NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, December 2, 2015

Small and medium-sized enterprises (SME’s) are the primary job creation engine in Africa, accounting for over 95% of firms and 60%-70% of employment. Yet, SME’s on the continent report access to finance as the biggest obstacle to growth. Malaik, an impact-focused equity crowdfunding portal, test launched today, to connect investors interested in impact investment opportunities and entrepreneurs raising equity finance. Malaik offers the global community clear and well-documented opportunities for high impact investing in African businesses, a chance to participate in Africa’s growth story.

“Young companies all over Africa face a scarcity of funds to fuel their growth,” said Neku Atawodi, Founder of Malaik. “Apart from banks and occasional angel investors, there is often nowhere to turn. Malaik is turning this crisis into an opportunity for startups and investors alike by offering stakes in young African companies to the crowd. Our unique impact tracker means that investors can track their investments impact on the platform.”

Malaik is targetted at sophisticated investors, who understand the risks of investing in start ups. The platform uses a unique system of first identifying a lead investor before putting a company on the platform. The lead investor sets the terms and valuations of the deal, and personally invests a minimum of 25% of the companies’ asking round. The lead investor negotiates a fair valuation and is required to conduct their own due diligence before putting their money in. A lead investor may be an individual investing alone, or a representative for an investing group or institution. The crowd receives the same class of share, and the same price per share, as the lead investor, except indicated otherwise. Companies listed on Malaik decide how much money they want to raise in exchange for a certain percentage of equity, and each investor’s equity interest is proportionate to the size of their investment.

Malaik will focus on high-impact companies that provide jobs and solve social and infrastructural issues in African nations while maintaining profitability. The global portal will fund seed stage businesses requiring funding between $200,000 to $2,000,000. Malaik has identified local partners in key regions around Africa that will source for high impact start ups locally, entrepreneurs can also apply to be listed on www.malaik.com.