Funding - Afrikan Heroes

How Giraffe Played The VC Game (And Won Funding)

September 26, 2019

Local start-up Giraffe has accomplished what many entrepreneurs would consider impossible: Not only did it win the Seedstars World’s Best Global Startup Award, it has also secured funding from Silicon Valley VC firm Omidyar Network. Here’s how the founders have managed it.

Vital Stats

Players: Anish Shivdasani and Shafin Anwarsha
Company: Giraffe
Established: 2015
Background: Giraffe is a fully-automated mobile recruitment agency service that enables businesses to recruit medium-skilled workers quickly and affordably.
Visit: giraffe.co.za

Most start-ups would kill for the sort of trajectory Giraffe has enjoyed over the last 18 months. Since launching early in 2015, the company has enjoyed solid growth and traction, received some great PR, walked away with an international award and managed to secure funding from a Silicon Valley VC firm.

This is all incredibly impressive, and there’s no doubt that most start-ups would love to emulate Giraffe’s success. So how have company founders Anish Shivdasani and Shafin Anwarsha managed to get the whole world talking about Giraffe? Here’s their advice on attracting VCs to your start-up.

Solve a real problem

“We looked at the South African landscape and identified unemployment as a real problem. Then we asked ourselves how we could use technology to address and remedy the problem in the short term, if not solve it,” says Anish Shivdasani.

“We did this for two reasons: Firstly, we felt that there was a certain obligation to try and solve a real problem that the country was dealing with. Secondly, we realised that by looking at an emerging-market problem, it was not something that Silicon Valley start-ups would be looking at. We wouldn’t be competing with large and well-funded companies.”

So what does Giraffe do? Essentially, it allows jobseekers to upload a CV to the company’s mobi site for free. When employers need to hire, they simply submit a staff request at www.giraffe.co.za and algorithms sort through the thousands of CVs in the database and automatically identify, contact and schedule interviews with relevant candidates.

“We wanted to make the hiring process as easy and hassle-free as possible, both for employers and jobseekers. This meant coming up with an innovative solution. We created a system that allowed a CV to be completed quickly, but that didn’t require a lot of text. The system navigates a jobseeker through various options, ascertaining his or her skills and experience. So you don’t need to deal with hard-to-understand text,” says Shivdasani.

Lesson: Come up with a truly innovative product or service, and you’ll find that funding isn’t nearly as hard to come by as people often say. Build a solid company that addresses a real problem, and funding will find its way to you.

Bootstrap as much as possible

Unless you’re a hot Silicon Valley start-up with unicorn potential, you’re unlikely to attract funding until you’ve shown some traction.

Shivdasani and Anwarsha didn’t even think about funding during the early days of Giraffe. “We were focused on getting the platform and the business going,” says Shivdasani. “We had put our own money into the business and managed to give ourselves 12 months of runway. For that period, we didn’t give any thought to VCs and funding.”

“We also found that VCs will usually be reluctant to invest if you haven’t bootstrapped for a while,” adds Anwarsha. “They want to see that your company has some traction, and they want to see that you’re invested — that you’ve put your own money into the business and that you are committed to making it work.”

Lesson: Bootstrapping your business is a good idea. The best way to build a sustainable company is to spend as little money as possible up-front and get cashflow-positive as quickly as possible. Depending on funding for survival is risky. What if the money falls through? Create a business that can sustain itself. Rely on funding only for scaling.

Let the money come to you

“While we bootstrapped early on, we also met with investors. These were mostly people we had been put in contact with via our own personal networks,” says Shivdasani. “Importantly, we never asked for money. In fact, to this day, we haven’t asked for money. We simply introduced ourselves to investors and placed Giraffe on their radar.”

By introducing potential funders to the company, but not asking for money, the founders of Giraffe let the company’s performance speak for itself.

“We simply stated our intentions when we met with investors. When we saw them again six or twelve months later, we could tell them that we had followed through on our plans. We had attained some real traction, which made us worth investing in,” says Anwarsha.

Lesson: It is a stark reality of the start-up scene that the companies without much of a need for funding are usually the companies that attract it. This is hardly surprising. Investors want to fund companies with growth potential, not start-ups struggling for survival. So, focusing too much on attracting investment can be counter-productive. Instead, get the fundamentals right. Build a sustainable business. If you do that, the money will eventually come to you.

Don’t underestimate the value of PR

“While working together in the boardroom, I received an email from SeedStars to take part in the South African leg of its global start-up competition,” recalls Anwarsha.

“Anish told me to forget about the mail and get back to work. We were very careful not to be distracted from our primary goal of building the company, but I was keen to give it a try. Anish said it was okay, but there was one condition: Make sure you win.” Anwarsha did win, and it had a profound and immediate impact on the company.

“Until that moment, we had underestimated the impact that good PR could have,” says Shivdasani. “I was interviewed by John Robbie on 702 for a few minutes. Suddenly our servers were being overrun with new jobseekers and employers. It made us realise that entering things like start-up competitions is a good idea because of the PR it can generate.”

Lesson: Marketing can be useful, but nothing compares to great PR when trying to introduce your start-up to the world. Winning a start-up competition — of which there are no shortage these days — is a good way to do it. Another is to contact media houses and pitch your story. It’s important, though, to focus on the problem you are solving. Journalists are particularly interested in companies that are either innovative, or working at solving social issues.

Don’t just take the money

It’s very hard to say no to VC money, but before you grab anyone’s cash, it’s worth taking a moment to consider the long-term implications.

“It’s important to get on with the people who will be investing in your company. You need to be able to work with them. We were approached by another investor as well, but we ended up going with Omidyar Network — who had approached us after we won the local SeedStars event — because the firm was asking the right questions. They grilled us hard, but we realised that as an impact investor, they could bring value to the business,” says Anwarsha.

Giraffe has also been careful in how much investment it has actually accepted.

“After winning the local SeedStars competition, I travelled to Switzerland to represent Giraffe in the global event,” says Anwarsha. “To my complete surprise, I won. It was a surreal experience.”

The prize came with a maximum investment from SeedStars of $500 000, but Giraffe was reluctant to take it.“We had already closed a round of funding and had enough runway for at least 18 months,” says Shivdasani.

Lesson: Equity in a start-up can be cheap, and many founders have kicked themselves for giving away too much too soon. That’s why it’s important to keep operating with that bootstrapping mentality, even if you’ve received some investment. You want money to last as long as possible. The less money you need, after all, the less of your company you need to give away.

Take note

If no one is willing to invest in your idea, you should take another careful look at it. Focus on solving a real problem and the money will usually follow.

GG van Rooyen is a Senior Copywriter at PageFreezer Software, Inc.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Egypt’s Career180 raises $100,000 seed for its career services platform

September 24, 2019

Career180, a Cairo-based career services platform that offers different online and offline services, has raised $100,000 as seed funding from EdVentures, the Egyptian CVC founded by one of country’s leading publishers Nahdet Misr Publishing House, that invests in education startups, EdVentures announced today.
Founded in 2016 by Shrouk Alaa and Mohamed Akmal, Career180 labels itself as a one-stop-shop for university students and fresh graduates helps them kick off their careers. The startup offers different online and offline career services through its web-based platform and series of events including one of Egypt’s largest careers events Egypt Career Summit that it apparently co-organizes with Cairo-based Career Advancers.

The online platform offers users to book online mentorships sessions, watch videos that offer career advice and ask questions about topics related to career development.
Shrouk Alaa and Mohamed Akmal, the co-founders of Career180, commenting on the occasion, said, “We have already worked with EdVentures and are very excited about them investing [in us]. The investment will support our expansion plans and enable us to help more [university] students and graduates with their careers.”
Dalia Ibrahim, the founder of EdVentures and the CEO of Nahdet Misr Publishing House, said, “We constantly aim to empower youth and that’s why we are keen to keep collaborating with Career180 by investing in them. The investment will help them expand their valuable services to equip the youth with the necessary skills and capabilities to meet the market needs.”
Career180 aims to use the investment to further develop its online platform and expand its career workshops and events across different cities of Egypt.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Renewable Energy Startups In Africa Have A New $8m Fund

A new investment fund which is dedicated to renewable energy in Africa has been launched. The new fund is called Empower Invest, which is registered as an Alternative Investment Fund (AIF) under the Financial Supervisory Authority in Norway.

The fund is as a result of efforts of development partners who put it at the service of Africa. In concrete terms, the new fund will be used to finance small renewable energy projects, ranging from 1 to 10 MW.

Here Is All You Need To Know

Titled Empower Invest, the fund will contribute to the know-how and equity to implement solar PV, small hydro and hybrid plants.
It will support projects that are individually too small for traditional project financing. Once completed, Empower will raise green bonds to finance the portfolio of projects.
The fund which will be managed by Empower New Energy will invest in a pipeline of reserved projects prepared by the manager (Empower New Energy) in Kenya, Rwanda, Ghana, Nigeria, Ethiopia and Tanzania, amongst others.
The initiators behind Empower Invest, which is registered with the Financial Supervisory Authority in Norway as an Alternative Investment Fund (AIF), targets to raise $50 million.
Already, over $8m has been raised from Norfund, a Norwegian government private equity firm, and Electrification Financing Initiative (ElectriFI), an EU-owned investment fund that aims to support the private sector in providing electricity in underserved areas in the Serie A share issue.

“It is amazing that we now have succeeded to raise an equity fund that focuses on local solar PV, hybrid and hydro projects. This is the first fund of its kind, and most needed. ” said Terje Osmundsen, founder and CEO of Empower New Energy.

Several private investors also participated in Empower Invest’s fundraising efforts. This is the case of Malthe Winje Automation AS, the Elisabeth Grieg and Stig Grimsgaard Andersen family, Doctor Magne Orgland, Harald Magnus Andreassen and Svein Tveitdal.

“We are delighted to support, for a decade, the ambitions of the Empower Invest fund’s business model, which aims to produce more than 600 GWh of clean energy per year, which will reduce CO2 emissions by 320,000 tonnes per year and create thousands of new jobs and electrical connections,” explains Dominiek Deconinck, ElectriFI’s Director.

Series B issue of approximately $40 million is planned for 2020.

Why The Investors Are Investing

“Norfund sees a huge need for increased investment in local clean energy production in Africa and developing countries in general. The collaboration with Empower will be an important platform for raising private capital for this market” stated Norfund CEO Tellef Thorleifsson.

Stig Grimsgaard Andersen, a private investor in the fund was quoted as saying that:

“If impact-investing is to make a difference, it is important that the investments create value for both financial investors, local communities and the environment. We believe the Empower Fund is an important innovation in this area.”

Harald Magnus Andreassen, chief economist and one of the private investors, noted that local projects and smaller investment amounts receive little attention from international investors and lenders.

However, “the Empower Fund is an important initiative to cover this gap in the market,” said Andreaseen.

To learn more about the fund manager, click here

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

New Report Shows South African Startups Received 41% Of All Venture Capital Investments In 2018

September 20, 2019

This is an encouraging report for South African startups. With more funding opportunities,comes the impossibility of being hindered by inadequacy of capital. In its latest report, Southern African Venture Capital and Private Equity Association’s (Savca) Venture Capital Industry Survey has indicated that southern African VC funds made investments of over R1.5-billion last year in South African startups and businesses — an increase of 31% from the over R1.1-billion invested by such funds in 2017. The figure is expected to be higher this year.

The VC sector had one of the best years in South Africa in 2018, with deal value up 31% over 2017 — reveals a new report

Here Is All You Need To Know

The report which was released earlier this month, was carried out in collaboration with research partner Venture Solutions. The survey features data gathered from over 50 fund managers as well as other industry investors.
While the report also covered countries bordering South Africa — Namibia, Botswana, Lesotho, Swaziland, Mozambique and Zimbabwe — South Africa accounted for 99.7% of all deal value under management currently.

The report was presented at an event held at law firm Bowmans’ offices in Cape Town recently.
The report’s author Venture Solution’s Stephan Lamprecht said last year’s figures were evidence that the VC sector is on an “exponential upward curve”.

“The quantums that investees are raising — we haven’t seen that in recent years,” he added.

Lamprecht said driving the increase has been the recent uptake in the funds registered under the South African Revenue Services’s (Sars) Section 12J of the Income Tax Act.
The incentive allows investors who make investments in approved VCCs — that then invest in qualifying small companies — a tax deduction.

The year saw a substantial growth in seed, startup deal value

In 2018, 41% of all deals by value were in startup capital.
The total number of deals invested through seed or startup deals amounted to 60% of all deal value — up from 57% in 2017 and 49% in 2016.
Despite the growth in early-stage deals by share of deal value, Lamprecht said South Africa still needs to improve the system that taps into talent and that more must be done to get industry to invest in the startup sector, beyond just enterprise development deals.

Firms Located in the Gauteng Province of South Africa got the biggest share

When it comes to the location of investees, Gauteng businesses last year received the largest share of VC money (R658-million), up 38% from 2017. This, while the Western Cape saw an increase in 2018 of 14% in VC investments. amounting to R433-million.
The report also noted that KwaZulu-Natal backed VC businesses saw a significant increase in activity in comparison to 2017, with R71-million invested in 2018.
By number of deals, Gauteng has shown significant growth. In 2014 just 19 deals were conducted in the province, climbing to 41 in 2017 and 73 last year.
In comparison, the number of deals in the Western Cape has been more stable — 41 in 2014, 45 in 2017 and 61 last year (see below graph — Figure 7b).

Low number of exits was also recorded in the year under review

Concerning however, noted the report is that overall exit activity remains low. Just 11 exits took place last year, compared to 15 in 2017. Most exits are by trade sales.
Of the 11 last year, six were reported as profitable, compared to nine in 2017 (see below, Figure 9).

Lamprecht attributed the low number of exits to evidence of South Africa’s nascent VC industry. He pointed out in the report that a range of opportunities and early stage investment challenges need to be addressed in order for the industry to continue to grow and mature.

VC has R5.3bn under management

So, that was 2018, but how much capital have VC fund managers in the Southern Africa currently deployed?
The report puts this figure at the end of 2018, at over R5.3-billion, invested in 665 active deals.
Most of these funds are being deployed in the Western Cape (48.2% of active deal value), followed closely by Gauteng (42.5%). By number of transactions the Western Cape accounts for 52.6% and Gauteng 34.6% (see below graph).

Manufacturing comprised 14.2% of the value of all deals invested at 31 December 2018 with the food and beverages sector and medical devices and equipment sector accounting for 12.3% and 10.5% respectively (see below graph — Figure 3a).
Software amounts to only 5.2% of deals if taken by value (and 9.4% by deal number — see below graph — Figure 3b), and consumer products and services to 5.4% (10.8% by number), but combined these make up one in five transactions under management currently.

The report also noted that deals in energy type businesses amount to the fourth largest share in active deals if taken by value. Lamprecht pointed out that the growth in this sector had been stimulated by the 12J tax incentive, with investors having invested in solar PVR units among others.
For example, the number of deals jumped to 24 in 2018, from less than four in 2017. Software was also up significantly, from eight to 17.

In all, consumer products and services account for the largest share of active deals by number (10.8%), followed closely by manufacturing (10.4%) and software (9.4%).
The latter mirrors the global trend for investing in deals involving software, including many transactions classified as Consumer Products & Services where the business activity involves software, noted the report.
South Africa’s economy might be mired in political and economic uncertainty, but the VC sector is growing in leaps and bounds.
Says Lamprecht: “We haven’t seen anything that will decimate the sector, despite the current economic and political challenges”. The question is, will it keep booming?

Click here to read the report

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

A New $50 million Reefknot Investments Fund For logistics and Supply Chain Startups

September 7, 2019

Logistics and supply chain startups in Africa have a chance to pitch to Reefknot Investments for their funding. Reefknot Investments, a joint venture between Temasek, Singapore’s sovereign fund, and global logistics company Kuehne + Nagel, has announced the launch of a $50 million fund for logistics and supply chain startups. The firm is based in Singapore, but will look for companies around the world that are raising their Series A or B rounds.

Marc Dragon, managing director Reefknot.

Here Is All You Need To Know

Reefknot Investments is especially interested in companies that are using AI or deep mind tech, digital logistics and trade finance to solve problems that range from analyzing supply chain data and making forecasts to managing the risk of financing trade transactions.
Managing director Marc Dragon said Reefknot will serve as a strategic investor in its portfolio companies, providing them with connections to partners that include EDBI, SGInnovate, Atlantic Bridge, Vertex Ventures, PSA unBoXed, Unilever Foundry and NUS Enterprise, in addition to Temasek and Kuehne + Nagel .
Dragon, a veteran of the supply chain and logistics industry, says Reefknot plans to invest in about six to eight startups. Data from Gartner shows that about half of global supply chain companies will use AI, advanced analytics or the Internet of Things in their operations by 2023.

Read Also: African Renewable Energy Startups Get A New Fund

“There is a high level of expectation from vendors that because of technology, there will be new methods to do analytics and planning, and greater visibility in terms of information and product, materials and goods flowing throughout the supply chain,” says Dragon.

Reefknot will also establish a think tank that will work with industry experts and government organizations on forums, research and exploring new logistics and supply chain business models that startups can bring into fruition.

To get in touch with managers of the fund visit Reefknot Investments website

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Nigerian Startup TechAdvance Raises $1m In New Funding To Expand To Emerging Markets

August 9, 2019

Nigerian startups too are having a field day here. TechAdvance, leading Nigerian payment application development company is the latest to join startup fundraising bandwagon. The payment solution has raised $1m in new funding, putting the startup’s valuation at USD $20M.

Here Is The Deal

The investment was led by the Bahrain-based energy investment company Lamar Holding.
Lamar’s investment will support TechAdvance’s strategy to substantially expand its global expansion.
The move will broaden Lamar’s successful portfolio into the technology industry, and give the company a foothold into the African continent.

‘‘The payments space in emerging markets is buzzing with opportunities but faces a number of major barriers. These funds will allow us to shift our focus to these opportunities — especially the launch of our digital bank, without compromising our existing business lines,” Founder and CEO of TechAdvance, Edmund Olotu said.

A Glance At Lamar Holding

Lamar Holding is an established developer and long-term operator of projects across Saudi Arabia’s national energy infrastructure network. Through a portfolio of companies and strategic joint ventures, Lamar Holding has garnered an unrivaled record of winning and delivering contracts in the Saudi energy market.

Why Lamar Holding Chose To Invest In TechAdvance

On why TechAdvance, Hani Abdulhadi, Vice President at Lamar Holding noted:

“We are delighted to make this investment in one of Nigeria’s most exciting and innovative companies. This is an opportunity for Lamar and TechAdvance to collaborate and distribute its expansive suite of digital solutions to emerging markets in Africa and the Middle East.”

A Glance At TechAdvance

TechAdvance is a payment application development company founded in 2009 with a strategic focus in developing and deploying niche payment companies to serve the needs of large public and private sector organizations in Nigeria. It oversees various niche subsidiaries including GPay Africa, PayElectricityBills, Advance Bancorp Digital Microfinance Bank, and others.
TechAdvance runs a network of subsidiaries, each of which focuses on different verticals in emerging markets including utility bill payments, digital financial services, and transportation software. Earlier this year, the company was highlighted as one of the top companies to Inspire Africa in the London Stock Exchange Group’s Report for 2019.
TechAdvance, through its subsidiaries, recently acquired a microfinance bank and obtained approval in principle for a Payment Solution Service Provider (PSSP) license from the Central Bank of Nigeria. The company also recently received approval from the Central Bank of Bahrain to operate in the country, signaling its intentions to grow beyond Nigeria and Africa.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

How This Company Is Trying To Bridge Funding Gaps For Small Businesses In South Africa

August 7, 2019

Despite the important contribution small-to-medium enterprises (SMEs) make to the economic growth of South Africa, the sector battles to access funding using traditional means.

And even though there are about 2.5 million SMEs in the country, the biggest stumbling blocks they encounter still revolve around the risk barriers and red tape associated with traditional funding products. The underwriting systems and financials required by institutions to finance small business simply do not provide a true reflection of operating conditions.

This has seen the emergence of fintech solutions and alternative funding products that have been steadily gaining momentum.

Yet most local SMEs are unaware of how and where to gain access to funding. For many, the only apparent path is to obtain funding via banks. By the time the business receives the funding (if ever), it is often too late and beyond the point where it can help the company turn things around.

However, funding entails so many different nuances beyond the traditional, and SME owners need to make themselves aware of what is available, and what will suit their specific requirements.

For their part, investors must adapt their digital strategies to engage differently with SMEs. For example, by using mobile as a platform for funding, the investor not only differentiates itself in the market, but the SME gains access to a real-time solution capable of addressing its unique needs.

This cannot happen on its own.

By partnering with a range of fintech organizations, the mobile-driven funding model provides SMEs with real-time, pre-approved offers based on turnover. And thanks to the availability of machine learning and artificial intelligence, these solutions will become more common. However, investors need to be viewed as more than just funders.

They can be true partners in working with SMEs and assisting them in positioning themselves in the market. Of course, the benefit of this is that they become part of a growing enterprise that has a direct impact on the economy of the country.

By incorporating electro-neural networks that enable the use of a sophisticated decision-making methodology requiring no human intervention, funders can more effectively identify where to invest their money. Invariably, the technology has built-in affordability metrics providing the SME with the peace of mind that funding received will not leave them over-indebted.

The graphic below shows the contribution to total turnover by all companies in South Africa in 2015, based on their size (sizes are determined by DTI, cut-offs and adjusted for Stats SA sampling purposes).

Behind-the-scenes, machine-learning algorithms have a deep understanding of business trading patterns and seasonality. This ensures the SME is unable to access more funding than what the business can afford. Such an affordability measurement is a great way to drive financial inclusion, irrespective of physical location, without leaving the SME over-indebted.

Using this sophisticated technology also enables funding to be done faster and more conveniently than before. Eliminating reams of paperwork and manual-intensive application process enable the owner to keep their focus on driving business growth.

And thanks to the ubiquity of mobile, SMEs can apply for funding irrespective of the time of day, using an environment that they are comfortable in. Funding requires no collateral, or security, and is completely unrestricted.

Depending on the funder, it is possible for SMEs to access funding with same-day pay-outs. However, for it to be truly inclusive, such a solution must be available to formal and informal businesses.

For our part, Retail Capital is driving this mobile focus very strongly to be the first to market with a platform that does exactly all of this. It is about delivering SMEs with an enabling environment to get funding using more innovative methods as quickly and effectively as possible. In fact, this smarter funding approach has resulted in mobile now representing more than 20% of the funding taken up at the organization.

Irrespective of the platform used, funding is the lifeblood of an SME. In these challenging market conditions, a multi-product approach that highlights how digital is changing access to working capital is necessary.

This creates a powerful platform for growth and the betterment of the economy, entrepreneurs and the country’s SME sector.

Miguel Da Silva is the Managing Director of Funding at Retail Capital.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Egypt’s MoneyFellows Raises Over $1 Million to Digitize Money Circles (gameya)

August 5, 2019

Egypt’s MoneyFellows has just joined the list of startup fundraisers in Africa. Currently, it appears Egypt’s startup ecosystem is having a field day. The Cairo-based fintech has raised over $1 million in a bridge round (Pre-Series A).

Here Is All You Need To Know

The investment came from 500 Startups and Dubai Angel Investors, both of which had previously invested in company’s seed round as well, last year, Beirut-based Phoenician Fund, and some individual investors including some of its previous angels.
MoneyFellows plans to use the latest investment for scaling the userbase mainly. The also plans to raise a $3 million Series A by the end of this year.

“With steady growth in our user base, we have been working hard over the past year in order to optimize and perfect our product and are now ready to begin our scaling journey. We will dedicate the money from this bridge round to raise greater awareness for MoneyFellows, in order to allow a much greater number of users to access our application and meet their saving and financial needs,” noted Ahmed.

The startup also has secured corporate deals with different companies in Egypt in order to facilitate the participation of their employees in money circles.
MoneyFellows has also partnered with different financial institutions including Fawry to make it easy for its users to pay their monthly installments and receive the payouts. Its partnership with Fawry allows users of MoneyFellows to pay installments at over 80,000 Fawry Point-of-Sale devices located all across Egypt and receive their payouts at over 200 Fawry Plus stores.

Image result for Egypt's startup ecosystem — Egypt Startups Ecosystem

A Look At MoneyFellows

Founded in late 2016 by Ahmed Wadi, MoneyFellows is digitizing concept of money circles (ROSCAs), commonly known as gam’eya in Egypt and other Arab countries.

The years-old practice that is common across many countries in the world, known as chit funds in India, committee in Pakistan and Tandas in Mexico, allows a group of people (normally friends or coworkers) contributes a fixed installment every month to a pool with one of the members taking whole pool as payout every month. The circle ends when everyone receives their payout and is usually repeated if the participants are interested.

MoneyFellows with its group pooling platform for credit and savings is digitizing the entire process of money circles with a scoring model that compliments current offline model, making it more scalable, safe and efficient.

How The Startup Works

The users set up their profile on MoneyFellows and upload documents to verify their income and personal details. The more information and verification documents they share, the better their score and limit. Depending on MoneyFellows’ credit assessment, a user is then shown different matching circles. The user then selects one of these circles, a preferred (available) slot, and mode of payment and payout.

MoneyFellows makes money by charging a small service fee on monthly installments paid by the members.

“Our business model is currently comprised of collecting service fees from our users depending on their payout position in the money circle — starting with 5% fees for users with early payouts at the beginning of the circle, incrementally decreasing to zero fees for users paid out at the end of the circle. With millions of dollars moving through our accounts MoneyFellows are able to earn a percentage of float interest on our money in circulation. We are also planning to introduce several new options to generate revenue, including allowing our users to utilize MoneyFellows for bill payments, as well as using MoneyFellows in a variety of merchant locations,” explained Ahmed in a conversation with MENAbytes.

Speaking of their expansion plans, Ahmed said that they’re aiming to expand in MENA to different neighboring countries in the region in 2020 after closing their Series A. The startup also plan to expand into some Africa countries in 2021 as there are high prevalence and participation in offline ROSCA schemes, allowing MoneyFellows to access hundreds of millions of potential users in these markets. The startup is currently in advanced discussions with many key financial and telecommunication players in MENA to work on its potential expansion there.

Originally started in the United Kingdom, MoneyFellows moved its headquarters to Egypt later and currently employs a team of over 40 employees, all of whom are based in Cairo.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Nigeria Based Mobile Solutions GONA Raises Multi-million Dollar Fund For Expansion

August 4, 2019

More Africa-focused startups are raising funds to either expand or grow their businesses this year. Apart from Opay’s recent funding round, GONA, the Chinese startup that offers cashless bus services and payment solutions with a focus on the Nigerian market is the latest to join the bandwagon.

This is remarkable because it shows that the African startup ecosystem is gradually fusing into the global startup ecosystem.

Here Is The Deal

News website, c.m.163.com says the Chinese-led investment came from Crystal Stream Capital, UnityVC and Shaka VC.
According to Liu Xiaojun, the founder and CEO of GONA the round of financing will be used for team building and product technology upgrades.
This new investment will further allow GONA to employ more locals to help develop the product and expand its popularity.

“We will try to employ the best people to help the most Lagosians have a better daily commuting experience,” says co-founder, Noah Gu.

Larry, a partner at ShakaVC, notes that the minibus scene provides more efficient and convenient travel services for hundreds of millions of Africans, and the market potential is huge.
As the first Chinese fund to focus on early African investment in Africa, ShakaVC will support the development of GONA in local resources, experience, and capital.
GONA boasts of thousands of active users and nearly 10,000 transactions every day.

What GONA Does

GONA is a mobile payments platform with primary operations in Lagos.
GONA is enabling cashless payments on ‘informal transit’ public buses in Lagos and is also working to solve the pains of inconvenience in the local travel market. This it is doing by using technical means to improve operational efficiency.

‘‘The Rains Are Here, You deserve a less stressful bus ride to work. Pick up your smartphone and purchase a ticket on GONA, monitor the closest buses to you and hop onto one. Pay for your ride in style, avoid the chaos of “No Change”, Gona tweeted.

The startup recently announced the completion of a multi-million dollar Pre-A round of financing.
Even though GONA is headquartered in China, Lagos remains its primary focus. In Lagos, GONA has fully completed localization, with roll-out in certain routes within Lagos, one of which is Yaba to the University of Lagos (UNILAG) campus.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Here Is The Pitch Deck That Secured Clearbanc $300m in Series B Financing Less Than A Year After Its First Funding Round

Less than a year after its first round of venture funding, the Canadian Clearbanc, a startup which provides funding for other startups to spend on marketing and customer acquisition, has secured $300 million Series B financing round on Wednesday. This is record-breaking for a startup that just raised $70 million in December 2018.

The round was led by Highland Capital and existing investors Inovia and Emergence Capital.
Canada-based Clearbanc, which was pitched as an alternative to traditional venture capital funding, last raised $70 million in December.
See the pitch deck the Clearbanc team used to get traditional venture investors on board with its unconventional sales pitch.

Clearbanc is betting that venture capital is the next in line for disruption, and they just raised $300 million in venture funding to prove it.

The Canadian startup, which provides funding for other startups to spend on marketing and customer acquisition, announced Wednesday a $300 million Series B financing round led by Highland Capital, Inovia, and Emergence Capital. The financing portion of the round was led by Arcadia Funds with participation from Upper90 Ventures.

Clearbanc pitches itself as an alternative to venture capital for startups spending heavily on things like Facebook and Google ads, and this is its second venture funding round in less than a year. According to Pitchbook data, the company closed a $70 million Series A in December.

Clearbanc claims to automate the pitching process using a machine learning model that can supply companies with anywhere from $10,000 to $10 million in funding instead of giving up a portion of the company to an investor just to turn around and spend the funds on ads. This model works particularly well for e-commerce startups that need to get in front of new customers to grow, according to Gary Vaynerchuk, CEO of VaynerMedia and Clearbanc investor.

So how was the Clearbanc team able to sell traditional venture investors on a model that is in direct competition with their own? Here’s the pitch deck that convinced investors that disruption could be worth $300 million.

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Source: Click here to see the complete deck and full article

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.