Pariti, the Kenya-based community-led marketplace building the digital infrastructure for startup ecosystems in emerging markets, has raised $2.85 million seed, the company confirmed to TechCrunch today.
The round was led by U.S.-based Harlem Capital. In Africa, it's the first deal of the diversity-focused fund that secured $134 million for its second fund earlier this year. Other investors -- Better Ventures, Accelerated Ventures, Diverse Angels, AVG Basecamp and New General Market Partners participated.
"We're thrilled to be working with Harlem Capital," co-founder and CEO Yacob Berhane said of Harlem's participation. "Their focus on data, process and supporting underserved ecosystems aligns perfectly with our mission and makes them an amazing partner for us to build with."
When TechCrunch covered Pariti in March, the company which connects founders in emerging markets to resources, talent and capital, was fresh out of finding product-market-fit.
Pariti was founded by Yacob Berhane and Wossen Ayele in 2019. This past year, CEO Berhane said the company has grown 795% and attributed this growth to the pandemic and how the African tech ecosystem has hit an inflection point, minting half a dozen unicorns within this period.
"The pandemic was a Black Swan event because we saw a major jump in activity on our platform. Remote staffing and remote investing accelerated tremendously. This was a bet we made a while back but obviously could not anticipate what was coming," Berhane said to TechCrunch.
"And after taking nearly ten years to get Africa's first unicorn, we had six announced in roughly six months. This led to a significant increase of interest from local and international investors for African startups.
Pariti has over 880 companies across 42 countries on its platform, up from 500 early this year. But Berhane does not share any other numbers to reflect the progress from the 100 freelance experts and 60 investors TechCrunch reported in March.
Data from BCG says that Africa appears to be at the dawn of a startup revolution, with the ecosystem "growing at a 46% annual rate, which is six times faster than the global average."
But with some founders needing support more than ever after in an inefficient ecosystem with trust issues, platforms like Pariti will become critical for founders and investors to negotiate on neutral terrain.
Pariti's principal product is the Recommendation Engine, where founders submit their companies for review and feedback from experts on the platform. Then the engine suggests personalized next steps for the founders to take in areas where the company needs help.
The Kenya-based marketplace also helps talent monetize their skills and VCs and angels to find, vet and execute deals.
Berhane mentions that Pariti's pitch assessment and recommendation engine also has some predictability features where the platform can tell how companies will perform with fundraising.
"So we've looked at the companies that have been able to go on and raise money after submitting the Pariti pitch review, and companies that score over 70 on a Pariti score have a 50% likelihood of connecting successfully with investors," the CEO said. "But companies that score above 78 have shown correlation to having 8x likelihood of raising capital, which is pretty dramatic."
According to a few founders who have used the platform and spoke anonymously to TechCrunch, Pariti also helped them get into global accelerators such as Y Combinator and Techstars.
Berhane confirmed that five companies have gotten into Y Combinator after using Pariti. One of the startups is Kenyan neobank Fingo, a startup highlighted in the previous article that had secured a $250,000 pre-seed round in March.
"If Pariti builds this community of founders, investors and freelancers that have the right mindset to elevate this ecosystem, nobody has to be a gatekeeper. You're fostering a certain mentality of 'we will get further together.' It's bigger than any one of us," Berhane stated, emphasizing the need for Pariti to democratize access to global investors and accelerators.
Coaching and mentorship services have picked up significantly on the platform, too, appearing in different forms: VC fellows to founder, founder to founder, expert to founder, and investor to founder, the company said. With access to this support and investors, companies have raised over $20 million in debt and equity this past year.
Pariti seed funding will allow it to build SaaS workflows to aggregate multiple forms of raising capital, from traditional equity and debt to DeFi solutions.
The company also plans to enhance its talent marketplace, create a bespoke solution for investors looking to invest and support founders, hire talent, build bigger communities and expand into new markets.