Decagon, the tech startup which combines lending, training, and job placement to help exceptional people launch careers as software engineers have closed a $1.5m seed equity round from early-stage VCs as well as a $25 million student loan financing facility from Sterling Bank.
Operating at the intersection of fintech, edtech, and the future of work, Decagon attracted investment from early-stage investors including Kepple Africa Ventures, Timon Capital, as well as angel investors like Paul Kokoricha, managing partner of the private equity business of Nigeria’s largest PE firm, ACA, and Tokyo-based UNITED Inc. who themselves run a tech training business in Japan.
The company was founded in 2018 by Chika Nwobi, a successful serial tech founder who achieved one of Africa’s first tech IPOs in his first company, MTech, and went on to either found or fund over 20 other startups including Jobberman, Cheki, and Oya. According to Nwobi “Decagon aims 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%. Funding for local startups is growing massively but companies now face a shortfall of skilled tech talent. US, German, and UK-based companies are also looking for the best talent from all over the world but often need help accessing Africa’s best. 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.”
Decagon created Nigeria’s first-ever merit-based student loans in partnership with Sterling Bank and the Central Bank of Nigeria. This enables Decagon 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. This has proven very popular with over 80 thousand people applying from which 440 have been accepted so far. “Three things I am especially proud of are our 100% placement rate upon graduation, the 100% loan repayment rate by DecaDevs, and the 410% salary uplift we are seeing after Decagon ” Nwobi disclosed.
Speaking on the student loan financing, Divisional Head, Sterling Bank, Obinna Ukachukwu 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.”
Similarly, the funds will assist to deepen the company’s pursuit of gender balance by increasing female participation from 25% currently to 50% by 2024. The company is passionate about creating opportunities for women and is helping achieve a gender-balanced workforce amongst its partner organizations.
Decagon’s early capital-efficient strategy to growth and customer acquisition has distinguished the company from various competitors. Discussing the funding strategy surrounding the seed funding, Nwobi said: “We were already profitable and growing 500% 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.”
Chris Muscarella, Partner at Timon Capital added: “We’re thrilled to work with Decagon to build up the top 0.5% 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.”