The Development Bank of Jamaica (DBJ) has made an investment of US$4.9 million into a venture capital fund, Jamaica’s first in over 30 years, it says.

According to the DBJ, the VC Fund’s strategy and thesis will centre on tech and tech-enabled firms operating in four key pillar sectors: financial services; entertainment; agribusiness; and health.

The underlying sectors to the pillars include manufacturing; tourism; sports; retail; digital health; renewable energy; mobility; fintech; e-commerce; agritech; logistics; and business services.

The fund will employ technical assistance where necessary to enhance selected deals. The team consists of diverse professionals with strong track records in transactions in the Caribbean, Africa, and North America. Investments in firms will be in the form of equity and quasi-equity.

“The investment in a VC Fund at this time is not only opportune but a welcomed addition to Jamaica’s financial offerings to early-stage companies.The provision of alternative sources of financing for businesses outside of debt, is part of the DBJ’s focus on ensuring economic growth and development for all Jamaicans,” David Wan, acting managing director, DBJ stated in announcing the fund.

“This VC fund is trailblazing for DBJ in that it fills a gap in our portfolio for equity investment into early-stage companies. Previous funding activities include innovation grants, supply chain grants, loans, and private equity for SMEs. This new Fund will expand the DBJ’s suite of products, to underscore our mission to be a ‘Business Builder’ within our country,” he continued.  

Following the issue of a request for proposal last year, the DBJ went through a “rigorous” of selecting a fund manager and eventually selected Mscale LLC.

Located in Delaware, United States, Mscale focuses on venture and permanent capital advisory services. The firm is led by Ugo Ikemba as the chief executive officer, who brings over 20 years of experience in venture capital and private equity expertise with a focus on early-stage companies. 

Ikemba has been involved in the raising and deployment of four funds totalling over US$300 million for deals in sectors such as technology, tourism, and hospitality, fintech, banking, building materials, agribusiness, logistics, and manufacturing.

“The Mscale team is both humbled and honoured to have achieved its initial close with seed funding from the DBJ. We are focused and committed to intelligent investing through leveraging the team’s deep local insight and global VC expertise. The positive macroeconomic conditions of Jamaica and other Caribbean countries coupled with the VC financing gap present an unprecedented opportunity to help the top tier early-stage firms scale into global champions,” stated Ugo Ikemba

In addition to the DBJ, the other investors from the Caribbean and Africa include PanAfrican Capital Holdings; Jamaican investor and businessman Joseph M Matalon, and Spaceship Collective — a company owned by Afrobeats global star Burna Boy. Mscale has confirmed that the fund-raising process is ongoing.  

Within the DBJ, the fund will be under the Boosting Innovation Growth and Entrepreneurship Ecosystem (BIGEE) portfolio.

Programme manager for BIGEE Christopher Brown explained that, “The fund has achieved its first close at US$15M with seed funding of US$4.9M from the DBJ. The total capital is projected to grow to US$50 million, targeting investments in top early-stage firms across Jamaica and the Caribbean. These firms will offer high-demand products or services that can be easily accessed worldwide.”

The fund will commence operations in June 2024.