Funding - Afrikan Heroes

New Funding Round Opens For Small Businesses In South Africa

June 18, 2019

Small businesses in South Africa now have a new source of funding to support their growth. The CDI Growth Fund, which is supported by National Treasury’s Jobs Fund of South Africa is offering small businesses a chance to benefit from its R12.8 million grant.

Who May Benefit From The Fund?

To qualify to benefit from the CDI Growth Fund, the business must specifically:

Be South African-owned business, with the controlling interest of the enterprise (51% of the issued ordinary share capital). The business must be held by South African citizens with valid a South African ID or a South African Registered legal entity itself controlled by South African citizens with valid South African ID.
Operate within South Africa, including but not limited to projects, programs or enterprises of the business.
Be an existing business, at least 1 year old (preference will be given to businesses that have been trading for 2 years or more) with turnover or assets above R1m.
Match 20% of the contribution of the Fund through a cash contribution
Must create one job for every R21,000 grant investment.
Be tax compliant

The table below gives you an idea, of how many jobs are required for a given amount of grant funding.

Additionally, you must:

Not be insolvent or currently under debt administration
Be willing to provide financial statements and all supporting documents required
Commit to training new employees

Once your application is successful, you will sign a contract and report on progress and impact to the Fund administrators on a quarterly basis during and for a two-year period after the project completion.

Application Requirements

Applications can only be made online on the CDI Capital website on or before 12 July 2019 at 17:00.

CDI Growth Fund At A Glance

The CDI Growth Fund is managed by CDI Capital, which was incorporated as a subsidiary of the Craft and Design Institute (CDI) in 2016 to catalyze funding for SMEs.

The funding has been enabled through contributions by the National Treasury’s Jobs Fund, the Technology Innovation Agency (TIA), and the Western Cape Department of Economic Development and Tourism (DEDAT).

Since its launch in 2017, it has already contracted with 38 SMEs, who have collectively created over 160 jobs.

The Fund is in the second year of a five-year disbursement period.

CDI Capital CEO Lesley Grimbeek said that the grant funding they received has had a tremendous impact on their growing business.

“We have seen really rapid growth in the past four years, and in the next two years we are determined to have a facility four times the size of what we currently have, creating between 250 and 300 jobs and bringing our amazing product right across South Africa.

“It’s been a pleasure working with the CDI’s Growth Fund, and it has been very exciting to see the impact it has made in such a short time. We have been able to purchase equipment that we could not have afforded otherwise, and through this we have been able to create more jobs.

“To date, we have created ten new jobs in the factory, and we have the intention of at least another 12 to 13 new positions by the end of the year,” said Grimbeek.

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.

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Zimbabwe: Fintech Startup Payitup Raises $13m In New Funding

May 25, 2019

Zimbabwean fintech startup, Payitup, has joined the league of the few startups in Africa to procure some of the largest funding.

The latest round of funding is around US$13 million from the UK-based Thawer Fund Management. The new round of funding is the largest ever by any startup in Zimbabwe. This would put the startup’s value at US$20 million . Although Payitup has secured seed funding in the past, it has faced challenges securing this larger round.

What Payitup Does

The startup which was launched in 2017, processes payments for DStv, broadband and airtime. The startup plans to commit the funds to system development and operations. The startup also has planned to recruit partners across various verticals, and stands to benefit from its relationship with Thawer Fund Management in more ways than just the obvious financial one.

Chief Executive Officer (CEO) of Payitup Aretha Gonyora said:

“Our goal is to build a more connected financial life for the African people and beyond. Through our mobile and web applications our customers will be able to pay for various goods and services, access loans, investments, insurance and a wide range of financial products. We will be working towards financial inclusion for all and maximising on technology. A lot of people still do not have access to basic financial services, while the people with access to banking services are not fully capitalising on the power of technology.”

Image result for funding for startups in zimbabwe — Most of the funded startups in Africa between January and June 2018 were in the above sectors

Payitup Expansion

The startup plans to remain focused on Zimbabwe in the meantime, but also plans to open its platform to customers in several southern African countries, and ultimately the rest of Africa in the next five years.

Related: Nigerian Ride-Hailing Motorbike Startup Gokada Raises $5.3M In New Funding

Its revenue model will be based on transaction and service fees, and premium subscriptions on selected goods and services, with Gonyora having faith in Payitup’s app-based approach in spite of challenges.

“Not everyone in Zimbabwe uses a smartphone, which has made USSD preferable over mobile applications. This combined with how expensive data has become in Zimbabwe means that our users’ access to the application may be a barrier. Fortunately, we saw this coming and have put in place favourable measures to buffer all our customers to have access to our services,” she said.

The startup also plans to commit a significant amount of the funds to grow the business in terms of awareness campaigns, rebates offered to customers, and other strategic products to gain traction and usage on the app.

This Round of Funding Is So Significant Because It Is So Difficult For Startups To Get Funding In Zimbabwe

According to Gonyora:

“We had been engaging our investor for over a year. The startup ecosystem in Zimbabwe is not that vibrant at the moment, and the current economic condition makes it difficult to get funding. There is still hope. What saw us through in the back and forth of the last 15 months was a combination of having a strong vision and finding people that believed in us.”

Charles Rapulu Udoh

Charles Rapulu Udoh, 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 organisations 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 Ride-Hailing Motorbike Startup Gokada Raises $5.3m In New Funding

Who says giving Nigerian notorious okada riding business model a new repackaged outlook cannot be a viable business model?

Nigerian Lagos-based on-demand motorcycle taxi app Gokada has proven to be up to the game. The startup has just raised US$5.3 million in Series A funding with a plan to expand the number of its motorbikes and available drivers, increase its daily ride numbers as well as grow its team.

Gokada Is Just A Year And Three Months Old

Although Nigerian commercial city, Lagos, has banned motorcycles from plying its major highways, Gokada, defied this rule and formed itself into a more refined business model in February 2018, with a neat, safety-driven business model and more trained drivers.

Customers who need rides in the heavily congested commercial city and the smallest Nigerian state in terms of land mass with a population of 17 million people, can just download Gokada app on their smartphones, or visit Gokada’s website and input their locations and destinations and they would be matched with an available Gokada motorbike. The startup did all that magic in just a year and three months. It secured close to 1,000 bikes and completed around 5,000 rides across Lagos’ Mainland each day, with rides approaching one million in total.

The latest funding is part of the startup’s plan of expanding. Gokada is trying to play a safe game with its highly dangerous business model that demands well-trained drivers.

Related: Egypt: Food-tech Startup Yumamia Raises $1.5M For Expansion To Saudi

Govenment’s rule against the use of motorbikes on the highways of Nigeria’s most populous city is so tight. Recently, the Lagos State Task Force on Environmental Sanitation and Special Offences impounded 115 motorcycles, including 22 branded commercial motorcycles, including ‘Gokada’ and its competitor ‘Maxokada’, for violating the state road traffic laws.

The Task Force stated that the motorcyclists were operating on restricted routes and driving against traffic. The startup has launched a driver training school to train its drivers, and prevent what may be the biggest most possible threat to its business.

Gokada: Who Invested?

The new funding was mostly led by Rise Capital with Adventure Capital, First MidWest Group, IC Global Partners and other several local investors joining. The impact of this round of investment is expected to be felt in the areas of its fleet of drivers, who are sometimes thousands of kilometers away from the location of the hailers.

The startup would also target an increase in the number of its daily rides. At least a 10% increase won’t be bad. In the long run, it is also looking at acquiring more local tech talent who would have to do some jobs about the highly faulty application upon which the startup runs its business. It also intends to explore new verticals for business growth, and provide more value added services to drivers.

Gokada’s biggest competitor is Maxokada which is a bit older, having been founded in 2015, although its initial focus was on-demand delivery where order or packages are delivered in no more than 3 hours. Maxokada may have to fight to retain its market share with its higher pricing model compared to Gokada which is relatively cheaper, although it has better app functionality, and has nearer drivers.

“Our green Gokada motorcycles have become a regular feature of Lagos’ roads in the 14 months since our official launch. Gokada was built with the intention of becoming the future of two-wheel transport in West Africa, and we are fast becoming the go-to platform to hail a motorcycle ride in Lagos. Today’s announcement allows us to accelerate our growth projections significantly, as we continue to grow our market share and look to introduce more product features and services,” said Fahim Saleh, co-founder and co-CEO of Gokada.

Image result for bike hailing startups in Nigeria graph

The Startup Did Not Take The New Funding For Free Though

With the largest investment from Rise Capital, Mr Ayodeji Adewunmi, director at Rise Capital and the co-founder and former CEO of Jobberman, would be displacing former CEO Deji Oduntan. Adewunmi would be taking over as Gokada’s Co-CEO, a role previously performed by Deji Oduntan.

“It is an incredible time to be joining Gokada on this journey to transform transportation in Nigeria and the rest of Africa. I am truly excited about the promise of Gokada becoming the operating system of how cities function optimally and efficiently across Africa. There is no doubt in my mind that this will become one of the most important companies in Africa,” Adewumni said.

Nazar Yasin, founder and managing partner at Rise Capital, said Gokada’s rapid entry into Lagos’ transport market had been transformative.

“We have noticed that some markets like Nigeria and Indonesia, which both have large populations and inadequate road infrastructure, are more likely to be dominated by motorcycle-hailing companies rather than traditional car-hailing players, and Gokada’s relentless focus on product, customer service, and safety has enabled them to take advantage of this dynamic and produce some truly impressive growth metrics. They are reshaping the tech-enabled transport market in Lagos, and we are excited to be partnering with them as they scale,” he said.

In the meantime, this is a big win for the young Nigerian startup. However, there is still so much work to be done to convince the government that it is worthy to be spared from the long-standing ban against local motorbikes on Lagos’ major roads. This would be a highly defining moment in its next ten years’ future as it looks to build a sustainable business. With high emphasis on safety of both its users and other road users and its appreciably cheap fares, the startup would hope to convince Lagos residents that it is a good alternative to the reforming Lagos transport system and the burning agony of spending several hours on Lagos traffic, in a city that is the smallest in Nigeria and that actually would take about three hours to go round in a mini van with an average speed limit.

Image result for Road Transport stats in Lagos — According to Nigeria Watch Database, Traffic accidents account for the most fatalities in Nigeria.
In 2015, FRSC stated that 5440 people died as a result of car crashes.

Charles Rapulu Udoh

Charles Rapulu Udoh, 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 organisations 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.