his April, Black Coffee, the famed South African DJ and record producer whose real name is Nkosinathi Maphumulo, made history at the Grammys. With his seventh studio album \u201cSubconsciously,\u201d he became the first African act to win an award in the Best Dance\/Electronic Album category.<\/p>\n
His win came when the global appetite for Amapiano, a style of house music that emerged in South Africa, and Afrobeats, a popular music genre that originated from Western Africa, had increased exponentially. It was a much-needed success for the African music scene, and though it didn\u2019t appear so, it was a boost for its tech scene.<\/p>\n
Over the past couple of years, there\u2019s been an overlap between tech and art, fueling a growing interest of movie, music and sports stars investing in tech startups. Some of them \u2014 including Grammy Award-winning artists such as Jay-Z, The Chainsmokers, Nas and others like Snoop Dogg \u2014 have launched various funds to invest in startups in the U.S., Europe and globally.<\/p>\n
Thus, for Black Coffee, who backed Andela, a tech talent incubator and unicorn launched from Lagos in 2015, his win meant Africa\u2019s tech scene could, for the first time, brag about having a homegrown Grammy Award-winning artist as an investor in its startups.<\/p>\n
What\u2019s pulling African music artists to tech investment?
\nBefore Jay-Z (Shawn Carter) co-founded Marcy Ventures in 2018, he was involved with other businesses such as the legacy entertainment company Roc Nation and champagne brand Armand de Brignac. His music career gave him the resources and access to diversify his financial interests, including in startups, despite the lifestyle contrasts between the tech and entertainment worlds.<\/p>\n
One African artist that hasn\u2019t hidden his love for Jay-Z\u2019s entrepreneurial moves, and seems to be adopting the billionaire\u2019s playbook, is Mr. Eazi (real name Oluwatosin Ajibade).<\/p>\n
\u201cThe main driver for me to go into music was reading a book called \u2018Empire State of Mind\u2019 about Jay-Z,\u201d Mr. Eazi told TechCrunch on a call. \u201cI had a passion for music and realized early that the music business would give me access to where I wanted to be. It\u2019s like a way for me to have all the freedom I wanted and still get to the destination of financial independence by making several investments.\u201d<\/p>\n
Last August, the popular Afrobeats singer and songwriter made headlines in Africa\u2019s tech circles following his investment in pawaPay, a U.K.-based and Africa-focused mobile payments company through Zagadat Capital. But unlike Jay-Z, Mr Eazi had a tech background before captivating audiences with hit songs like \u201cSkin Tight,\u201d \u201cHollup,\u201d and \u201cLeg Over\u201d and producing three mixtapes and two EPs during his long music career.<\/p>\n
In 2014, Mr. Eazi launched Phonetrader, an online used phone marketplace backed by a now-defunct startup incubator, 440NG, which was run by two investment firms, L5Lab and 88mph. While Mr Eazi learned the ropes of starting a company and scaling products during his time at Phonetrader, he also got to understand investment dynamics from Chika Nwobi, the founder of L5Lab and current chief executive of Decagon, an engineering talent recruitment platform, after attending several investor meetings.<\/p>\n
These lessons would prove helpful in 2019 as Mr. Eazi \u2014 after building his presence overseas and connections in the U.S., the U.K. and Europe \u2014 launched EmPawa Africa, an outfit to accelerate the music careers of young artists. \u201cWhen I started emPawa Africa, I wanted to experiment with the VC model by investing in many artists,\u201d said the artist who recently completed a program at Harvard Business School.<\/p>\n
The agency \u2014 which has spun out the likes of Nigerian artiste Joeboy and Ghanaian artiste Kwesi Arthur \u2014 now has its tentacles spread in marketing, distribution, publishing, management and finance services for independent artists and record labels. It also white-labels its platform for interested parties that want to invest in African music; for instance, the $20 million African Music Fund (AMF) project in 2020.<\/p>\n
Ajebutter22, a Nigerian-based music artist and rapper whose real name is Akitoye Balogun, agrees with Mr Eazi\u2019s philosophy of investing in creatives. According to him, powering artists and people in the creative space should be done in a startup\/VC manner. \u201cSome of the investments I\u2019ve made in the music space have been through that mentality of seeing an artist or project as a fast-growing vehicle,\u201d said Ajebutter22 in an interview with TechCrunch.<\/p>\n
Like Mr Eazi, the songwriter, well known within the Lagos party scene with hit singles like \u201cTungba,\u201d grew up interested in tech. In 2013, he flirted with an idea for a platform that could help people pay for songs on their phones. Though it never took off due to lack of funding, the process of getting the project off the ground and reading books like \u201cZero to One\u201d and \u201cHard Things About Hard Things\u201d opened the artiste\u2019s mind to the possibilities around tech.<\/p>\n
Ajebutter22 would work at Gamsole, a gaming startup, and Cisco before venturing into angel investments in 2020. \u201cIt was about owning something bigger than myself, which can be great someday. That was behind deciding to invest in tech,\u201d said the artist who has invested in AltSchool, a talent-matching platform, and Nestcoin, an Africa-focused web3 startup.<\/p>\n
From individual checks to launching funds
\nPersonal relationships built over the years have been vital to how Ajebutter22 has made investments, a method ideal for a very early angel investor. For instance, he is a longtime friend of Nestcoin chief executive Yele Bademosi, and he knew Adewale Yusuf, the co-founder and CEO of AltSchool, from his time at Gamsole. The AltSchool investment also recorded participation from another music artist and collaborator, Falz (real name Folarin Falana).<\/p>\n
\u201cI think the most important thing when you want to invest is to know the team you\u2019re backing because anything can change at any time. The market size, of course, is extremely important too, but for me, who you\u2019re backing is key,\u201d he said.<\/p>\n
If Ajebutter22 plans to change his strategy as he makes more angel investments, setting up a formal structure like Zagadat Capital \u2014 which Mr Eazi references as a collective \u2014 will be essential.<\/p>\n
As a collective, Zagadat Capital comprises \u201clike-minded people who are young, African and see investing in African tech companies as exciting,\u201d said Mr Eazi. Family offices are part of this collective in addition to founders like Shola Akinlade, the co-founder and CEO of Stripe-owned Paystack, and Iyinoluwa Aboyeji, co-founder of Talent City.<\/p>\n
Talent City, the urban development startup that plans to create charter cities across Africa, is one of the most audacious projects on the continent and is a portfolio company of Zagadat Capital. Others are not as complicated: Eden Life, a concierge startup, and betPawa, an online betting company. This deal coverage shows variety in Mr Eazi\u2019s picks; the artist also points out that his collective provides a unique advantage for portfolio companies in that its members, consisting of a few celebrities, can double as shareholders and influencers.<\/p>\n
\u201cIt\u2019s not just money or to get some meetings. We can also help the team to scale when we advertise. You\u2019d see me advertising betPawa, for instance. I\u2019m getting paid, but I\u2019m an investor and a shareholder,\u201d he said. \u201cAt the end of the day, we have more leaning toward investing in companies where the flywheel can be enhanced. It\u2019s an ecosystem that keeps feeding itself and growing to the point where it\u2019s sustainable.\u201d<\/p>\n
Outside Africa, Mr Eazi has cut checks in Mexican fintech Paisa and Irish-based fraud prevention provider Apata. He also has other entertainment investments aside from EmPawa Africa: YC events company Shoobs and U.S.-based music startup Vydia. These two investments emphasize the artists\u2019 play to expand the interest of Africans in global entertainment spheres, particularly as music from the continent gets popularized. \u201cThe reason I\u2019m investing in music tech is to make sure we have African equity in the structures that are integral to the ecosystem because that\u2019s where the real power and value lies,\u201d remarked Mr. Eazi.<\/p>\n
Overall, it\u2019s a sizable portfolio for an artiste-cum-investor with only one year of active investment history under his belt. With time, Mr Eazi acknowledges that he\u2019ll go all out to raise a fund and invest more extensive checks, just like his mentor, Jay-Z, did in 2018. \u201cFor now, we\u2019re going to still stay at a collective. But when it\u2019s time to grow, I\u2019ll need nobody to tell me. It\u2019s going to be a gradual process.\u201d<\/p>\n
Black Coffee handles his deals through Flightmode Digital, a venture capital firm he set up in 2017, according to PitchBook. The firm \u2014 which says it seeks to invest in early-stage businesses operating in video content creation and production and software development \u2014 has backed several startups, including Yoco, a South African payments startup that has raised over $100 million in VC funding; SweepSouth, a cleaning and home service startup; and Rensource, a renewable energy company.<\/p>\n
It\u2019s unclear whether Black Coffee raised a set capital to invest through Flightmode Digital because, judging by its online presence, it appears more like an investment holding company than a traditional VC firm. However, the effort displayed by Ajebutter22, Black Coffee, Mr Eazi, Falz and a few under the radar suggests that it\u2019s only a matter of time before local artists, regardless of their technical backgrounds, launch VC firms and funds like their global counterparts as the continent\u2019s tech scene \u2014 which has received $3 billion worth of venture capital funding in the first half of this year \u2014 continues to explode and more exits happen.<\/p>\n
\u201cWhy it seems artists aren\u2019t interested in startup investing is because some still need to take care of their immediate needs; some people might not understand some of the problems being solved,\u201d Ajebutter22 said. \u201cBut I also think that more and more artists will be in that space over time. I think African artists are becoming more evolved and exposed, and if one or two success stories happen, it will inspire them to go all in.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
African music artists are using personal funds and collectives to invest in startups. Soon, they might launch funds<\/p>\n","protected":false},"author":12963,"featured_media":12159,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,31],"tags":[7,14,32],"class_list":{"0":"post-12162","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entertainment","8":"category-music","9":"tag-apie-project","10":"tag-entertainment","11":"tag-music"},"yoast_head":"\n