Nigerian-based tech startup, Decagon, has closed a $1.5 million seed equity round from early-stage venture capitalists (VCs). Investors include include Kepple Africa Ventures, Timon Capital, angel investors, as well as a $25 million student loan financing facility from Sterling Bank
Decagon combines lending, training, and job placement to help exceptional people launch careers as software engineers. Being the first to create merit-based student loans in partnership with Sterling Bank and the Central Bank of Nigeria, they are enabled to offer a Pay-After-Learning (PAL) plan which provides trainees with laptops, accommodation, internet, meal allowance, and a sustenance stipend without any upfront payment.
The early capital-efficient strategy to growth and customer acquisition has established and distinguished the company among its competitors.
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“We were already profitable and growing 500 percent per annum but we see this capital as fuel to accelerate our mission to transform exceptional people, often from under-represented backgrounds, into world-class engineers by connecting them with financing, in-demand skills, and their dream jobs,” said Chika Nwobi, the founder of Decagon.
Since he founded Decagon in 2018, Nwobi has invested in several tech companies focused on the African continent including his debut company MTech which is now listed on a stock exchange on the continent. He has so far funded over 20 other startups including Jobberman, Cheki, and Oya.
The funds will assist to achieve the company’s pursuit of gender balance by increasing female participation from 25percent currently to 50percent by 2024. Decagon is passionate about creating opportunities for women and is helping achieve a gender-balanced workforce among its partner organizations.
Decagon’s objective is to address the under-representation of black people in tech globally starting in Nigeria – the most populous black nation, where youth unemployment is about 50 percent. Nwobi notes that funding for local startups is growing massively but companies now face a shortfall of skilled tech talent. Microsoft, Facebook, and Google have all invested in building engineering offices in Nigeria but most other companies can’t afford to do that, so we help them access top talent to work as remote engineers.
“We’re thrilled to work with Decagon to build up the top 0.5percent of vetted engineering talent in Africa and help connect them to global tech opportunities. The frequency of engineering leaders from US and European companies in our network ask about sourcing African and Nigerian technical talent has increased at a rapid clip and we’re excited to lean into that and help Decagon on their mission,” Chris Muscarella, partner at Timon Capital said.
The merit-based student loan initiative has yielded results and gained popularity with over 80 thousand people applying from which 440 have been accepted so far. the company said it has
“Three things I am especially proud of are our 100 percent placement rate upon graduation, the 100 percent loan repayment rate by DecaDevs, and the 410 percent salary uplift we are seeing after Decagon ” Nwobi disclosed.
Obinna Ukachukwu, Divisional Head, Sterling Bank, speaking on the student loan financing said “We got involved to support alternative education by providing loans for Nigerian students complemented with financial literacy training. Based on the excellent performance of the current portfolio, it made sense to scale our support to Decagon.”
