera and Deji Sasegbon in a blog post.

“For African markets, we believe that blockchain functionality is more of a need, rather than a want, and our task is to leverage these capabilities to enable new leaps, or unlock new market opportunities, across the continent.”

The EchoVC chain is an $8 million pilot seed fund focused on making investments in entrepreneurs and startups that span EchoVC’s specific areas of interest. The company has been excited about two features of blockchain – the ability to abstract or tokenize, and the ability to scale autonomously.

“However, our perspective on the use of blockchain in Africa crosses several layers. Our first layer of focus is on basic fintech infrastructure. This includes infrastructure that leverages stablecoins to optimize payments, liquidity and treasury; and also explores the unbundling and delivery of crypto /fintech building blocks, or “primitives” – that other companies can use to scale faster,” EchoVC said.

“The second layer above this targets blockchain functionality. DeFi functionality can be leveraged in Africa for innovative financial products that improve access to credit and savings, or perhaps power new-age decentralized neo-banks. NFTs can serve to advance the creative economy of the rising Gen-Z, enable games to offer new ways to make money, or even fractionalize real-world assets and portfolios to reduce affordability barriers to investment.”

Third, EchoVC is excited about the prospect of DAOs, not only for their ability to scale autonomously, but also to organize human networks.

“Examples in Africa are social collectives and informal markets, which are central parts of Africa’s offline economic structure. DAOs can organize offline and informal networks in a way that is beneficial to all participants. This should free up labor liquidity and increase the earning potential of the bottom pyramid demographics. Other examples include decentralized agent networks, social networks, as well as gaming networks,” the company said.

“Looking beyond this, we continue to explore other new blockchain aspects ranging from digital identity, privacy, decentralized infrastructure edge nodes and agile supply chains to a possible future intersection of AI/ML and DAOs. On the regulatory side, we continue to observe the evolving landscape. Our view is that regulation is necessary and will have a positive impact in guiding innovation, improving stability and removing frictions that still exist between decentralized and centralized worlds.One aspect we are hugely excited about is the use of central bank digital currencies (CBDCs) which the digital version of cash – channeled through the banking system – to remove friction in access to financial products, streamline cross-border payments and enable programmable local money.”