Decagon, A Catalyst For Tech Talent, Closes A $1.5 Million Seed Equity Round
Decagon, a catalyst for tech talent, closes a $1.5 million seed equity round
Decagon, a technology startup that combines lending, training, and job placement to assist exceptional individuals in launching careers as software engineers, has raised $1.5 million in seed funding from early-stage venture capitalists and secured a $25 million student loan financing facility from Sterling Bank.
Decagon attracted investment from early-stage investors such as Kepple Africa Ventures and Timon Capital, as well as angel investors such as Paul Kokoricha, managing partner of Nigeria's largest private equity firm, ACA, and Tokyo-based UNITED Inc., which runs a tech training business in Japan.
Chika Nwobi founded the company in 2018 after achieving one of Africa's first technology IPOs with his first company, MTech, and going on to found or fund over 20 additional startups, including Jobberman, Cheki, and Oya.
According to Nwobi, "Decagon's mission is to address black people's under-representation in technology globally, beginning with Nigeria – the world's most populous black nation, with approximately 50% youth unemployment. While funding for local startups continues to grow at a rapid pace, businesses are now facing a skills shortage in the technology sector. Companies headquartered in the United States, Germany, and the United Kingdom are also on the lookout for the best talent from around the world, but frequently require assistance in gaining access to Africa's best. Microsoft, Facebook, and Google have all invested in engineering offices in Nigeria, but the majority of other companies cannot, so we assist them in hiring top talent to work remotely as engineers.”
Decagon pioneered Nigeria's first merit-based student loans in collaboration with Sterling Bank and the Nigerian Central Bank. This enables Decagon to offer a Pay-After-Learning ( PAL) program that covers the cost of laptops, housing, internet, meal allowances, and a sustenance stipend for trainees. This has been extremely popular, with over 80 thousand applicants and 440 acceptances thus far.
“Three things I am particularly proud of are our 100% placement rate upon graduation, DecaDevs' 100% loan repayment rate, and the 410 percent salary increase we are seeing following Decagon,” Nwobi explained.
Obinna Ukachukwu, Divisional Head, Sterling Bank, commented on the student loan financing: "We got involved to support alternative education by providing loans to Nigerian students accompanied by financial literacy training. Given the portfolio's excellent performance, it made sense to scale our support to Decagon."
Similarly, the funds will help the company strengthen its commitment to gender balance by increasing female participation from 25% to 50% by 2024. The company is committed to advancing women's opportunities and is assisting its partner organizations in achieving a gender-balanced workforce.
Decagon's early capital-efficient growth and customer acquisition strategy set it apart from competitors. Nwobi stated the following regarding the seed funding strategy:
“We were already profitable and growing at a 500 percent annual rate, but we intend to use this capital to accelerate our mission of transforming exceptional people, often from underrepresented backgrounds, into world-class engineers by connecting them to financing, in-demand skills, and dream jobs.”
Chris Muscarella, a Timon Capital partner, added: “We're ecstatic to partner with Decagon to develop Africa's top 0.5 percent of vetted engineering talent and connect them to global technology opportunities. The frequency with which engineering leaders in our network inquire about sourcing African and Nigerian technical talent has increased significantly, and we're excited to leverage that and assist Decagon in their mission.”
