The Southeast Development Commission took an image hit right after the end of its Southeast Venture Capital Program (SEVCP), where 25 startups received structured capital.
The bone of contention was that some of the startups that won seed funding were based in Lagos and not the Southeast, the target region for the venture capital program. Critics argue that this defeats the aim of the VC program.
The SEVCP, according to the SEDC CEO Mark Okoye, was initiated to inject funds into the southeast tech ecosystem, which has plentiful talent but lacks access to capital and mentorship. Lagos-based startups popping up among the winners seemed like a diversion from that vision and a bad case of favouritism by the competition organisers.
How the SEDC Picked the Winners
Reacting during an X space organised by Techpoint Africa, the SEDC, via a representative, shed light on the Commission’s process and how it arrived at the 25 startups that won the competition.
The SEDC rep revealed that applications were divided into two groups according to their relevance. The rep stated that Successful startups who scaled the first phase in the competition were those that were scalable and aligned with the commission’s objectives.
The next phase of screening for the remaining 209 startups focused on the quality of ideas and problems being solved. The SEDC also focused on the founders of the startups and their individual capacities. This phase involved video pitches and pitch desks as part of a thorough assessment of the startups.
The applicant pool was reduced to 100 after this phase. In this phase, the remaining startups aligned with the SEDC’s vision. They were super relevant and backed by capable founders. The next stages, which pruned the 100 startups down to the winners, were all about scale and the potential of the team behind a project.
This vetting process in this phase was done by a team of experts and professionals invited by the SEDC. The goal is to get the final 50 startups that will compete for the seed funding on the final day of the competition.
The SEDC rep explained that a structure was also put in place for all participants. This is to keep startups that came close to winning the seed fund in the loop. This would better position them to vie for and win seed funding from other venture capital funds.
According to the rep, the N70 billion injected into the Southeast tech ecosystem is insufficient. It is insufficient to spark the entrepreneurial rigour the SEDC envisions for the region. He stated that the commission is still actively seeking additional funds to continue funding and mentoring startups in the Southeast.
Moving Forward
Despite the SEDC’s transparent process in selecting the competition winners. Critics believe the winners should all be Southeast-based startups. This would have aligned with the motive for which the SEDC was launched in the first place.
The TechPoint X space was a perfect avenue to address this issue. However, the SEDC didn’t fully address the questions raised by critics. The SEDC is the youngest Development Commission in the country. It is arguably the most active, given the number of events and strategic sessions. The SEVCP was a major VC fund competition for the region and the commission’s first material impact.
The SEDC was launched by the Bola Ahmed Tinubu Administration. The goal is to bring the Southeast up to par with other regions in the country. This is especially true after a civil war crippled the region in 1966. The tragic war set it many years back and destroyed generations’ worth of capital owned by its inhabitants.
