Africa-focused venture capital firms rarely invest in startups in the West African country of Benin Republic, but the country’s government is not buying that apparent abandonment. To that effect, the country has invested in eleven startups under the Oumandéra funding scheme, after several phases of selection. The funding will enable them to boost their businesses. The eleven startups are part of the first class of 2020–2021 under the Digital Entrepreneurship Support Fund (FAEN).
“Housed under the Digital Entrepreneurship Support Fund (FAEN), Oumandéra is a grant worth between 5 and 50 million CFA francs per Beneficiary that the Beninese State has decided to grant to startups in order to help them start a new phase of the development of their activities. Winners are selected following a selection process in three phases: a pre-selection, a written evaluation and pitches in front of a panel. Oumandéra means in Batonou language “he helped me”. And here “he” is put for the Beninese government which has a political will to help startups. Oumandéra began in October 2020 with a selection process. Applications were received over a one-month, two-week period. A total of 114 files were received. After several pre-selection phases, 11 files received the jury’s attention,” said FAEN Coordinator Jessica Gaba.
One Of The Few Cases Where African Governments Come To The Aid Of Local Startups
Although not among Africa’s “Big Four” in terms of startup investments, Benin Republic has joined a few countries in Africa where governments support local startup ecosystems.
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Others are Tunisia, Algeria and Egypt which have recently implemented policies as well as instituted national funds to support startups. South Africa used to be among the list but has since scrapped Section 12J provisions which gave startups far-reaching tax incentives and funds accessibility.
The eleven Beninese startups received checks worth 10 million to over 29 million CFA francs, depending on the relevance of their development needs.
“The FAEN is a project designed since 2018 following the advocacy of the Minister of Digital and Digitization. It specifically wants to address the issues of companies operating in the digital sector. Indeed, these companies do not often have the opportunity to obtain loans from banks or financial support ,” recalled Gaba.
A call for applications was launched in October 2020, which resulted in 114 applications being registered. For 3 months, the startups went through the stages of preselection, written evaluation of applications and pitches before an evaluation committee. Only eleven of them were subsequently able to pass the filters.
They include: Go Medical, Benin Fintech Group (Bft), Fedapay, Gounou, Ylomi, Tic gro Business, Ola Medical Services, Africa Puzzle, Jinukun, Medom Benin and Tech It All Engeneering.
However, the selected startups would have to participate in a 6-month acceleration phase before they can get hold of the funds.
Apart from funding, FAEN is also interested in training by providing businesses with qualified human resources. The fund also focuses on visibility to allow startups to travel, take immersion courses, and connect with other incubation and acceleration ecosystems.
“Beyond the financial contribution, this grant is like a decoration to allow us to move on the right path. For the most part, we are developing in the sub-region, and supporting us means making us ambassadors of Benin internationally,” Amos Avocè, CEO of Benin Fintech Group (BFT) said on behalf of the beneficiaries.
For her part, the Minister of Digital and Digitization, Aurelie Adam Soulé Zoumarou, also congratulated the winners:
“This award is one among many. The credit goes to you. We are celebrating your persistence and your ability to fight every day to prove that you are people we can invest in. The state wants to help you, and through this funding, help your businesses that are already at a stage, to go even further, to outsource and to conquer other markets.”
Benin republic startups
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer