As global economies rebound from the COVID-19 shock, things are looking up for African startup founders, an April 2022 report by African Private Equity and Venture Capital Association shows.
A record-breaking USD5.2 billion was raised in 2021 by African firms – a majority going to tech-backed innovations on the continent, with data showing growth in volume and value of investment deals.
“African tech took center stage in 2021: 81% of VC deals in 2021 were in technology or technology-enabled companies operating across a variety of sectors. 16 super-sized deals (with a combined value of US$2.6 billion) took place in 2021, raised from 15 unique companies,” read the report, which cited figures from 604 companies across the continent.
Things are only looking up, as Q1 2022 data shows a strong start to the year for startups, with TechCrunch noting that there are ‘no signs of a slowdown in Africa’s tech funding.’ While this is good news for the startup ecosystem, a closer look shows that only a small percentage of African firms have access to this funding, GetEquity CEO Jude Dįke points out.
“We are excited to see sustained interest from big-ticket investors, and we see this as an affirmation of the potential that homegrown solutions have in solving the real-world problems consumers and companies face. Having worked in the African startup ecosystem, we also recognise that these opportunities are not accessible to many new firms – especially those in the pre-seed funding stage,” he explains, adding that lack of access to funding is a key impediment to promising startups.
Democratizing access to the startup funding
While on one hand companies struggle to access much-need capital for growth, local and individual investors also face challenges in finding early investment opportunities – a need that GetEquity is intent on addressing.
“We are democratizing access to the startup funding space – both for investors seeking to grow their money in companies with a high growth potential, and for startups seeking to raise capital to accelerate business growth. Our private marketplace is open to individual and institutional investors alike, and we have ensured this accessibility by making sure that one can back startups for even as little as USD10 (Ksh1160),” he adds.
Founded in Nigeria in 2020, GetEquity is a private marketplace for investors and companies to trade digital securities and assets privately and securely. The platform allows companies or enterprises to digitalize their assets via tokens, and creates liquidity for them by connecting them to investors and syndicates who can buy and sell these assets. Firms seeking early-stage funding apply to be listed on the platform, undergo rigorous vetting processes, after which they are eligible for investment on the platform.
Early stage startup support
While conducting an East Africa market engagement in April, GetEquity Director of Growth and co-founder Temitope Ekundayo underscored the importance of connecting directly with founders, saying the company is committed to maintaining its hands-on startup support approach as they expand in the region.
Speaking to startups at a Nairobi Garage fireside chat, he pointed out that while most venture capitalist firms focus on firms at advanced growth stages, his team is committed to also offering budding firms the support they need to develop and scale.
“Early stage support involves a bit of handholding, and fortunately, we have a lot of startup superstars on our team – people who have started companies and scaled them, so they have practical insight into the real challenges founders face. So to support our partners we check in on them monthly, and assist them in problem-solving using the insights they share with us,” said Mr Ekundayo.
Speaking in Nairobi on a panel discussion about startup access to funding, he stated that while GetEquity’s main aim is to help African startups access funding, they also provide advice to the companies they list.
“Recently, one company in our portfolio was looking for a senior salesperson for their team. Within my network, in just one day, I was able to source 20 good high-level CVs for people I know and trust will get the job done. From there it was up to him to recruit the most suitable candidate. At the end of the day, our job is to provide support, funding opportunities, and advice. In the end, it is up to the companies to drive the business,” he added.
East Africa Growth Lead Eve Mumbi adds that providing knowledge-sharing opportunities is high on GetEquity’s agenda as they make expansion plans in the market.
“Businesses do not exist in a vacuum, therefore having first-hand knowledge of market realities within the East African context is crucial for companies targeting exponential growth. As we expand our network within the region, we are investing personnel, research and knowledge sharing opportunities for our founders. These efforts are aimed at ensuring that even as we help organizations get equity to escalate their growth, they have additional insights to make the best of it. So far, we have on-boarded MyWagePay and Zemo Card and as we continue with our market visits within the region, we look forward to onboarding more partners in the next few months,” Mumbi said.
The company will be kicking off a series of Masterclasses and funding round-tables in the second half of 2022, as well as market visits across Kenya, Uganda, Rwanda, Ethiopia, and Tanzania.