Cascador, a Lagos-based accelerator program designed to propel mid-stage Nigerian entrepreneurs towards global competitiveness, has injected over $3 million in debt funding into nine promising local startups. This financial boost, awarded at Cascador’s inaugural Pitch Day event in Lagos, aims to bolster the operations and expansion strategies of these emerging businesses. The recipients, representing a diverse range of sectors including agriculture, manufacturing, and technology, were selected from the pool of companies that have graduated from the Cascador program since its inception in 2019. This cohort represents the culmination of Cascador’s rigorous training and mentorship program, which has nurtured approximately 60 companies to date. The funding disbursement underscores Cascador’s commitment to fostering a thriving entrepreneurial ecosystem within Nigeria.
Unlike traditional venture capital models that prioritize equity investments, Cascador adopts a tailored approach, recognizing that different businesses have unique financial needs. This nuanced strategy acknowledges that for many businesses, particularly those in sectors like manufacturing and agriculture, working capital is more critical than equity at their current stage of development. A significant majority of the applicants, approximately 74%, opted for debt financing, emphasizing the preference for this funding mechanism among the participating companies. To facilitate this debt financing, Cascador has forged a strategic partnership with Sterling Bank. This collaboration aims to provide favorable loan terms to the selected startups, mitigating some of the traditional barriers to accessing capital.
The partnership with Sterling Bank signifies a crucial element of Cascador’s strategy, enabling the accelerator to offer loans with more attractive interest rates and flexible repayment options. By absorbing collateral requirements and negotiating lower interest rates, Cascador and Sterling Bank are striving to create a more accessible funding landscape for these high-potential businesses. The loan terms, which include interest rates around 20%, moratorium periods, and repayment tenures extending up to five years, are designed to align with the growth trajectories of the recipient companies, allowing them to manage their financial obligations while focusing on expansion. This approach underscores Cascador’s commitment to providing not only financial support but also a supportive ecosystem that fosters sustainable growth.
Beyond simply providing financial resources, Cascador emphasizes the importance of holistic development, offering mentorship and capacity-building programs alongside the funding. This multifaceted approach aims to equip the entrepreneurs with the necessary skills and knowledge to effectively utilize the capital they receive. By providing both financial and intellectual resources, Cascador aims to maximize the impact of its investment, fostering sustainable growth and long-term success for the participating companies. This commitment to mentorship and capacity building reflects Cascador’s belief that entrepreneurial success is not solely determined by access to capital but also by the ability to strategically deploy those resources.
The Pitch Day event also served as a platform to connect the promising startups with potential investors. This increased visibility and access to a wider investor network can further propel the growth of these businesses, opening doors to additional funding opportunities and strategic partnerships. By facilitating these connections, Cascador is playing a vital role in bridging the gap between innovative entrepreneurs and the capital they need to scale their ventures. This access to a broader investor network not only provides potential for future funding but also fosters valuable relationships and mentorship opportunities that can contribute to the long-term success of these businesses.
The $2 million Catalytic Fund, a joint initiative by Cascador and Sterling Bank, further solidifies their commitment to supporting the growth of promising Nigerian businesses. This fund represents a dedicated pool of resources specifically earmarked for unlocking the growth potential of ventures across key sectors. By combining financial resources with strategic guidance and mentorship, Cascador and Sterling Bank are creating a powerful ecosystem that fosters innovation, drives economic growth, and empowers a new generation of Nigerian entrepreneurs. This collaborative approach demonstrates the potential for partnerships between accelerators and financial institutions to create a more dynamic and supportive environment for emerging businesses.
