Company Name: 1KFund
Sector: Financial Services, including real estate
Location: New York (USA) & Lagos (Nigeria)
Can you introduce your investment platform?1KFund is an easy to use and a frictionless investment platform that serves as a 21st century bridge connecting individuals/institutions to previously inaccessible project opportunities going in various countries across Africa. Additionally, 1KFund helps project sponsors looking to raise capital for African projects, by providing access to high net worth individuals & institutions who are looking to deploy capital for projects that interest them.
We believe 1KFund is necessary because there has been a void between capital and projects, particularly in Africa and with the right technology this gap can actually be bridged and that’s where 1KFund comes in.
How did you come up with the idea to start an online investment platform? Was there an “ah-ha” moment?
The idea initially started when we found out that real estate loans issued out by local banks in many countries across sub-Sahara Africa had interest rates of over 25%+ per annum. This is very interesting because, especially for secured loans such as real estate, one would expect the interest rates to be much lower, so we said why not democratize the process and let investors have access to such “juicy” rates increasing liquidity in the market and eventually bringing down the interest rates. This was how we conceived the debt crowdfunding part of the company but in looking for a provider to build the platform, we came across Katipult which also supported equity investments (something we were going to expand into eventually), so we choose Katipult as their solved all of our technological needs.
What’s different about your platform than others in the space?
Users sign up on the platform, after a verification process, they then have access to all public projects on our platform.
Our target audience is actually two folds: People in the diaspora with a keen interest to invest in Africa and people in Africa who want to invest in African projects.
We serve both individuals and institutional investors, so we usually have a project for everyone. Just by the nature of projects in Africa, we see really small investment which might be interesting to a small individual investor and we also see multi-million dollar projects which might be interesting to high net worth individuals and institutions, so we try to make sure we cater to the whole spectrum.
At this time, our platform caters to Equity/Debt investment for high net worth individuals & institutions. We have a donation/reward offering that is currently available for everyone and we hope to roll out the Equity/Debt investment part of the platform to everyone very soon.
Do you have any milestones you would like to share with us? Or any other interesting news about your platform?
We have seen a huge interest in the platform both from people looking for capital and institutions looking to deploy capital. Our initial goal was getting our name out there and we have conducted various marketing efforts which has put our name in front of over 100,000 individuals around the world including show casing our platform at the 2016 Harvard African Business Conference hosted earlier this year in Boston, which gave us great traction and connected us to a lot of agencies that support growing African investment platforms like ours.
We are also working with multiple US agencies that support investment in Africa to partly guarantee certain investments which brings a lot of comfort to foreign investors. Once this takes off, we expect to see even more institutional capital flow through our platform as well as project sponsors of mega projects.
We worked with a US based hedge fund to close a $5M quasi debt syndicate deal in South Africa.
Additionally, though still in the very early stage, we are working with another US based hedge fund (which is looking to implement an alternate lending strategy in Africa). The fund is looking to invest $100M over the next two years to various alternate lenders across sub-Sahara Africa, and we would be sourcing the deals for the fund via our platform.
We are assisting a US capital allocator in facilitating a $25M debt deal a bank in West Africa (the deal will yield the investor double digit interest rates over a 3 year tenor).
On the donation/reward space – we just hosted two new campaigns: one raising funds to help individuals who have been displaced due to unrest or political instability in their original place of residence, by giving them temporary shelter till they can return back to their homes. The other campaign is raising funds to help plant 1000 trees in commemoration with Lagos state Tree Planting Day.
How do you see the industry evolving within the next 24 months?
We believe you will see a huge capital inflow from developed economies into Africa either via crowdfunding or syndication deals, because when you have ultra-low interest rates in developed economies and double digit interest rates in many countries in Africa, the laws of economics tells us funds will move to where capital is most efficiently used or in this case, where capital will yield the higher returns.
Tell us a little about the founders?
1KFund was founded by a group of friends with the collective idea of changing the way investments in Africa are made, particularly bridging the gap between project sponsors in Africa looking to raise capital for projects and High net worth individuals and institutions looking to deploy capital to such project.
1KFund is led by founding member Airende Ojeomogha – who has worked in various investment and management consultancy roles in the area of investments and financial risk management. Using data-driven insights about the financial market, he has advised, built and implemented complex financial models for some of the largest hedge funds and investment banks in the world. His previous roles also cover investment banking activities such as loan syndication, due diligence, capital raising, underwriting and originations. He holds an MSc. in Financial Engineering from University of California Berkeley, Haas School of Business and an MSc. in Finance from Grenoble École de Management.
1KFund’s board include individuals who have over 20 years of experience in the financial services, real estate and management consulting, including a former presidential candidate of Nigeria.