In a groundbreaking move, the United Nations Development Programme (UNDP) unveiled the ambitious “timbuktoo” initiative at the 24th Annual Meeting of the World Economic Forum in Davos, Switzerland. The initiative, presented by H.E. President Paul Kagame of Rwanda, H.E. President Nana Akufo-Addo of Ghana, the Secretary General of the African Continental Free Trade Area Secretariat, HE Wamkele Mene, and UNDP Administrator Mr Achim Steiner, aims to be the world’s largest financing facility, bringing catalytic and commercial capital together to bolster Africa’s startup ecosystem.
The launch ceremony, attended by global corporate leaders and African financial institutions, marked a pivotal moment in what is now considered the African Startup Revolution. The initiative seeks to leverage the momentum of Africa’s substantial youth demographic and abundance of innovative talent.
H.E. Paul Kagame expressed the urgency of providing tools for African youth to reach their full potential and announced an immediate contribution of US$3 million to kickstart the timbuktoo Africa Innovation Fund. This fund will be hosted in Kigali and aligns with timbuktoo’s billion-dollar target to create more opportunities for Africa’s youth.
“For many African countries, our foremost challenge now is to ensure we put in place the right structures to enable young Africans to create innovative and compelling businesses,” emphasized H.E. Nana Akufo-Addo. “I’m excited about the future of our continent. I look forward to seeing us create a future where innovation is encouraged, ingenuity is supported, and prosperity is shared.”
Promoted by the UNDP, timbuktoo aims to fill critical gaps in the African startup ecosystem by collaborating with governments, investors, corporates, and universities. UNDP Administrator Mr Achim Steiner stressed that timbuktoo represents a new model of development, simultaneously pushing for startup-friendly legislation, global-class startup building, de-risking capital, and introducing University Innovation Pods (UniPods) across Africa.
Currently, Africa’s share of the global startup value is only 0.2 percent, compared to 2 percent of global trade value. The majority of venture capital flowing into Africa is foreign, with 83 percent concentrated in four countries: Nigeria, Kenya, South Africa, and Egypt, and over 60 percent directed to the fintech sector.
“timbuktoo will turn ideas and nascent innovations into meaningful scaling and disruptive pan-African enterprises,” highlighted UNDP Africa Chief Innovation Officer Dr Eleni Gabre-Madhin. “This initiative will generate wealth and well-being for millions of people in Africa and beyond, focusing on innovative solutions for people and the planet.”
Africa’s tech landscape is on the rise, with private venture capital investments growing six times faster than the global average in 2022. With a vibrant youthful population and expanding tech startups, Africa is poised to become a future tech powerhouse. timbuktoo aims to mobilize and invest US$1 billion of catalytic and commercial capital to transform 100 million livelihoods and create 10 million dignified new jobs.
What sets timbuktoo apart is its unique design, blending commercial and catalytic capital to de-risk private investment. The initiative adopts a pan-African approach, engaging with the entire ecosystem, including government policy, universities, corporates, development partners, catalytic partners, and commercial investors. As timbuktoo unfolds, it promises to be a catalyst for positive change, propelling Africa’s startup landscape to new heights.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard.
Amir Matar had been tilling at SWVL since the startup reached across to him to assist it with its legal compliance obligations. As a legal consultant, Matar was expected to help shape the company’s future by defining it in terms of the legal compliance strategies it needed to scale to the next stage. And so for years, Matar attended to this role in the hope that one day SWVL would grow to become a bigger establishment. But when the four-year-old ride-sharing startup recently announced it would be going public via SPAC at a valuation of $1.5 billion, Matar was nowhere to be found. In fact, he had since moved on. Not that that was his voluntary decision, but that he had been forced out by the company’s management.
“First of all, let me thank you for believing in Swvl. We believe that at the moment we can’t support part-timers anymore and we are working now on that across the whole company,” an email from Swvl’s CEO to Amir was quoted as saying. “We believe also that there is still some time until [redacted] becomes a core part of what we do so we decided collectively to end your employment at Swvl. Please consider Swvl your home and come back whenever you need. I am on a plane to [redacted] now, but let’s meet when I am back.”
According to Matar, he provided business development and legal advice to Swvl for no monetary pay, but was given stock in the company. When he approached Swvl’s CEO about the shares, he was told that they were promised on a one-year cliff, which he did not agree with, he said. Amir said that the offer and acceptance of shares made with him were made without any limitations.
While SWVL’s story is unique in that, aside from Matar, the firm has been the subject of several other employee-related complaints, several other African startup companies are presently experiencing or have had major internal conflicts that have jeopardized their very existence.
Understanding how and why these conflicts occur may serve as a major lesson for other startups that are considering or are just setting out on their journeys.
Amir Matar has since moved on to Mastercard as Senior Counsel, Regulatory Affairs for Middle East and Africa. Image credits: LinkedIn
Fights Among Co-founders
Unlike other causes, squabbles among co-founders have single-handedly destroyed the lives of startups in Africa; more so, if the dissenting co-founders carry enormous responsibilities with them.
Conflict among founders, most commonly, may result from the manner of equity distribution, access to key resources in the startup, compensation over time, among other reasons.
Interestingly though, fights among co-founders in Africa have mostly arisen immediately after major financial activities have occurred in the startups.
In Kenya, the disagreement between Kennedy Nganga, Lauren Dunford and Weston McBride of Safi Analytics, which led to the reportedly forcible ejection of Kennedy from the co-founding team (and invariably from the startup) happened soon after the startup landed its $1.8m investment from investors in 2018.
This is also true for Nigeria’s Cars45’s drama, where co-founders Etop Ikpe, Sujay Tyle alongside other executives moved out of the company in droves. The internal quarrels started in 2019, a year after OLX Groupinvested over $400m in the company. Insinuations are rife in the media that the co-founders were dissatisfied with the structure of equity holding in the company.
Also closely resembling this pattern of dispute is that among the co-founders of Gokada, a Nigerian ride-sharing startup. The exit of Gokada’s pioneer co-founder Deji Oduntan happened barely in March, 2019 just two months before the startup announced it raised $5.3m round from investors, suggesting uncertainties over issues related to finance and investments.
The fact that there is apparent difficulty resolving conflicts among co-founders shows that, in most cases, such conflicts can be fatal if they occur, and may affect a startup’s subsequent chances of accessing funding; and in worst case scenarios, cost it its life.
Employee-Management Fights
Virtually all internal conflicts plaguing startups in Africa have a touch of this colouration. Internal employee strife is rife. In fact, a major disagreement between ‘employees’ and Safeboda, partly ensured that the startup shut down its operations in Kenya recently.
Apart from shutting down operations, one major fall-out of the poor management of relationships between employees and management in African startups is that it has led to the resignations of the chief executive officers of the concerned startups.
This is evident in Wejapa, a Nigerian startup that helps tech talent gain access to job opportunities across the world. Following a series of complaints of exploitation and compromised payment standards from a host of the startup’s software engineers, CEO Favor Ori was forced to resign.
Where the rancorous relationships do not result in the shutting down of the operations or the resignations of the CEOs of the startups concerned, the startup may be subjected to intense public opprobrium and, and in worst cases, exposed to litigation liabilities (which are as a result of the employees deciding to slug it out with the startup company in courts.)
For instance, the rancorous relationships between SWVL and its employees over time have led to some of the employees leaving negative reviews for the startup in public domain — which may have significant effects on the startup’s quest to attract the best of talent. One example of how SWVL’s reputation has been impacted by this is this screenshot below of a LinkedIn interaction between a Swvl recruiter and an applicant (posted on Facebook).
Poor management of employee-startup relationships has also landed some startups in courts, which have, in some cases, turned out again them. This is particularly the case of iKOKOtv, which has been subject of such litigation cases in recent time. Just recently, a Nigerian court gave judgment against the company in a suit bordering on wrongful termination of employment, interpretation of a non-disclosure agreement, among others.
Rancorous Startup-Investor Relations
At most, a poor relationship with investors will succeed in giving both the investor and the startup big red flags before watchers-by.
This is certainly what HAVAIC, the prolific South African investor, understood when it recently called off a $4.45m court case against Custostech, a South African startup that protects content using blockchain technology.
Before calling off the case, HAVAIC was said to have signed a termsheet with Custos Media Technologies to close a convertible loan investment with Custos. All of the investment arrangements were agreed upon, and Custos confirmed that the terms had been authorized by their board, the venture capital firm said. According to HAVAIC, Custos then breached the agreement and opted not to proceed with HAVAIC’s investment. Custos’ CEO G-J van Rooyen, on the other hand, refuted this claim, claiming that the business did not sign any agreement with HAVAIC and that it was within its rights to reject its investment offer.
“We believe the founders and Custos have enormous potential to be internationally successful. Our preference is to restore the breakdown and work with the business to its full potential,” Ian Lessem, the CEO of HAVAIC said, before settling out of court with Custos.
Similar incident was reported at HealthPlus, a Nigerian healthtech company. According to founder Bukky George, she was lured to transfer 51.1% stake to a private equity investor, which she said, allowed the investor to oust her as the CEO of the company and replace her with another person.
Prior to the dispute, George owned 48.9% of HealthPlus, while the other investors owned 51.1 percent. However, this shareholding structure proved problematic. George stated that the investors committed to invest $18 million in the company, but only $10 million had been released since the deal was signed in 2018, meaning that the investors were not fully entitled to the 51.1% stake they claimed in the company.
Uganda’s Dunamiscoins’ recent scandal also represents the mounting cases of poor investor-startup relationships, misrepresentations and breaks in communication.
Notably, poor investor-startup relationship appears to be the most powerful internal startup conflict that tend to have crushing effects on startups, as it tends to shrink the chances of future access to funding for the startups affected.
Also notable is the fact that most investor-startup disputes are not largely reported for fear of the effects it would have on the startup’s funding journey as well as on the reputation of the investors.
Ethical Misconduct And Frauds Involving Startup Executives
This has the effect of not only destroying the reputation of the persons involved, but also has the effect of returning the operations of the startup to zero, especially if a major co-founder (the brain behind) of the project is involved.
This was disastrous for South Africa’s Springleap, a subscription-based platform for brands and agencies to source solutions for creative briefs. Springleap’s co-founder, Eran Eyal, was arrested in 2018 on the instructions of New York Attorney General on the grounds that he masterminded the stealing of $600,000 from investors — by fraudulently soliciting investors to purchase convertible notes through false representations about his company, Springleap.
Eran was found guilty in 2019 and was finally deported to Israel from the US in 2020. The huge effects the whole saga had on the startup could only be imagined.
Apart from fraud, sexual harassment has the effect of instantly killing the career of co-founders, if convicted. This would, in turn, push the startup into an entirely uncertain situation.
But for the exoneration of the CEO of Nigeria’s Tizeti, by an independent special investigation committee, from an allegation of sexual harassment, Kendall Ananyi’s career would have hit a brick wall, as was the fate of Kenya’s Alternative Circle, Anthony Kariuki and Ushahidi’s Daudi Were.
S/N
NAME OF STARTUPS
BASE COUNTRY OF OPERATIONS
YEAR FOUNDED
NATURE OF INTERNAL CONFLICT
YEAR CONFLICT WAS REPORTED
HOW RESOLVED
YEAR OF RESOLUTION OF CONFLICT
1
Safi Analytics
Kenya
2017
Kennedy Nganga, one of the ‘co-founders’ alleged that expat co- founders Lauren Dunford and Weston McBride dismissed him from the company immediately the company raised $1.8m, and after the failed to procure a negotiated exit from him.
2018
In April 2021, Nganga claimed that a crowdfunding campaign he initiated to institute a law suit against Safi was disapproved on M-Changa platform, one of Kenya’s crowdfunding platforms, citing his inability to meet the platform’s verification standards as one of the reasons for the rejection.
–
2
HealthPlus
Nigeria
1999
Founder Bukky George alleged that she was lured to transfer 51.1% stake to a private equity investor, which allegedly allowed the investor to oust her as the CEO of the company and replace her with another person. Mrs George owns 48.9% of HealthPlus, while the other investors own 51.1 percent. The reason for this is because the investors committed to invest $18 million in the company, but only $10 million has been released since the deal was signed in 2018.
2020
Under litigation
–
3
Cars45
Nigeria
2016
Co-founder, Etop Ikpe, Sujay Tyle alongside other executives (11 in total) left the company reportedly over squabbles related to equity structures and a potential buy-out. The squabbles started in 2019, a year after OLX Group invested over $400m in the company.
2020
Etop Ikpe has since proceeded to launch a rival company, Autochek.
–
4
Cellulant
Nigeria; Kenya
2014
Nigerian co-founder, Bolaji Akinboro resigned following reports of irregularities concerning post-audit results of the company’s platform, Agrikore. Also sacked were 35 employees for related offences.
2020
No reported case of how the conflict was resolved, but Bolaji finally left to found a new agritech platform, voriancorelli.com.
–
5
Risevest
Nigeria
2019
Former employee accused startup’s CEO of creating toxic work culture.
2021
CEO apologized, admitting that he mishandled the situation which culminated in the departure of the startup’s marketing lead from the company.
2021
6
Wejapa
Nigeria
2020
Developers accused startup CEO of extortion and underpayment for jobs and services they offered.
2020
CEO stepped down to allow for an independent investigation to be conducted. In the interim, co-founder and COO of WeJapa, took over the reins of the company.
2021
7
Gokada
Nigeria
2017
Co-founder, Deji Oduntan, resigned over unconfirmed reports of internal squabbles between members of the management team over funds management. In 2018, staff and software developers also exited the company enmasse, citing uncertainty about the company’s future. Ayodeji Adewunmi, Oduntan’s replacement (as Gokada President and Co-CEO.) also reportedly left the company in 2020.
2019
–
–
8
Ushahidi
Kenya
2018
Allegations of sexual misconduct against co-founder, Daudi Were.
2017
No official report, but co-founder proceeded to found a little known company Mikakati since 2018.
–
9
Tizeti (Wifi.com.ng)
Nigeria
2017
Allegations of sexual misconduct against CEO of the company, Kendall Ananyi, by a former Entrepreneur-in-Training at the Meltwater Entrepreneurial School of Technology (MEST).
2020
An independent legal counsel found, based on investigations, that no case of sexual harassment had been proved, a finding that was accepted by the Independent Special Investigation Committee. As a result, Tizeti’s CEO, Ananyi, has since been reinstated.
2020
10
Alternative Circle
Kenya
2016
Allegations of sexual misconduct against, against CEO Anthony Kariuki.
2017
–
–
11
Custos
South Africa
2014
Sued by investor HAVAIC. HAVAIC was said to have signed a termsheet with Custos Media Technologies to close a convertible loan investment by HAVAIC and its investors in Custos. All of the investment arrangements were agreed upon, and Custos confirmed that the terms had been authorized by their board, the VC said. According to HAVAIC, Custos then breached the agreement and opted not to proceed with HAVAC’s investment. Custos CEO G-J van Rooyen, on the other hand, refuted this claim, claiming that the business did not sign any agreement with HAVAC and that it was within its rights to reject its investment offer.
2020
Custos and HAVAIC reached an agreement on the 30th of November 2020. The dispute was said to have been settled in a friendly and discreet manner.
2020
12
Springleap
South Africa
2007
The New York Attorney General arrested founder Eran Eyal on August 23, 2018 and accused him the next day with stealing $600,000 from investors by fraudulently soliciting investors to purchase convertible notes through false representations about his company, Springleap.
2018
Eran was found guilty, in 2019, of cheating investors out of millions of dollars in three investment schemes, including a $42.5 million (R615 million) initial coin offering, by a New York court (ICO). He was finally deported to Israel from the US in 2020.
2019
13
WhereIsMyTransport
South Africa
2015
Internal employee squabbles suggested the company was in deep trouble, partly caused by mass retrenchment.
2018
Retrenchments occurred as a result of the company “going through a growth phase” and the necessity “to bring people of various experience into the business who are more focused on delivery and go to market,” according to WhereIsMyTransport.
–
14
iROKOtv.com
Nigeria
2011
By forming the firms known as africagent ltd. and freemedigital to operate the business of digital music distribution and offering other entertainment promotional services, iROKOtv.com sued former senior manager for breach of contract. According to iROKOtv, this is a violation of the non-compete and confidentiality duties outlined in the employee non-disclosure agreement signed by both parties on December 1, 2011.
2015
Court ruled against iROKOtv.com
2020
15
WiGroup
South Africa
2007
The company’s chief financial officer (CFO) resigned amid a “financial mismanagement” saga that struck the company. The incident unfolded just months after the company received funding from Virgin Group and retail solutions vendor Smollan to help it enter new and developed markets more quickly. The company had previously requested a forensic audit and as a result had been compelled to restructure its operations and downsize its workforce.
2018
–
–
16
SWVL
Egypt
2017
Several former Swvl employees, including the engineering team, gave Facebook testimonials regarding claimed cases of arbitrary dismissal, maltreatment, labor law violations, and a general atmosphere of discomfort and dread inside the company’s suburban Cairo headquarters.
2019
Founder has been making bold public relations moves to clear the allegations.
–
17
Dunamiscoins
Uganda
2019
Following 4,000 investor complaints, two of the company’s directors, Samson Lwanga and Mary Nabunya, were charged with 65 counts of collecting money under false pretenses and conspiracy to conduct a felony.
2020
Under litigation
–
18
Bitfxt
Nigeria
2016
Investor-startup squabbles that led to the startup $15m funding returned to the investors.
–
Funds invested repatriated to investors’ base.
–
19
Safeboda
Uganda
2015
Rancorous relationships with riders in Kenya
2020
Business operations shut down in Kenya.
–
Based on reported cases.
Some Time-tested Recommendations On Managing Internal Conflicts In Startups
Strong public relations strategies: A startup should have strong PR strategies that will assist in managing its public image. This includes establishing friendly relationships with the press, etc.
Placing all official communications under ‘CONFIDENTIAL’, ‘WITHOUT PREJUDICE’ or “SUB JUDICE” to prevent unfavourable communications from leaking to the public without consequences.
Timely and effective employee crisis management strategies. Strategies should be decisive, fair and not prevaricating.
Entering into standard contracts with co-founders with clear clauses on communications, vesting, cliff and exit periods.
Strict due diligence on investors before acceptance on offers and investments, especially if the investments will involve some significant dilution of founders’ equity.
Crisis management off public radar. Internal disputes should strictly be treated as internal affairs.
Unethical conducts should also be handled off public radar, if practicable.
Strong and professional leadership from the CEOs. CEOs should limit the frequency of unnecessary vituperations on workers.
Use cool-off period and rebranding if the situation created by an internal impasse becomes severely unfavourable to either the startups or the affected persons.
Africa startups conflicts Africa startups conflicts Africa startups conflicts Africa startups conflicts Africa startups conflicts Africa startups conflicts Africa startups conflicts Africa startups conflicts Africa startups conflicts
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
The exact amount raised by African startups from venture capital funding in 2019 continues to be an object of controversy. While this report by WeeTracker shows startups in Africa raised $1.3 billion in VC funding in 2019, another report from Partech Africa says 243 African tech startups raised a total of US$2.02 billion in 2019. Added to the growing list of reports (which, by the way, have unanimously established that startups in Africa did cross the $1bn mark in VC funding in 2019) is this newest report from the association that unites all private equity and venture capital organisations in Africa, African Private Equity and Venture Capital Association. The association’s latest report says about $1.4bn was invested in VC deals in Africa in 2019 across 139 deals — double the value of 2018.
“Despite the relative infancy of the entrepreneurial space in Africa, a culture of entrepreneurship is growing across the continent.
In recognition of the importance of entrepreneurship for economic development, job creation and poverty reduction, various national governments have also begun to implement supportive public policy to streamline business regulation for start-ups and small businesses.
Tunisia and Senegal have both passed Startup Acts to create a better local environment for innovation and entrepreneurship, and startup legislation is also being pursued in Mali, Ghana, and Rwanda. As Africa’s VC ecosystem expands, the actors operating within the industry are also diversifying,” the Association noted in the report.
The report noted that fintech and IT deals dominated the African startup scene accounting for 19% of the total volume of VC deals done between 2014 and 2019.
Both sectors were followed by consumer discretionary (18%) and industrials (12%), while communications services, healthcare and consumer staples collectively account for just 19% of the volume of VC deals over the same period.
Which Countries Are Receiving The Most Investments?
According to AVCA’s report, venture capital companies are investing more in Southern Africa, with the region attracting the highest volume of VC deals at 25%, followed by East Africa (23%) and West Africa (21%), while multi-region deals attracted the largest share by value.
South Africa’s well-developed VC ecosystem accounted for 21% of deals between 2014 and 2019, closely followed by Kenya (18%) and Nigeria (14%).
Here is a major indictment on the African startup ecosystem according to the report:
Even though all the startups that raised between 2014–2019 have their operational base in Africa, about one fifth (21%) of the total number of VC deals between 2014 and 2019 were in companies headquartered outside of Africa.
The report however noted that these early-stage companies with their headquarters outside Africa raised money to expand in Africa or further strengthen their African presence. Of these companies with headquarters outside Africa, the majority (53%) are based in the United States.
At Which Stage Of The Startups’ Development Are The Investors Investing More?
According to the report, investors are investing more at the seed stage of a startup than at other stages.
According to the report, nearly one third (32%) of the total number of early-stage investments reported in Africa between 2014 and 2019 were seed stage deals. These deals, however, accounted for only 5% of the total deal value, showing that while more investors were investing at the seed stage than at any other stages, they weren’t pouring in more in monetary sums into the startups compared to the amount invested at other stages.
Series A and Series B transactions together accounted for 29% of the total volume, and 38% of the total value of early stage deals.
The report also stated that there is a large number of deals in which the funding series are unknown, representing 34% and 29% of the total volume and value of total deals reported.
Another interesting fact from the report is that almost two-thirds (65%) of the total number of all VC deals in Africa between 2014 and 2019 were below US$5mn in size, while a quarter (25%) were between US$5mn and US$20mn in size.
Just 3% of the total volume of VC deals reported from 2014 to 2019 were above US$50mn in size.
For the first time, the report mapped comprehensively where VC investors to the African startup scene came from.
Quite alarming is the fact, according to the report, that North American investors represented 42% of the total number of investors that participated in VC investments on the continent between 2014 and 2019, followed by European based investors at 23%.
African based investors accounted for 20%, followed by Asia-Pacific (8%) and investors based in the Middle East (6%). This, perhaps, shows why the continent lags behind other continents in terms of funding available to its startups ecosystem.
The report also noted that a majority of the investors that took part in VC deals on the continent between 2014 and 2019 were US-based, representing 40%. South Africa (9%), Nigeria (4%) and Egypt (2%), which also constitute three of the most prominent VC hubs in Africa, were within the top 10 countries where investors that participated in VC deals on the continent from 2014 to 2019 are based, the reported noted.
The report also noted the growing interest from Middle East based investors on the African VC landscape. The United Arab Emirates, it noted, was amongst the top 10 countries where investors that participated in VC deals in Africa from 2014 to 2019 are based, representing 3% of the total number of investors.
Finally, the report noted that PE/VC Fund Managers (i.e. firms that have raised, or are currently raising, third-party PE/ VC funds from institutional investors), represented 39% of the total number of investors that participated in VC deals reported in Africa between 2014 and 2019, more than incubators, accelerators, non-profit organisation, family office, government agency, financial institutions or others.
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.
Committed to building the next global unicorns, Aptive Capital is a United States-based $1 million portfolio fund. It is aimed at supporting entrepreneurs and innovators with a focus on social impact within their communities.
Launched in 2020 arising from the funding gap as a result of the pandemic, the fund is committed to supporting, coaching, and increasing the social impact of early-stage entrepreneurs and innovators who are changing the norm and creating social impact within their society.
Calling all early-stage startups in Africa; Nigeria, Ghana, Kenya, South Africa, Egypt, and Ethiopia!
Are you:
A startup with an MVP or
A revenue-generating startup/business with need for funds
Ready to scale and deepen solution in a specific region
Part of a team with at least 2 founders
Seeking funding
You should apply before June 10, 2020, 23:59hours GMT+1
Application process:
25 Startups and Businesses will be invited for one on one Zoom pitch to better understand your model and team fit on a rolling basis from 1st June 2020
10 Selected Startups and businesses will make it for the finals
5 selected viable Startups and businesses will receive $10,000 Investment for equity each through a virtual pitch which will happen between June 15 and 19, 2020 (would be announced).
Do 30–60 seconds video introducing your startup, the problem, and the solution you are providing as well as the social impact it has on your community.
Upload the video on Facebook or Twitter and tag @aptivecapital with hashtag #aptive #10kinvestment #Africa #mysolution
Ensure you are following this handles @aptivecapital and @onekioskafrica @benxpeter @ajadewumi to qualify
Deadline for Application is June 10, 2020, and applications will be reviewed on a rolling basis
Apply Today:
Which innovations Is Aptive Capital looking for?
You can apply if your innovation is listed in one of the following categories or technologies.
Categories
Digital storytelling
eLearning
Precision farming
Access to market
Access to finance
Digital payment
Supply chain management
Food delivery
Animal and crops health
Soil fertility
Logistic and transport
e-commerce
Gamification
Big data
Data analysis
Open data
Data protection
Data security
Cybersecurity
Crowdsourcing
Building digital expertise for farmers (eSkills, eLiteracy)
Technologies
Internet of things
Big data analysis systems
SMS-services
Virtual /augmented reality
3D-printer
Robotics
Apps programs
Database
Blockchain
Monitoring
Social media
Web platforms
GIS (Geo-Information Systems)/Mapping
Artificial intelligence (AI)
Controlling systems
Digital learning software (eLearning system, MOOC platforms, open educational resources)
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
Even with limited funds, startups can hardly survive without intense, aggressive marketing. According to a 2018–2019 Gartner Research study, companies are now spending roughly 11% of their annual budget on overall marketing. The study concluded that “The largest companies…those with more than $10 billion in annual revenue — have the largest appetite for digital advertising, averaging 11.6% of the marketing budget,” while those “with annual revenues of $500 million to $1 billion allocated 8.5% of their marketing budget to digital advertising.” Percent of revenue by different industries on marketing include: Education: 18.5%;Consumer services: 10.7%; Transportation: 4.1%; Consumer Packaged Goods: 8.1%; Service Consulting: 3.4%; Tech/Software/Biotech: 9.7%;Communications/Media: 17.8%; Healthcare: 9.5%; Banking/Finance/Insurance: 5.3%;Retail/Wholesale: 4.7%; Energy: 0.5%; Mining/Construction: 1%. With these in mind, here are the reasons where marketing is inevitable for your startups.
Gradually Building a Customer Base
Consistent quality advertising increases consumer loyalty for your product, service or idea. Advertising seeks to maintain the current customer base by reinforcing purchasing behavior with additional information about the benefits of brands. The goal of advertising is to build and reinforce relationships with customers, prospects, retailers and important stakeholders.
Promotion of Your Products or Services
George Felton, author of “Advertising: Concept and Copy’’, believes that without marketing, you have got nothing to offer. Promoting your business could take the shape of flyers, media commercials, billboards or handbills, and the content adheres to the rules of journalism by identifying who, what, when, where and why of your products or services.
You Can Get A Fair Test Of How Your Products or Services Compare with Competitors’
Gerard Tellis, the author of “Effective Advertising: Understanding When, How, and Why Advertising Works,’’ says that marketing offers your target audience the chance to evaluate whether your product or service measures up against your competitors’. Marketing in this area would help you to consider possible areas of improvement on your products or services, and adjust accordingly.
You Get A Chance To Know How Effective Your Pricing Strategy Is.
With marketing, you get to expose your goods and their prices to the public. Marketing lets you know what your competitors are doing, when the next sale is, and how you can receive the latest pay which is the best value for your money.
Marketing Is All About Generating Leads For Startups
The demand generated by advertising, public relations, and sales promotion “pulls” the goods or services through channels of distribution, notes “Reference for Business.” One of the powerful functions of marketing is to arouse consumers to demand specific products, services and ideas through ad campaigns that target the audiences that are most likely to buy them.” Products, services and concepts are sold in volume, if consumers actually need them.
Brand Building
With good marketing you build brands and develop goodwill with time. But that is never really going to happen if brand identity is not communicated to the public via advertising. Consistent, result-oriented marketing builds on your brand identity and develops good or bad will for you with time.
You Offer One More New Trend
Previewing new trends is a technique employed by advertisers that capitalizes on consumers’ desires to “keep up with the Jones” by owning the latest and greatest product, service or idea. Yours may be the next trend in town, who knows?
Customer Awareness
The more people know your products, the better. With targeted marketing, you can raise the awareness of your customers at target demographics about issues they may be ignorant about. The health industry is often a case in point. Billboards are everywhere about flu and disease outbreak.
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.
The story first came from Tunisia in May 2018, and now Mali. The Malian government has put in place machinery to begin the process of legislating for a new startup Act.
Mali’s Minister of Digital Economy, Arouna Modibo Touré recently declared that all is now set to enact a new Startup Act for Mali.
Mali’s Minister of Digital Economy, Arouna Modibo Touré
Key Insights Into What The Startup Act Is Going To Look Like
Mali’s Startup Act, if passed by Parliament without delay would be second in Africa after Tunisia passed its Startup Act in May 2018.
The Act is going to contain 23 Articles which will set an administrative, economic and fiscal environment favourable to young entrepreneurs who are usually confronted with numerous challenges like company creation and management as well as access to funding.
The Act is targeting startups which are less than four years old, which has Malian nationals owning about one-third of its equities and which have less than ten employees.
Companies of this nature will be provided with seed funding as well as the possibility for innovation grants.
Additionally, a start-up guarantee fund will also be created to help those startups raise about 80% of the funds they need.
Malian government would also help to promote it abroad.
The Act will also encourage startup incubators to be more rigorous in their choice of the various projects and in their coaching.
To make this happen, the Act will provide that for an incubator to be funded, 50% of its startups should have survived for two years. That’s a big deal!
The selection of coaching, mentoring and training professionals will be based on performances and only the best will survive. This will guarantee the success and quality of the firms in the market.
The Act also plans to create research and development laboratories in schools to grow the entrepreneurship sense of its youth. A special scholarship will then be awarded to any student carrying an innovative project.
Mali’s Startup Act is Similar to the Tunisian Startup Act.
Unarguably, Tunisia leads other African countries in bold startup legislations. The Tunisian Startup Act, passed in May, 2018, also reveals the following similarities with the Malian Startup Act.
Tunisian Startup Act defines startups as an entity having legal existence not exceeding eight (08) years from the date of its constitution,while Mali’s makes provision only for startups less than four years.
More than two-thirds (2/3) of Tunisian startups’ capital must be natural persons, venture capital investment companies, collective investment funds, investment, seed money and any other investment body according to the legislation in force or by foreign Startups to qualify as startups under the Act.
The business model envisaged by the Tunisian Startup Act is one that is highly innovative, utilizing cutting-edge technology.
Under the Act, any individual promoter of a Startup, public agent or employee of a private company, may benefit from the right to Startup Leave for creation of a Startup for a period of one year renewable once
Any promoter of a Startup may benefit from a Startup scholarship for a duration of one (01) year. Only three (03) shareholders and full-time employees in the relevant Startup may however benefit from the scholarship awarded.
Young graduates who create startups are free from taxation for three years.
The profits from the sale of the securities relating to the shares in the Startups are exempt from the capital gains tax.
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.
Access to credit is one of the major determinants of success for any startups in Africa. While banks peg their interest rates so high and more family members and friends are getting poorer and poorer and unable to help, there are, however, international grants and intervention funds that are targeted at startups. The following are some of them:
1.The International Finance Corporation (World Bank Group)
The IFC is a member of the World Bank Group and a development finance institution. Being the largest global institution targeting private sector institutions in developing countries, like Africa, companies or entrepreneurs desiring to establish new ventures or expand existing enterprises can approach IFC directly by submitting an investment proposal to the field office closest to the location of the proposed project
Investment Targets so far.
More than $25 billion has been invested by the IFC in African businesses and financial institutions, and its current portfolio (in 2017) exceeds $5 billion.
The IFC invested $3 million in Madagascar’s SMTP Group towards the expansion of its company’s poultry business in the country in 2015.
The IFC provided a $7.5 million equity in Zoona, a financial services business that provides in-country and cross-border money transfers in Zambia, Malawi and Mozambique in 2015
In 2018, it made $11.6 billion in long-term investments in 366 projects, and additionally mobilized nearly $11.7 billion to support the private sector in developing countries.
The Bill & Melinda Gates Foundation is a private foundation founded by Bill Gates and his wife, Melinda in 2000.
The foundation is acclaimed to be the largest transparently run private foundation in the world, with an endowment fund of $50.7 billion as at 2017.
The foundation has three offices in Africa — in Ethiopia, Nigeria, and South Africa. The foundation also maintains presence in Kenya, Tanzania, Ghana, Senegal, Zambia, and Burkina Faso.
Investment So Far
The foundation awarded a grant of $4.48 million to Sidai Africa, a social enterprise operating in the livestock sector in Kenya in 2016.
In June 2017, $2.4 million grant was awarded to Sanergy, an organization that provides access to hygiene and sanitation solutions to people who live in urban slums.
3. Helios Investment Partners
Helios Investment Partners was founded in 2004. The private equity and Venture Capital firm focuses on Nigeria, South Africa, and Kenya.
Th firm manages over $3 billion funds in its care. It seeks to invest between $15 million and $200 million in an individual transaction.
Investment Targets So far:
The private equity firm has major focus on businesses in the financial services, power, distribution, utilities, telecommunications, travel, leisure, fast moving consumer goods, logistics, and Agro-allied sectors.
In 2010, the firm invested $92 million in Interswitch, a Nigerian payment services provider.
The firm also invested $10 million in OffGrid Electric, a solar energy company in Tanzania that is spreading across East Africa, in 2016.
MallforAfrica, Bayport,GB Foods, Starzs Investment among several others are some of its investments.
Although AWDF does not give grants to individuals, organisations have the opportunity of getting grants starting from $8000 to $50,000.
Investment So far:
AWDF funds only local, national, sub-regional and regional organisations in Africa working towards women’s empowerment in six thematic areas: Women’s Human Rights, Economic Empowerment and Livelihoods, Governance, Peace and Security, Reproductive Health and Rights, HIV/AIDS, Arts, Culture and Sports.
In 2018, $6.8 M was granted to 75 women’s groups in 23 countries.
The organization has provided about $41.8 million grants since its establishment in 2001.
Founded in 1970, FMO is a Dutch development bank that provides funds to entrepreneurs, companies, and projects from developing and emerging markets. FMO is a public-private partnership. The Dutch government has 51% ownership stakes in the company while 49% stakes are held by commercial banks, trade unions and other private-sector representatives.
Investment So far
FMO has funded several projects across Africa. Its help come by way of equity, loans and guarantees; capital market transactions; mezzanine and other tailor-made solutions; and long-term and short-term project financing.
FMO provides support to sectors with the highest possibilities of long-term impact. These sectors include: Financial Institutions, Energy and Agribusiness, and Food & Water.
Investment AB Kinnevik is a Sweden-based company founded in 1936. It is one of the largest listed investment companies in Europe with total assets of over $7 billion.
Investment So far:
The firm’s investment in Africa include: Millicom, Tele2, Jumia, MTG, Konga,Bayport Financial Services, Rocket Internet, Iroko Partners and several others.
It is a leading investor in emerging markets like Africa.
Its primary areas of focus include entrepreneurs and businesses in the following business areas: Communications, Ecommerce & Marketplaces, Entertainment and Financial Services and others.
Every year, the Tony Elumelu Entrepreneurship Program (TEEP) selects 1,000 entrepreneurs from across Africa for a program of training, mentoring and funding.
The program was founded by Mr. Tony Elumelu, a Nigerian entrepreneur
Investments So Far:
The aim of the fund is that over a ten-year period, the 10,000 start-ups and young businesses selected from across Africa will create one million new jobs and add $10 billion in revenues to Africa’s economy.
The focus of the TEEP Fund is on the citizens and legal residents of all 54 African countries.
Any for-profit business based in Africa with a less than three years existence period is qualified to apply for the funds. This is however not limited to new business ideas.
All participants in the program receive a $5,000 seed investment in their business.
The focus of the African Development Foundation (ADF), an independent Federal agency of the United States government, is to support African-led development that build community enterprises by providing them with seed capital and technical support.
Investment So Far:
USADF helps organizations and businesses in Africa to create and sustain jobs, improve income levels, achieve greater food security, and address human development needs.
In 2014 alone, the USADF gave out 336 grants worth over $50 million and impacted over 1.3 million people in Africa.
The USADF beams its light on Small holder Farmers, youths, women and girls, and recovering communities.
It provides grants of up to $250,000 directly to hard-to-reach and under-served community enterprises that are ready to do their part.
Founded by Pierre Omidyar, the billionaire and founder of eBay in 2013, the Omidyar Network invests in both for-profit and non-profit organisations across the world.
Investment So Far:
The Network has invested over $1.46 billion in several ventures across Africa through grants and equity investments.
In 2009, the firm invested $1.8 million in Bridge International Academies, a for-profit company that runs a network of low-cost primary schools in East Africa.
The Network gave $400,000 to BudgIT, a start-up that gives Nigerian citizens access to, breakdown of and understanding of public budgets in 2014.
The Network collaborated with Echo Venture Capital, in 2015, to invest about $1.2 million in Hotels.ng, a Nigerian online hotels listing and booking startup.
The firm’s primary focus is on businesses and organisations with high social impact potential. It can fund or grant businesses up to $4 million.
The Switzerland-based Seedstars is a venture builder that organizes the annual Seedstars World competition, one of the biggest seed startup competitions for emerging markets.
Its activity spans 35+ countries around the world, whether in Africa, Asia, South America or the Middle East. It targets and invests in young startup businesses in these countries and regions.
Investment So Far:
Every year, participants from over 25 cities across Sub-Saharan Africa participate in a continental tour where they compete in local competitions.
A winner from each country gets invitation to attend the grand finale at the Seedstars Global Summit in Switzerland where they compete for up to $500,000 in equity investment and other multiple prizes.
Seedstars has invested $330,000 in SimplePay, a young Nigerian third-party payment processing company in 2014.
In 2016, Giraffe triumphed over 63 other startups from 55 countries to win the grand prize of $500,000 in equity investment funding. Giraffe is a South African company that makes low-cost automated recruitment solutions possible for South Africans.
The CDC is founded in 1948. The CDC is the UK’s Development Finance Institution (DFI) which is wholly owned by the UK Government’s Department for International Development (DFID). It has a history of making successful investments in businesses which have become industry leaders.
Investment So far:
CDC supports businesses throughout Africa and South Asia, and its portfolio of investments is valued at over £3.9 billion (£3.8 billion in 2016)
In November 2013, CDC announced a US$18.1m investment into Feronia, an agricultural production and processing business focused on palm oil plantations and arable farming in the Democratic Republic of Congo (DRC).
The CDC equity investments team aims to invest in established businesses with revenues of $10m+ and a track-record of profitability.
CDC considers start-ups or green-field projects only where there is a strong sponsor (individual or company) who will co-invest alongside CDC and has a strong track-record and delivery capability.
It focuses on: Infrastructure (especially power), Manufacturing, Health, Education, Food-processing and Construction.
Acumen is not looking for equity investments in businesses. It is a charity organisation incorporated in 2001 with seed capital from the Rockefeller Foundation, Cisco Systems Foundation and three individual philanthropists.
Investment So Far:
Acumen Fund invests in entrepreneurs who have the capability to bring sustainable solutions to big problems.
Acumen Fund invests in fearless entrepreneurs and early stage innovators tackling the problems of poverty .
To qualify for investment, entrepreneurs must be located in, or have significant operation or impact in East Africa, West Africa, India, Pakistan or Latin America.
The Fund has invested over $110 Million in breakthrough innovations in over 102 companies across 13 countries,
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.
