Mr Eazi, Black Coffee and Ajebutter22: The African Music Artists Supporting Startups – TechCrunch | Candle Made Easy

This April, black Coffee, the famous South African DJ and record producer, whose real name is Nkosinathi Maphumulo, made history at the Grammys. With his seventh studio album “Subconsciously” he became the first African act to win an award in the category Best Dance/Electronic Album.

His victory came as the world’s appetite for amapiano, a style of house music that originated in South Africa, and afrobeats, a popular genre of music that originated in West Africa, had grown exponentially. It was a much-needed hit for the African music scene, and while it didn’t look like it, it was a boost to their tech scene.

There has been an intersection between technology and the arts in recent years, prompting growing interest from film, music and sports stars in investing in tech startups. Some of them — including Grammy-winning artists like Jay-Z, The Chainsmokers, Nas, and others like Snoop Dogg — have set up various funds to invest in startups in the US, Europe, and around the world.

So e.g Black coffeewho backed Andela, a tech talent incubator and a unicorn founded in Lagos in 2015, his win meant Africa’s tech scene could for the first time boast of having a native Grammy Award-winning artist as an investor in theirs to have startups.

What drives African music artists to invest in technology?

Before Jay-Z (Shawn Carter) co-founded Marcy Ventures in 2018, he had interests in other companies such as veteran 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 antagonisms between the tech and entertainment worlds.

One African artist who hasn’t hidden his love for Jay-Z’s entrepreneurial moves and seems to be taking over the billionaire’s playbook is Mr. Eazi (real name Oluwatosin Ajibade).

“The main reason I got into music was reading a book about Jay-Z called ‘Empire State of Mind,'” Mr. Eazi told TechCrunch on a call. “I was passionate about music and realized early on that the music business would give me access to where I wanted to go. It’s like a way for me to have all the freedom I wanted and still achieve the goal of financial independence through multiple investments.”

Last August, the popular Afrobeats singer-songwriter made headlines in Africa’s tech circles after his investment in pawaPay, a UK-based and Africa-focused mobile payments company through Zagadat Capital. But unlike Jay-Z, Mr. Eazi had a technical background before captivating audiences with hits like “Skin Tight”, “Hollup” and “Leg Over” and producing three mixtapes and two EPs during his long music career.

In 2014 Mr Eazi launched Phonetrader, an online marketplace for used phones backed by a now defunct startup incubator, 440NG, run by two investment firms, L5Lab and 88mph. While Mr. Eazi learned the basics of starting a business and scaling products during his time at Phonetrader, he also learned about the investment dynamics of Chika Nwobi, the founder of L5Lab and current CEO of Decagon, an engineering talent recruitment platform, after joining had attended several investor meetings.

Those lessons would prove helpful in 2019 when Mr. Eazi – after establishing his overseas presence and connections in the US, UK and Europe – founded EmPawa Africa, an outfit to accelerate young artists’ music careers. “When I started emPawa Africa, I wanted to experiment with the VC model by investing in many artists,” said the artist, who recently graduated from Harvard Business School.

Mr. Eazi (Founder of Empawa Africa and investor in PawaPay). Photo credit: Mr Eazi

The agency, which has spawned artists such as Nigerian artist Joeboy and Ghanaian artist Kwesi Arthur, has now spread its tentacles in marketing, distribution, publishing, management and financial services to independent artists and record labels. It also white-labels its platform for those interested in investing in African music; for example, the African Music Fund (AMF) $20 million project in 2020.

Aje butter22, a Nigerian-based musical artist and rapper whose real name is Akitoye Balogun, agrees with Mr. Eazi’s philosophy of investing in creatives. According to him, nurturing artists and people in the creative field should be done the startup/VC way. “Some of the investments I’ve made in music come from this mentality of seeing an artist or a project as a fast-growing vehicle,” Ajebutter22 said in an interview with TechCrunch.

Like Mr. Eazi, the songwriter, well known in the Lagos party scene for hit singles like “Tungba”, grew up with an interest in technology. In 2013, he flirted with an idea for a platform that could help people pay for songs on their phones. Though it never got off the ground due to a lack of funding, the process of getting the project off the ground and reading books like Zero to One and Hard Things About Hard Things opened the artist’s mind to the possibilities surrounding the Technology.

Ajebutter22 worked at Gamsole, a gaming startup, and Cisco before venturing into angel investing in 2020. “It was about owning something bigger than myself, which can be great one day. That was the reason for the decision to invest in technology,” said the artist, who has invested in AltSchool, a talent matching platform, and Nestcoin, an Africa-focused Web3 startup.

From the individual audit to the launch of funds

Personal relationships built over the years have been instrumental in how Ajebutter22 has made investments, a method ideal for a very early angel investor. For example, he is a longtime friend of Nestcoin CEO Yele Bademosi, and he knew Adewale Yusuf, co-founder and CEO of AltSchool, from his time at Gamsole. The AltSchool investment also saw the participation of another music artist and collaborator, Falz (real name Folarin Falana).

“I think the most important thing when you want to invest is to know the team you are supporting because everything can change at any time. Market size is also extremely important, of course, but for me it’s who you support that matters,” he said.

If Ajebutter22 plans to change its strategy as it makes more angel investments, setting up a formal structure like Zagadat Capital – which Mr. Eazi describes as a collective – is essential.

As a collective, Zagadat Capital is made up of “like-minded people who are young and African and find investing in African technology companies exciting,” said Mr. Eazi. Family offices are also part of this collective, alongside founders such as Shola Akinlade, co-founder and CEO of Stripe-owned Paystack, and Iyinoluwa Aboyeji, co-founder of Talent City.

One of the continent’s boldest ventures, Talent City, the urban development startup planning to establish charter cities across Africa, is a portfolio company of Zagadat Capital. Others aren’t as complicated: Eden Life, a concierge startup, and betPawa, an online betting company. This deal coverage showcases the diversity in Mr. Eazi’s choices; The artist also points out that his collective offers a unique advantage for portfolio companies, as its members, which consist of some celebrities, can serve as both shareholders and influencers at the same time.

“It’s not just about money or getting meetings. We can also help the team scale when we promote. For example, I would promote betPawa. I get paid, but I’m an investor and a shareholder,” he said. “Ultimately, we tend to invest in companies where the flywheel can be improved. It’s an ecosystem that feeds itself and grows to a point where it’s sustainable.”

Outside Africa, Mr Eazi has trimmed controls on Mexican fintech Paisa and Ireland-based fraud prevention provider Apata. Besides EmPawa Africa, he also has other entertainment investments: YC events company Shoobs and US-based music startup Vydia. These two investments underscore the artists’ game of broadening Africans’ interest in global entertainment areas, especially as the continent’s music rises in popularity. “The reason I’m investing in music technology is to ensure we have African justice in the structures that are an integral part of the ecosystem, because that’s where the real power and value lies,” noted Mr Eazi.

Overall, it’s a sizeable portfolio for an artist-investor with only a year of active investing history under his belt. As time goes on, Mr. Eazi admits that he will do whatever it takes to raise a fund and invest bigger checks, just like his mentor Jay-Z did in 2018. “For the moment we will stay with one collective. But when it’s time to grow, I don’t need anyone to tell me. It will be a gradual process.”

According to PitchBook, Black Coffee conducts his deals through Flightmode Digital, a venture capital firm he founded in 2017. The company – which says it wants to invest in early-stage companies involved in video content creation and production, as well as software development – has backed several startups, including Yoco, a South African payments startup that raised over US$100 million raised dollars in VC funding; SweepSouth, a cleaning and housekeeping startup; and Rensource, a renewable energy company.

It’s unclear if Black Coffee has raised a set amount of capital for investments through Flightmode Digital, given its online presence that makes it appear more like an investment holding company than a traditional VC firm. However, the efforts of Ajebutter22, Black Coffee, Mr. Eazi, Falz and a few under the radar suggest it’s only a matter of time before local artists, regardless of their technical background, find VC firms and funds like theirs establishing global counterparts The continent’s tech scene – which received $3 billion in venture capital funding in the first half of this year – continues to explode and there are more exits.

“It seems that artists are not interested in startup investments because some still have their immediate needs to attend to; Some people may not understand some of the problems to be solved,” said Ajebutter22. “But I also think that as time goes on there will be more and more artists working in this space. I think African artists are always evolving and becoming better known, and if one or two success stories happen, that will inspire them to give it their all.”

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