Beacons of hope: The 2024 cohort of Ashoka Young Changemakers in Nigeria
In July last year, Eunice Omojola, a 20-year-old student at the University of Lagos, founded TechInEdu, an initiative that teaches practical computer skills in schools in marginalised communities. She hopes to help as many public school students to have practical ICT knowledge which she didn’t get when she was in their shoes. About 89% of young people in sub-Saharan Africa have no access to household computers. Public primary and secondary schools like the ones Omojola attended had no or inadequate computer labs. This forces teachers to limit ICT studies to steps and diagrams scribbled on dusty chalkboards. Eunice Omojola After she got admission into the university, Omojola joined a hub in Lagos where she met tech enthusiasts and quickly gained computer literacy. “The knowledge I got there was so profound. I wanted to take it back to public schools like mine where they do not have the amenities or resources to teach it,” Omojola told TechCabal on a call. Now, she is doing exactly that through TechinEdu. Omojola is one of several young people in the Ashoka Young Changemakers (AYC) community. AYC is a global network of people younger than 21 who lead a team of their peers to solve problems around them. AYC offers them tools, training, a supportive network and resources to scale their impact. Another such changemaker is Naomi Bamgbose, an 18-year-old who founded Girls Techie during her secondary school education. Much like Omojola, Bamgbose is solving a problem of exclusion from tech, but one based on gender. For her, it all started during the pandemic, a time when the internet made the world feel small and connected. That virtual shrinking of the world into a global village made her realise how big the gender gap is. Naomi Bamgbose “I was 15 at the time, participating in hackathons which grew popular during the pandemic,” Bamgbose said. She would reach out to online communities, inviting people to join her team and build apps or solve coding problems for a few hours. ”But one time when we had to form an all-girl team of 3-5 people, I and my friend (who is now my cofounder) could not find girls to join us.” Bamgbose, who was a front-end developer at the time and co-founder, a back-end developer, had to drop out of the hackathon as they could not find female product (UI/UX) designers. This experience has stayed with her. After some research, they found out the age-old fact about why there are limited girls in STEM. “We found out that a big reason that girls viewed themselves differently than boys. They feel that tech is for boys and that they were not smart enough to be good at it.” Her response was to create an organisation, Girl Techies to help girls change that perception of themselves and surmount the challenges of getting into tech: lack of mentorship, access to supportive communities and opportunities, and access to training. So far, they have hundreds of members across Africa. Bamgbose hopes to grow it to 5,000 communities soon and she thinks she will with the support of the Ashoka Young Changemakers community. Ashoka Young Changemakers Joining Omojola and Bamgbose in the 2024 Nigerian AYC cohort are seven other determined young individuals running impactful initiatives: Favour Effiom (19), founder of We Are Reality Foundation; Precious Damian (17), founder of The Rabah Initiative; Flourish Alonge (17), founder of Global Insight, a mental health initiative; Ashraf Maisikeli (18), founder of Inspire Change Foundation; Peter Adebowale (19), founder of ESD For Communities; Dawn Cobham (17), founder of Go Learners; and Saviour Iwezue (19), founder of Team Illuminate.
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Latest DSTV Uganda packages and prices in 2024
Selecting the right DSTV package for you can be a dilemma sometimes if you can’t determine what you’ll be getting for each and at what cost. This guide breaks down the different packages DSTV Uganda offers in 2024, helping you pick the one that perfectly fits your needs and budget. 1. Premium plan (UGX 290,000 per month) The Premium plan is the top tier, with over 170 channels, including 40 in High Definition (HD). It’s designed for you if you want no exceptions from all the entertainment DSTV may have to offer. This plan means you can watch the latest movies, binge award-winning shows, and catch every game with the complete sports offering on 16 SuperSport channels. Plus, you get Showmax streaming for free! 2. Compact Plus plan (UGX 170,000 per month) Die-hard sports fans will love the Compact Plus plan. Here your sentiments are well catered for because you’ll get to watch the Champions League, UFC, and NBA, with a good share of documentaries, international shows, and movies. 3. Compact plan (UGX 110,000 per month) The Compact plan offers a wider variety of entertainment. You can catch Premier League matches, international entertainment, dedicated kids’ and educational channels, top local and international news, and a 24/7 WWE wrestling channel. 4. Family plan (UGX 69,000 per month) The Family plan has over 110 channels, offering something for everyone. Watch lifestyle shows, documentaries, European football (La Liga and Serie A), and kids’ content. Adults can enjoy dramas and novellas. 5. Access DSTV Uganda plan (UGX 45,000 per month) For those on a budget, the Access plan provides a good selection of movies, glimpses of top European football on SuperSport Football, kids’ channels, and local and international music. 6. Lumba DSTV Uganda plan (UGX 16,000 per month) The Lumba plan is a great introduction to DSTV. This budget-friendly option offers all the popular Ugandan local channels for a taste of homegrown content. Watch shows on Pearl Magic, catch exciting football on SuperSport Football, and keep kids entertained with Nickelodeon. Final thoughts on DSTV packages in Uganda 2024 DSTV packages in Uganda have something for everyone. Consider your budget, what you like to watch, and which channels are important to you, and you’ll easily select from the options.
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LAUTECH Post-UTME screening 2024/2025
Ladoke Akintola University of Technology (LAUTECH) screening 2024 will be underway soon. Here, we show you, in detail, what to expect through the process: The Lautech screening basics Lautech screening has had established minimum requirements over recent years. See the following: First, you’ll need a score of at least 180 in your most recent UTME exam. This demonstrates a baseline academic ability. You’ll also need a minimum of five credit passes in relevant subjects from your SSCE, NECO, or NABTEB results, achieved in no more than two sittings. Another point to note is that, as part of the screening process, LAUTECH will combine your UTME score with your O’Level results to determine the final cut-off mark for your chosen program. So, strong performance in both areas is crucial for securing a spot at LAUTECH. Credentials to prepare for the 2024/2025 Lautech screening For a smooth Lautech screening experience, ensure Your UTME O’Level results are uploaded on the JAMB CAPS portal. This applies exclusively to UTME candidates. Direct Entry applicants have a different route. They must obtain their application forms directly from JAMB and possess a minimum of Upper Credit alongside the five credit passes in their SSCE, NECO, or NABTEB results. Passing through the online application LAUTECH screening over the years has embraced a fully online approach. So once the process is announced: Head over to the LAUTECH admission portal to submit your application. There, you’ll need to pay a registration fee of about ₦2,3000. Be prepared to upload a recent digital passport photograph with a clean white background. Providing a valid email address and phone number is important for staying informed throughout the Lautech screening 2024 process. Final thoughts on LAUTECH post-UTME screening 2024/2025 Please note that variables such as screening costs and cut off marks may vary when the University eventually announces its screening process for the year. Nevertheless, keen attention to the steps provided here will help you in registering for the forthcoming LAUTECH post-UTME screening 2024.
Read MoreWracked by fraud, fintechs and banks must work together or fall
Despite a decline in fraud incidents in Q1 2024, financial industry players agree fraud is an existential challenge. Traditional banks and fintechs have historically fought fraud through internal controls, strengthening security infrastructure, and having adequate information on customers (KYC processes). Banks also share information among themselves, helping them identify and restrict the accounts of bad actors pending investigation. Fintechs have tried to replicate this information sharing but have failed. In March 2023, fintechs, led by Flutterwave, began talks to create a fraud database, codenamed Project Radar, to share data on individuals and groups that had attempted or made fraudulent transactions. But the fintechs, hawkish about their data and ultracompetitive, did not make much progress with those talks. Another industry collaboration to fight PoS fraud, a popular channel for bad actors is still in its early days. However, a decision mandating mobile banking agents to register with the Corporate Affairs Commission (CAC) is expected to increase transparency. If financial institutions are learning to fly without perching, bad actors are learning to shoot without missing. The consensus is that an industry-wide response is required. “It goes back to KYC and customer due diligence,” said Adedeji Olowe, founder of Lendsqr, a lending-as-a-service startup. “There is literally nothing new anyone is supposed to do.” Section 7(2)(b) of the CBN Customer Due Diligence Regulations 2023 mandates financial institutions to physically verify the residential address of customers. Until recently, only traditional banks have followed this directive. The CBN began mandating fintechs to follow the same rules in May. Nigerian fintech startups could spend over $1 million on KYC address verification Those KYC processes, which are now being tightened and applied across board, are at the heart of a dispute between banks and fintechs. In April, Wema Bank removed seven fintech partners from its payment gateway platform over fraudulent activities after reporting ₦685 million ($594,943) in fraud and forgery losses in 2023. Fidelity Bank also briefly blocked some neobanks over fraud concerns in 2023, although such heavy-handed measures are likely frowned on by the regulator. Nevertheless, banks and fintechs must sheathe their swords and collaborate to fight fraud. One such strategy in that fight is data sharing. “I think the ecosystem is ripe for a central repository where everybody can share data. Just the way the banks themselves came up with BVN before the regulator stepped in. The entire financial industry needs something similar to tackle fraud,” said Lanre Ogungbe, co-founder of Identitypass, a Nigerian identity verification company. Data sharing has been discussed since at least 2018, possibly earlier, with little to show for it. The growing complexity of fraud has made it more important than ever. Financial Institutions (FIs) are part of the Nigeria Electronic Fraud Forum (NEFF), a CBN initiative where they report fraud incidents and provide relevant information on the nature of the fraud, but data sharing isn’t part of the arrangement. The argument for a central repository is that banks and fintechs can share data on customers who trigger fraud flags and make that data accessible to all participants. One industry insider narrated how a former employee of a traditional bank sacked for fraud got hired by a fintech startup six months later. “Everyone must come together to fight fraud because it’s really becoming a pandemic,” said Segun Aina, President Fintech Association of Nigeria (FintechNGR), an industry lobby group. Yet, quite a few people are skeptical about any collaboration. “I don’t see collaboration happening because there is this aversion to sharing data. If every stakeholder is doing what they are supposed to do, fighting fraud will be much easier,” Olowe said. Aina said FintechNGR is developing a black book where fintechs can drop details of bank accounts that have been involved in fraud to blacklist transactions from such accounts. Taking fraud more seriously will also include setting fraud desks and timely disclosure of fraud incidents, Damilola Adeyi, a fraud expert told TechCabal. “A lot of financial institutions don’t see fraud as an integral part of their operations. You can’t eradicate fraud but you can mitigate it,” he said. In 2015, the CBN mandated all deposit money banks, mobile money operators, switches, and all payment service providers to establish a fraud desk to receive and respond promptly to fraud alerts. But most fintechs are non-compliant because the CBN has failed to enforce the directive, one industry insider claimed. An executive at Moniepoint confirmed the company has a fraud desk that handles transaction monitoring and behavioral analysis, fraud detection and reporting, and investigation with law enforcement agencies. Yet, financial institutions are paranoid about fraud reporting and believe disclosures could cost them customer trust. At least 63% of the financial institutions profiled in a recent fraud report by the Nigeria Inter-Bank Settlement System (NIBSS), the national payment switch, failed to report fraud cases, a violation of a CBN directive. There is equally a need to strengthen the security systems of financial institutions. In the First Bank incident, the fraud went undetected for two years, raising questions about the bank’s internal control. A lack of an effective internal control system is the major cause of bank fraud, according to research. A 2022 KPMG Nigeria study found that only 30% of local banks have fully implemented KYC and anti-fraud measures. “The CBN must take its audit more seriously and do spot checks to see that Information Security Management System (ISMS) is being adhered to in all the banks,” said one fraud expert who asked not to be named.
Read MoreCopia Global seeks fresh funding after this week’s layoffs
Copia Global, the Kenyan B2C e-commerce startup that entered administration on May 24, is still a going concern despite layoffs that affected 1,060 employees on Thursday. Administrators told employees in termination letters on Friday that they aim to continue the business and cut operational costs as the new leadership seeks to raise new capital. Copia appointed Makenzi Muthusi and Julius Ngonga of KPMG as joint administrators on May 24. “We must ensure the business is right sized and right shaped to meet the new digital business opportunity and position the business for profitable growth. To maximize the potential for Copia to succeed long term, it is necessary to make some difficult decisions regarding its current operations,” said Makenzi Muthusi, Copia’s joint administrator, in a termination letter seen by TechCabal. “Unfortunately, your employment with Copia Kenya Limited (under administration) will be terminated, effective 7th June 2024. This decision is in no way a reflection of your performance or contributions to the company but rather a consequence of the current circumstances.” Copia told the employees the company would inform them about potential employment opportunities, signaling the administrator’s commitment to turning around the ailing e-commerce giant. However, it remains to be seen how the new management will convince new investors to inject new capital after similar efforts to save the company collapsed in early May. The layoffs follow the company’s decision on June 4 to stop taking orders from Central and Eastern Kenya, an indication that the administrators are rolling back operations to arrest cashflow challenges. Copia Global was founded by Tracey Turner and Jonathan Lewis in 2013 to allow retailers in rural and peri-urban areas to restock essential goods using USSD or a mobile app. It received $123 million in venture capital funding, joining a growing list of firms that have received investors’ goodwill but have struggled to turn on profit.
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👨🏿🚀TechCabal Daily – How much will KYC cost?
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning In Nigeria, food inflation has gotten so bad, its poorest citizens are resorting to buying slices of yam while its political elite continue to fight for their slice of the national cake. About 30 state governors spent $600 million in three months on refreshments—about enough money to buy bags of rice for 11 million Nigerians who cannot afford it. Here’s a chart from The Big Daily that really puts inflation into perspective. If you’d like to get more interesting insights on the Nigerian economy, The Big Daily is where you should be looking. In today’s edition Copia Global lays off 1,060 employees Africa receives only 2% of global clean energy investment KYC requirements to cost Fintechs over $1 million Funding tracker The World Wide Web3 Opportunities Layoffs Copia Global lays off 1,060 employees There are big questions over the future of Kenyan e-commerce startup Copia Global. Citing uncertainties, it considered options like large-scale layoffs or even shutting down entirely in May. Two weeks ago, Copia entered into administration and now, will be having conversations about its future. Today June 7, at least 1,060 of its staff employment will be terminated. In a short meeting, CEO Tim Steel, alongside the newly appointed administrators, told the remaining staff they were required to return company property like laptops and tablets today. Additionally, they were asked to sign termination letters today, officially ending their employment in Copia. The company has agreed to pay a one-month severance package to its laid-off staff, including unpaid leave days as required by Kenyan labour law. But a major snag remains: no one knows when they will actually get the money. This lack of transparency is understandably causing anxiety, especially considering the recent delay in May salaries, which employees just got this week. Per a TechCabal report, two Copia employees have refused to sign their termination letters until a clear payment schedule is established. Just last Tuesday, Copia halted taking orders in six towns including Naivasha, Machakos, Meru, Embu, Kericho, and Eldoret and the staff in these areas were also reportedly sent on leave. Echoing Kenn Abuya’s article where he noted signs of strain despite Copia’s claims of “cracking the nut of last-mile delivery”, the once well-funded company now struggles to stay afloat. Moniepoint is Africa’s fastest-growing fintech The Financial Times has ranked Moniepoint as Africa’s fastest-growing fintech based on its absolute and compound growth rate. Read more about it here. Funding Africa receives only 2% of global clean energy investment despite huge energy gap Global investment in clean energy is projected to hit a whopping $2 trillion this year—double the amount being invested into fossil fuels. While this is a major win for Mother Earth, a new report by the International Energy Association (IEA) found a bit of a bummer situation for Africa. The continent will receive only 2% of this amount, a mere $40 billion. This allocation stands in stark contrast to Africa’s immense energy needs as over 600 million people lack access to electricity, and around 1 billion struggle without clean cooking fuels. While 83% of the global population lacking electricity reside in Africa, the World Bank and AfDB are aiming to cut that number in half by 2030. Their combined plan, estimated at $30 billion, will see the World Bank provide access to electricity to 250 million people, while the Africa Development Bank Group (AfDB) focuses on reaching 50 million. The total amount of money expected to be invested in African energy in 2024 is around $110 billion (USD). Seventy billion will go towards traditional fossil fuels, while the remaining $40 billion will be used for cleaner energy sources. China is expected to receive the largest investment in clean energy in 2024 with an estimated $675 billion, while Europe is set to account for $370 billion and the United States $315 billion Africa currently lags behind the global average in energy investment. While the worldwide share of GDP dedicated to energy sits at 1.8%, African nations allocate only 1.2% of their GDP to this sector. This shortfall is further compounded by a significant funding gap. The IEA new report estimates that Africa requires a yearly investment of $200 billion by 2030 to reach its energy and climate objectives. Unfortunately, the current reality falls far short, with only $25 billion secured annually. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Fintech KYC requirements to cost Fintechs over $1million On Monday, June 3, Nigeria’s central bank lifted its six-week-long ban on customer onboarding by Nigeria’s top fintechs—Paga, OPay, Kuda, Palmpay, and Moniepoint. Before the suspension of the ban, the apex bank, on May 20, 2024, shared a list of requirements for these fintechs to continue customer onboarding which include blocking peer-to-peer (P2P) crypto transfers and mandating physical address verification for customers of all tiers of accounts and POS agents who offer agency banking services. With well over 1.5 million POS agents combined, these fintechs could be spending as much as $1 million to verify their physical addresses. Muktar writes all about it here. What were the most popular payment channels on Paystack in 2023? Find the answer here paystack.com/2023 TC Insights Funding tracker This week, Moroccan agritech startup YoLa Fresh secured a $7 million pre-Series A funding round. The round was led by Al Mada Ventures, with participation from Algebra Ventures, E3 Capital, Janngo Capital, and FMO, the Dutch entrepreneurial development bank. Here’s the other deal for the week: Egypt-based prop-tech Birdnest closed an undisclosed round of pre-Series A funding from investors, including Beltone Venture Capital and CI Venture Capital. Zambian e-commerce startup Bosso raised $400,000 in a pre-seed round. Investors include Leonard by Vinci, Launch Africa
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Nigerian fintech startups could spend over $1 million on KYC address verification
Following important changes to Know Your Customer processes by the Central Bank, fintech startups must now physically verify the addresses of POS agents (if they offer agency banking services) and all other customers. While the startups will not grumble over the requirements—it was a condition for lifting a six-week freeze on new customer onboarding—several executives spoke about how expensive the process will be. To physically verify POS agents, for instance, these startups could pay up to ₦1000 ($0.40) for each agent verified. Those costs could balloon quickly for prominent startups that boast hundreds of thousands of agents. Per publicly available figures for its number of registered agents, OPay could pay at least ₦563 million ($376,000), while PalmPay’s bill could be in the region of ₦500 million ($333,883), and Moniepoint would have to fork out ₦304 million ($196,000). It could cost the fintech industry ₦1.5 billion ($1 million) to verify 1.5 million POS agents. Those figures could eventually be higher considering that several fintech executives declined to specify the amounts they pay the verifiers. Additionally, as many PoS agents work for several fintech startups, there’s also the possibility that the total bill could be a lot lower. Whatever the final bill is, it will not include the cost of verifying retail customers which would eclipse the cost for POS agents as self-reported numbers for these fintechs exceed ten million. Fintechs like Moniepoint, Opay, and Palmpay, with an extensive network of agents, could use agent managers to verify the addresses of retail customers. While this approach might be cost-effective as the managers—scattered all over Nigeria—are already on these fintech books, they would still need to be paid extra. Physical address verification for agents and retail customers is an important part of increasing transparency and reducing the lack of visibility that bad actors exploit. POS fraud contributed 8.8% to the total amount lost to fraud in the fourth quarter of 2023, according to the Financial Institutions Training Centre (FITC), a financial research and advocacy organisation operated by the Central Bank of Nigeria. For fintechs like Kuda and Paga that do not run extensive cash-in and cash-out operations, identity management startups will likely help with address verification. While it is difficult to verify the prices of these services due to confidentiality, it would still represent a significant burden for these fintechs. On April 29, Nigeria’s Central Bank ordered a freeze on new customer onboarding after concerns that lax KYC was giving bad actors joy. Physical address verification will also help authorities have more visibility over peer-to-peer crypto transactions, which it argues is a key component of currency manipulation. The regulators will point to NIBSS’ Q1 2024 fraud report which showed a decline in incidents and amounts lost, but it’s still early days. Beyond the monetary cost of address verification, Nigeria has also missed a six-week window to increase financial inclusion as these fintechs have become synonymous with introducing banking to areas with low bank and ATM penetration. According to an industry report, technology contributed heavily to an 8% jump in formal inclusion in three years. POS agents have quickly become the backbone of financial inclusion in Nigeria. Image Source: The NigerianFinancial ServicesMarket Report by Intelpoint In 2023, OPay claimed to start the year with 19 million accounts and according to a regulatory filing by Opera, an early OPay investor, the fintech quadrupled its user base (76 million). Based on that filing, fintech averaged 1.1 million new users weekly and the onboarding freeze would have cost the company at least 6 million new users. While OPay is the market leader, Moniepoint and Palmpay follow closely and are growing rapidly, according to an industry expert who asked not to be named.
Read MoreKenyan e-commerce startup Copia Global lays off 1,060 employees
Copia layoffs will raise questions about the company’s future two weeks after it entered into administration. Two weeks after an internal memo showed that the B2C e-commerce platform was struggling to make payroll, Copia Global has laid off at least 1,060 employees, suggesting the company may be on the brink of a shutdown or massively scaling back operations. In a 20-minute meeting with staff on Thursday, Copia CEO Tim Steel and administrators appointed last week to take over the company asked employees to return company property, including laptops and tablets, and sign their termination letters on Friday, June 7th. CEO Tim Steel declined to comment but promised to share new information on Friday. Although Copia has agreed to pay a one-month salary and other benefits like accrued unpaid leave days by Kenyan labour laws, administrators have not yet specified a timeframe for these payments. This lack of clarity has caused concern among employees, considering the recent delay in May salaries, which were only paid this week. Two employees told TechCabal they would not sign their termination letters until Copia clarifies the payment schedule for their compensation and benefits. An ex-employee claimed Copia started facing business difficulties in 2022. The financial constraints forced the company to scale back operations, including exiting Uganda barely two years after launching and laying off 700 employees. On Tuesday, Copia stopped taking orders from six key locations in Kenya, including Embu and Eldoret, likely to cut its already squeezed expenditure. It had asked employees working in the affected markets to take leave. At its peak, Copia had a 50,000-agent network serving rural Kenya. On May 16, in a leaked internal memo, Copia warned employees that the company could either fold up or restructure its business by laying off 1060 employees.
Read MoreUnveiling the startup illusion: Critical questions every policymaker must answer
This article was contributed to TechCabal by Salma Baghdadi. In an era where talk of Startup Acts, Innovation Bills, and the emergence of new tech hubs saturates political discourse, it’s crucial to scrutinise the readiness of nations to foster a conducive environment for startups. The allure of becoming the next Silicon Valley in Africa or elsewhere may seem enticing for politicians eager to garner support, but the reality is far more complex. Policymakers must embark on a critical self-assessment journey before delving into the arduous task of drafting and passing legislation to nurture startup ecosystems. Here are some tough questions they must grapple with: Vision and Objectives: What exactly does it mean for a country to aspire to build a tech ecosystem or transition to a digitised economy? Without a clear vision and defined objectives, efforts to support startups may lack direction and coherence. Infrastructure Readiness: Is the country’s tech infrastructure up to par? Are internet access and mobile connectivity widespread and affordable? Without adequate infrastructure, startups will struggle to thrive in an increasingly digital world. Economic Policy: Does the country truly encourage and support private initiatives, or are bureaucratic hurdles and government intervention hindering entrepreneurship? An open and stable regulatory environment is essential for fostering innovation and growth. Administrative Management and Processes: How easy is it to start a business in the country? How easy is it to raise and invest funds? Are administrative processes transparent and free from corruption? Excessive red tape and regulatory ambiguity can stifle entrepreneurial endeavours. Political Stability: To what extent do political movements and instability threaten long-term visions for fostering tech entrepreneurship? Political will and continuity are vital for sustaining efforts to support startups amid shifting political landscapes. Pipeline: Does the country produce enough skilled engineers and entrepreneurs capable of driving innovation? If not, what steps can be taken to attract foreign talent and leverage the diaspora community? Research & Labs: How vibrant is the country’s research ecosystem? Are research findings being translated into practical solutions and commercialised? Investment in research and innovation is crucial for fueling startup growth. Economic Weave (Private Sector): What is the landscape of the private sector, and how actively are big corporations engaging with startups? Collaboration between established players and startups is essential for ecosystem maturity. Entrepreneurship Culture: Is there a culture of entrepreneurship, or are traditional sectors dominating the economy? Cultivating a mindset conducive to innovation is essential for nurturing a vibrant startup ecosystem. Answering these questions requires more than a simple yes or no; it demands a comprehensive assessment and a commitment to addressing gaps and challenges. While every country may aspire to become a digital hub, the reality is that many emerging markets lack the political vision and economic infrastructure necessary to support such ambitions. Building a startup nation requires more than just rhetoric and promises; it demands tangible action and investment in the right assets: technical infrastructure, political stability, administrative efficiency, and talent development. Only then can countries truly harness the potential of their digital-native population and emerge as global leaders in innovation and entrepreneurship. The journey towards building a startup nation is fraught with challenges and complexities that cannot be solved through legislative measures alone. Passing laws without concurrently investing in infrastructure and addressing systemic issues may lead to disillusionment among entrepreneurs and the public alike. Furthermore, such actions could undermine future initiatives aimed at fostering an entrepreneurial ecosystem, perpetuating a cycle of unmet promises and missed opportunities. Therefore, policymakers must prioritise a holistic approach that encompasses infrastructure development, administrative efficiency, talent cultivation, and a supportive regulatory environment. Only then can countries truly achieve their aspirations of becoming global players in innovation and entrepreneurship. — Salma is a startup enthusiast currently working with Startup Tunisia to foster the startup ecosystem in the country. A former entrepreneur in Tunisia and France with two tech startups, she has also worked with an international media holding and consulting firm in Paris.
Read MoreHow can Africa create more angel investors?
This article was contributed to TechCabal by Rossie E. Turman III, Deangeor Chin, and Waleey Fatai of Lowenstein Sandler, Africa Practice. Startup funding in Africa increased steadily from 2016 until the pinnacle in 2022. After that, deal volume and deal size decreased significantly. Although the funding picture in Africa was consistent with the global downward VC funding trend, the currency volatility and high inflation in Africa have prompted investors to prioritise “safer investments;” i.e. companies with established track records and/or a US base over African startups, leaving many emerging Africa companies without the capital needed to grow. Despite the venture capital funding market recoil, early-stage founders in Africa still have options when looking for capital to operate and grow their businesses, including Africa-based incubators, venture debt loans, friends and family rounds, family offices, and angel investing. In this article, we will focus on angel investing, and discuss our views on ways to increase angel investing in Africa’s venture ecosystem on a macro-level— while also dispelling some myths about angel investing on the continent. What is angel investing? Angel investment is funding made by an individual to a promising startup with high growth in exchange for a piece of the business, often in the form of equity ownership or royalty payments. Although many angel investors are high-net-worth individuals, angel investors may or may not be accredited investors. They are commonly business professionals, C-level company executives, or successful small business owners who have already launched successful companies and typically prefer to invest in the very early stages of a company. Angel investing differs from venture capital in a few ways: Venture capital funds are run by managers who invest other people’s money, in addition to their own dollars, while angel investors invest their own funds. Venture capital funds most often want proof of concept before investing, while angel investors are more likely to invest in the ideation phase of a company. Venture capitalists will often want a board seat and other operational involvement in the company, while angel investors may provide advice and counsel but do not typically require operational control. Becoming an angel investor in Africa: How to do it? For those looking to become angel investors in African emerging companies, here are a few ways to get started: Get smart about the potential investment. Having a strong educational foundation and knowledge base about Africa, including the specific regions and industries where a blossoming angel investor may intend to invest, can improve one’s ability to navigate the business of early-stage investing. This entails staying abreast of emerging trends, recent funding transactions and key terms, recent company exits, and current market dynamics to strategically evaluate startups with worthwhile proposals. Successful investors make trips and spend time on the continent, developing relationships with people and monitoring progress. Develop relationships. For new angels, joining angel networks focused on the regions, countries, or industries (i.e. tech or agriculture) in which they intend to invest. Meeting with like-minded investors provides diversified insight into evaluating companies and allows for sharing the considerable due diligence work that large investments require. Further, angel networks have visibility and access to more deals to which most individual investors would not customarily be privy; by joining an angel group, a new investor can vastly expand or diversify their options for investment. Dispelling Myths: Africa Angel Investing With the recent drop in Africa’s venture capital funding, angel investing is particularly valuable to the continent’s ecosystem. Below we dispel a few myths about angel investing in Africa. “I cannot be an angel investor because I am not rich.” Angel investors do not have to be high-net-worth individuals; investing in Africa does not necessarily require substantial wealth. Africa offers investment opportunities across different sectors such as agriculture, technology, renewable energy, and real estate. These opportunities come with different capital requirements, many of which are accessible to less wealthy investors. There are many investor groups and angel networks focused on African startups that allow individuals with all levels of assets to pool funds and invest in growing companies. “Investing in Africa is only for impact (not financial returns).” While it is true that funding Africa’s venture ecosystem has a positive effect on the related communities in Africa through such benefits as job creation, economic growth, and social development, it is also true that investments in emerging African companies can be extremely profitable. Some examples include Lagos’ startup Paystack and Kenya’s Sendwave. “I can’t invest in Africa because I do not live on the continent.” Approximately 140 million Africans live abroad. With its growing population and accumulated savings, this African diaspora represents a significant potential source of investment for the continent. This group’s deep understanding of both African and global markets positions them uniquely to bridge gaps and foster economic growth. The African Development Bank (AfDB) also recognises the critical role of the diaspora in investing in Africa. The continent’s lack of financial capacity to build new infrastructure underscores the necessity of attracting investors, particularly those from the diaspora. The diaspora’s investment can contribute significantly to the continent’s structural change and development in several ways: Bridging and building: By leveraging their unique position, the diaspora can build trust and understanding between African startups and global markets. Pooling resources: Diaspora funds and syndicates can amplify the impact of investments. Mentorship: With global exposure, the diaspora can mentor African entrepreneurs, sharing insights and business best practices. Policy advocacy: The diaspora can influence government and corporate policies to create a more favourable investment climate. Utilising remittances: A diaspora-ed macro channelling a portion of remittances into startup investments offers a large, novel. and consistent source of funding. Conclusion Angel investing offers rich opportunities for both founders and investors to reap ample benefits, as well as make significant and positive impacts on the continent’s economic development. More important than the level or value of investment is the willingness of all parties to conduct research, develop relationships, and collaborate with other innovators throughout the startup economy.
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