African tech startups raise $1 million in crowdfunding effort
Africa is the most exciting place in the world these days for tech entrepreneurship.
For proof, look no further than the the VC4Africa blog, which covers Africa’s exploding tech startup scene, and its parent organization, Venture Capital for Africa, which raises investment funds for some of the continent’s most promising early-stage startups.
VC4Africa’s mission is “crowdsourcing a startup movement across Africa.” The movement was there, capital both from within and without the continent was there, and coming now in greater and greater gouts, but the crowdsourcing was not. VC4Africa and a small handful of other groups, such as HumanIPO, are seeking to fill the gap, with increasing success.
The one-year-old organization has so far raised over $1 million in direct investment for early-stage startups on the continent, targeting the underserved sector of companies with less than a million-dollar valuation.
A matchmaking service, uniting African entrepreneurs and their companies with individuals interested in investing in them, today announced its 10,000th member. It has also reached 1,000 African enterprise members.
The service vets qualified investors and credible startups before admitting them to the community, adds a social element in profiles and interactivity, and provides “self-help tools, business modeling workshops, and member hosted networking opportunities,” in addition to structured mentoring programs.
There’s a lot of money at play, too. As Wired so crassly put it, “Want to become an Internet billionaire? Move to Africa.”
But if your goal is some good old-fashioned neo-colonial resource-extraction-style investment, think again. Africans by and large have learned from their previous relationships with non-Africans and, as a group—especially as a plugged-in group—its entrepreneurs seem unwilling to sell out their long-term interests for short-term gain. One relationship will stand in for many in this respect.
The South Korean corporation Samsung partnered with the iLab at Nairobi, Kenya’s Strathmore University, funding a wing of the tech research institute. But instead of “owning” the work of the students and faculty they are funding, they get first-look opportunities to license the tech. The ownership of the IP remains with the creators.
This is the new context for investment in Africa, and the sense of independence and control is not incidental to the burgeoning tech industry on the continent. When you are motivated by a sense of pride and ownership, you tend to give it your all. The resulting quality and market have inspired VC4Africa’s investors to risk minimum investments of $10,000 on the network’s entrepreneurs.
That boomtown, smash-and-grab attitude is one of the reasons the founders wanted to build face-to-face relationships between its members before diving into funding, co-founder Ben White told the Daily Dot.
“We don't think people should be leaning back in their chairs and investing through a computer screen,” said White. “VC4Africa might be a virtual platform, but its a community that consists of real people who often meet in person.”
They have hosted meetups in 40 cities, in Africa and elsewhere.
But White believes that the investing climate in African tech has already matured to the point where the ability to sweep in and “invest” the crap out of a place like an early 20th century bauxite tycoon is starting to change.
“If you have the foresight to get on a plane and go to Bujumbura with the intention to invest today,” admits White, “you will be able to meet the country’s top entrepreneurs. Capital is limited and this means early investors might have an advantage setting the terms. This can be seen as unfair advantage.”
However, as any market matures, the increased competition starts to level the playing field.
“I think many (African) markets are actually starting to move into this next stage of development and we see things starting to settle,” he said. “Local investors increase their participation over time and a healthy ecosystem starts to emerge as a result.”
In the final analysis, however, “the ecosystem and the agenda has to be driven by entrepreneurs” and they are thick on the ground in Africa.
As those who were in San Francisco in the mid-nineties know, there is no place so exciting as ground zero of an explosion in intellectual capital. Africa, with a population of 1 billion people, 50 percent of whom are under 30, connected as never before to the global community and with tools to build with that many more people can afford, is in the midst of a renaissance that could make the Bay Area’s last-century heyday seem like a footnote.
VC4Africa’s story is interesting. But it’s one story among millions whose first chapters are only now being written. VC4Africa is a keyhole through which, if you put your eye right up to it, you might be able to see the next century spread out across the continent’s savannas, forests and coasts.
Photos by Venture Capital for Africa