Photo from 2017 Africa Summit. Source: Africa Summit
Ghanaian technology entrepreneurs have called on African investors to look within the continent and channel much needed support to the local businesses that are solving the continent’s problems.
According to them, local investors need to see the vision and impact that start ups have and must invest at the early stage.
These revelations were made at the sidelines of the Africa 2018 Summit which took place in in Sharm El Sheikh, Egypt. The forum saw the launch of the Next 100 Startup initiative by President Abdel Fattah Al Sisi, which aims to select up to 100 promising entrepreneurs based in Africa and connect them with business leaders, international investors, financial institutions, and policymakers.
Ghana’s contingent consisted of 11 companies among which were Kudigo, Nokofio Ghana, Bloom impact, Agro innova LLC and more with facilitation from the International Finance Corporation (IFC), the World Bank Group’s arm in charge of private sector development.
Speaking to Citi Trends, CEO of Kudigo said, “most tech startups die prematurely and it is only with the right collaboration and deliberate effort that the situation can be salvaged. An africa-wide ecosystem approach is key for the growth of the continent where cross country connections will help spur growth. “
Kelvin Ashie of Agro Innova LLC however insisted, ”it is important that there needs to be shared understand of the investor language because though the trajectory we are travelling on is good in ghana with a good outlook for start ups, none of it will mean anything if we do not understand the language the investor is speaking.”
On his part, the CTO of Bloom impact, David Hutchful, held the opinion that there were not enough African investors who could “meet the demand of start ups and the ones that do exist are assessing the risk. What happens is that the investment levels offered do not match with the level of the need of the startups.”
Start-ups in Africa raised just $556 million from investors in 2017 (compared to $7 billion raised in India). The number of incubators and accelerators of start-ups has grown to more than 440 in 2018, compared to 314 two years ago, according to a just-released study by IFC. The study also found that five African cities — Accra, Cairo, Cape Town, Lagos, and Nairobi – attract 84 percent of the funds, even though they account for 22 percent of the continent’s startups. Start-ups in other cities are simply missing out in financing opportunities, according to the report.
David is thus off the option that, “more angel investors and more big ticket investors must be willing to meet the market where it is and where they can give smaller amounts without having to take over the start ups.”
“The summit was important for all parties to understand where their needs were and to understand how to tweak their companies to meet the needs of the investors without losing the core of their startups.”
One other startup at the summit was Wear Ghana and its cofounder, Ewurabena Agyeman, insisted that, “ it is not surprising (that African investors do not invest heavily in African startups) because underlying it is the same reason that African entrepreneurs have been trying to prove themselves for all these years.”
“We need to start believing in Africa and start believing that African entrepreneurs can build great companies. We need to prove that although we exist on a continent where the basic infrastructure that has been built in other economies do not exist, we can do better. We are forced to build the ecosystem that companies need to thrive but we must learn to tell our stories right. We must build the supply chain that other people do not have to spend their time doing.