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HOW AFRICAN FOUNDERS CAN GET THEIR STARTUPS FUNDED

Over the years, one of the most important questions we get asked at TechCabal is, “How do I get my startup funded?” Another is, “Wow, who writes your wonderful newsletters?” 🤭

Both are layered questions, the former, even more so. There’s no one-size-fits-all answer to the question on funding, and we’ve explored the available options through a series of articles, including our Ask a VC flagship which eventually morphed into Ask An Investor. We’ve also chronicled the histories of startups who are at the top of their game in our Next Wave newsletters. 

The game is forever changing, and we have some fresh insight into how African founders can get funded.

Investment is snowballing

The truth is, there has been an influx of investors and investment activity on the continent lately. 

In 2020, the number of investors jumped to 370, a 68.4% increase from 2019’s reported 261 investors. This figure still doesn’t capture in totality the number of angel investors involved in these deals. 

While in 2020, 397 companies secured $701.5 million in investment, the first half of 2021 saw African startups raising $1.19 billion—and the year’s not over yet. 

Long story short, the uptrend continues, meaning there’s capital for African founders. 

But how can they find it?

In this article, experts from Ingressive Capital, a venture capital firm writing $400K cheques to early-stage startups, explore some answers

SAFARICOM RETREATS FROM ETHIOPIA

Ethiopia is in the throes of a civil war that many fear could destabilise the country itself, the Horn and Broader East Africa. 

The conflict is so bad that one of our sources from the manufacturing community in Kenya rescheduled an interview to attend an emergency meeting on the “situation in Ethiopia”. It has also been reported that Kenyan telecom company, Safaricom, which was granted a hard-won license to operate in Ethiopia, has temporarily evacuated some of its employees from Ethiopia.

Safaricom (temporarily) retreats

Safaricom began laying foundations for their operations in Ethiopia after winning a competitive bid for a telecommunications license back in May, paying $850 million for the privilege. Prior to this point, Ethiopia’s telecommunication industry was a monopoly controlled by Ethio Telecom, a company owned by the Ethiopian government.

The liberalisation of Ethiopia’s telecommunications industry was seen as a big moment for development and technology in Ethiopia to the international community. In the months that followed the Safaricom bid, Ethiopia began to make major steps toward digitisation and financial inclusion, going so far as implementing its very own digital payments platform Telebirr in the process. 

What happened? 

A year ago, Ethiopia’s government fell into conflict with the Tigray People’s Liberation Front (TPLF). Since early August, the conflict has spread from Tigray, throughout Ethiopia. Sources of the crisis have been brewing for years, caused by struggles for power, a contested election and cries for political reform. 

The hope is that the current conflict in Ethiopia will come to an end, but the situation seems to be ramping up. 

On Saturday, Twitter temporarily disabled the trends section for its Ethiopian service because of threats of physical harm and violence. 

Dig deeper into the origins of Ethiopia’s current unrest here and here.

COMING UP NEST

Africa is the fastest adopter of cryptocurrency among the regions, according to a survey by Chainalysis, a US-based research institute. 

Chainalysis estimates that African countries collectively received around $105.6 worth of cryptocurrency between July 2020 and June 2021, a 1,200% growth. 

Despite this, however, Africa is still the smallest crypto economy of all the regions. In fact, Africa received just 3% of the total value of crypto in the world.

A DeFi-nite block to understanding

When it comes to crypto, there’s still a lot of sensitisation to be done. While some people don’t understand how it’s done, others are convinced that it’s all a scam. 

According to leading crypto company Luno, an overwhelming majority of people in Nigeria, Kenya and South Africa wouldn’t consider investing in cryptocurrency because they don’t understand what it’s all about. 

They’re not to blame. 

With nerve-wracking terms like blockchain, non-fungible tokens (NFTs), DeFi, DAOs and Series A, there’s a lot of new information seeds that need sowing, and Nestcoin is here to do that job.

Breach-ing the gap

Nestcoin exists to create crypto-native products beyond trading and investments, with a focus on driving the adoption of crypto in Africa. Nestcoin wants to create a community of users that understands crypto, as a way to make their lives easier. They will then harness the power of this community to create new products and embark on projects that can generate revenue.

One of the ways they’re doing that is through Breach, a platform that uses newsletters and blog posts to make easily digestible content that will help everyone make sense of the crypto world. 

Sultan Qadri has more about Breach in Nestcoin wants to create wealth with crypto beyond trading.

TIKTOK SAVES LIVES

Mine and my colleagues’ included. 

The average TikTok user spends about 52 minutes per day on the app. In that time, the probability of learning something new from 30-second clips is at least a hundred-fold. While some of the content on the platform is misleading and harmful, others can be quite helpful, and one trend, in particular, has just saved a 16-year-old girl’s life.

The hand signal for help

If you use TikTok, you’ve probably come across a video where a woman who’s getting abused signals for help using a hand signal. 

In Kentucky, US, a 16-year-old girl used the gesture to passing motorists, and a driver recognised the signal and alerted the authorities. The vehicle carrying the girl was intercepted, and it was discovered that she’d been reported missing two days earlier. 

Authorities were able to arrest the culprit and he was charged with unlawful imprisonment and possession of sexual material pertaining to a minor.

Big picture: There’s been quite a bit of concern about TikTok’s influence on teens, especially considering that some have died after trying out challenges. It’s great to see that some good is coming out of the social media platform. Hopefully, African parents see this and work their broadcast magic too.

OPPORTUNITIES: WORLD BANK INTERNSHIP PROGRAMME

The World Bank is currently open for applications for the Winter 2021 cohort of its internship programme.

The Bank Internship Programme (BIP) offers selected individuals an opportunity to experience the mission and work of the World Bank. The programme is open to postgraduate students pursuing master’s degrees or PhDs, who may choose to intern in different fields including economics, finance, human development, social sciences and information technology.

Selected interns will also be paid an hourly salary and, where applicable, a travel allowance no greater than $3,000.

Find out more and apply here.

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