Investor Profile: DFS Lab — Thesis, Cheque Size & How to Apply

DFS Lab, the Digital Financial Services Lab, is an early stage investor backing the future of digital commerce in Africa. Founded in 2017, it is often the first external cheque into a company.

Thesis

DFS Lab invests in digital commerce companies serving African markets. Its thesis is that commerce on the continent will be rebuilt around mobile money, logistics, embedded finance and platforms serving small businesses and consumers who were previously hard to reach. It prefers teams that already have a product in the hands of real users, and it brings global and local mentorship to its work.

Sectors and stages

DFS Lab focuses on pre-seed African startups, often before a formal pre-seed round, and then helps its companies raise that round, sometimes topping up the most promising teams. Its portfolio is mostly fintech, ecommerce and logistics. It invests across Africa, with Kenya a historically strong base alongside Nigeria, Ghana and South Africa.

Fund size and cheque size

DFS Lab runs an accelerator style model with a published starting ticket. Participants in its programme have received an initial $25,000 in pre-seed funding, with funding of up to $50,000 described for the accelerator and additional investment possible later. Its newer DFS Lab Stellar Africa Fund I, backed by the Stellar Development Foundation, planned initial investments of up to $100,000 for pre-seed and seed teams building on or integrating Stellar. An overall fund size for DFS Lab is not publicly disclosed, so these ticket figures should not be read as a total fund size.

Notable portfolio

DFS Lab backed 19 African tech startups in 2021 alone, taking its total portfolio then to 22 companies. Early portfolio names include Pula, the agricultural insurance intermediary, Pezesha, the Kenyan peer to business microlending marketplace, Inclusive from Ghana, Koa, Tanda and GoBeba. Its portfolio companies have gone on to raise from firms including Tiger Global, QED, 500 Global and Y Combinator.

Partners and team

DFS Lab was originally funded by the Bill and Melinda Gates Foundation, with a $4.8 million three year grant reported for its early work. Its director in that period was Dr. Jake Kendall. More recently, partner Stephen Deng has spoken for the Stellar Africa Fund I, supported by an investment from the Stellar Development Foundation. The firm also works with a network of venture scouts who refer promising startups.

Programs, credits and perks

The flagship DFS Lab Accelerator is a fully remote programme for pre-seed African startups with at least a minimum viable product and considerable user feedback. Support includes a tailored growth plan, office hours, mentor matching and cohort meetings, culminating in a virtual demo day with the firm's investor network. No standard cloud credits package is publicly listed.

How to apply for funding from DFS Lab

DFS Lab runs an open application process on a rolling basis, and also accepts referrals from its venture scouts. Founders should apply only through the official route linked from dfslab.net, since application details change between cohorts. A strong application shows a working minimum viable product and real user feedback.