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Traditional models for investing in early-stage businesses do not work in Africa, and investors need to rethink how they do things when backing startups on the continent.

That is according to panellists discussing investing in African startups at the recent startup-dedicated AHUB event held at the AfricaCom conference in Cape Town, who said models for investing on the continent needed to be different from elsewhere in the world.

Zachariah George, co-founder and chief investment officer at Startupbootcamp AfriTech, said many investors that are new to Africa think from a private equity perspective, which is not relevant.

“There is method in the madness of how you do early stage VC in Africa,” he said. “You have to go out and meet people. You have to go all over the place and meet entrepreneurs, and see what they are doing. It is a hard, grind in, grind out industry. This is not Silicon Valley, it is not New York.”

Sharron McPherson, co-founder of the Centre for Disruptive Technologies, agreed models that have worked in places like Silicon Valley were not right for Africa.

“Silicon Valley is a valley in the US, not everything that is done there is right for Africa. Often what we are doing is looking for unicorns, and other entities are not able to access capital,” she said.

“We are looking at leveraging new approaches to what is right in Africa. I don’t think we have got the language right yet and I don’t think we have got the business models right. It’s is definitely not private equity, and VC needs some tweaking here.”

Getting distracted by discussions around unicorns was also something Eric Osiakwan, managing partner of Chanzo Capital, cautioned against, saying there were excellent entrepreneurs across the continent building exciting business that, even if they are unlikely to become unicorns, should still be very appealing to investors.

“I get excited by the entrepreneur. There are entrepreneurs out there that are able to build amazing businesses. It’s great to build unicorns, but there are entrepreneurs in Africa with no access to capital that are able to build great businesses,” he said.

“The most successful companies in the world build great products that people can use and pay for. If you are invested in this in the long term this needs to be your motivation.”

So what should investors be looking for when it comes to African tech startups? George said it was very important to look at what the passion of founders, and their route to market, which he said was the reason why startups grow or fail. He also urged African entrepreneurs to solve truly African problems.

“There are so many developing world problems that are not tackled in the US, or Canada, or Western Europe. Let’s stop focusing on nice to have “vitamins”, let’s build some “aspirins”. We have some people that are talking about social impact, and some about VC. It is the same conversation. Every business in Africa is social impact,” he said.

Ben White, founder and CEO of VC4A, agreed with this.

“We are talking about transformational entrepreneurs who are using tech because of its transformational power. All of these companies are impacting change across all aspects of society. It is about business, and it is about social change at the same time. It is a big opportunity,” he said.

Making the most of this big opportunity may require a rethink of business models, however. Emilian Popa is principal at DiGAME Investment Company, an investor in recently-acquired South African ed-tech company GetSmarter. He wants to see more exits in the African tech space, but believes it will depend on the development of business models.

“We need to build business models that are more than just tech. Let’s call them tech-enabled. When I look at business models I’m looking for the ones that build tech but also build infrastructure, distribution models. That’s what I believe works,” he said.

For Osiakwan, there is a need to unlock more local capital, with the help of incentives, to get successful African entrepreneurs investing in startups themselves.

“In the local ecosystem, the ratio of of foreign capital to local capital is about 70:30. We need to unlock local capital because it comes with value that foreign capital does not add. That will increase the value of the raw money that goes into the ecosystem,” he said.

The post Why a new model is needed for investing in African tech startups appeared first on Disrupt Africa.

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Traditional models for investing in early-stage businesses do not work in Africa, and investors need to rethink how they do things when backing startups on the continent.

That is according to panellists discussing investing in African startups at the recent startup-dedicated AHUB event held at the AfricaCom conference in Cape Town, who said models for investing on the continent needed to be different from elsewhere in the world.

Zachariah George, co-founder and chief investment officer at Startupbootcamp AfriTech, said many investors that are new to Africa think from a private equity perspective, which is not relevant.

“There is method in the madness of how you do early stage VC in Africa,” he said. “You have to go out and meet people. You have to go all over the place and meet entrepreneurs, and see what they are doing. It is a hard, grind in, grind out industry. This is not Silicon Valley, it is not New York.”

Sharron McPherson, co-founder of the Centre for Disruptive Technologies, agreed models that have worked in places like Silicon Valley were not right for Africa.

“Silicon Valley is a valley in the US, not everything that is done there is right for Africa. Often what we are doing is looking for unicorns, and other entities are not able to access capital,” she said.

“We are looking at leveraging new approaches to what is right in Africa. I don’t think we have got the language right yet and I don’t think we have got the business models right. It’s is definitely not private equity, and VC needs some tweaking here.”

Getting distracted by discussions around unicorns was also something Eric Osiakwan, managing partner of Chanzo Capital, cautioned against, saying there were excellent entrepreneurs across the continent building exciting business that, even if they are unlikely to become unicorns, should still be very appealing to investors.

“I get excited by the entrepreneur. There are entrepreneurs out there that are able to build amazing businesses. It’s great to build unicorns, but there are entrepreneurs in Africa with no access to capital that are able to build great businesses,” he said.

“The most successful companies in the world build great products that people can use and pay for. If you are invested in this in the long term this needs to be your motivation.”

So what should investors be looking for when it comes to African tech startups? George said it was very important to look at what the passion of founders, and their route to market, which he said was the reason why startups grow or fail. He also urged African entrepreneurs to solve truly African problems.

“There are so many developing world problems that are not tackled in the US, or Canada, or Western Europe. Let’s stop focusing on nice to have “vitamins”, let’s build some “aspirins”. We have some people that are talking about social impact, and some about VC. It is the same conversation. Every business in Africa is social impact,” he said.

Ben White, founder and CEO of VC4A, agreed with this.

“We are talking about transformational entrepreneurs who are using tech because of its transformational power. All of these companies are impacting change across all aspects of society. It is about business, and it is about social change at the same time. It is a big opportunity,” he said.

Making the most of this big opportunity may require a rethink of business models, however. Emilian Popa is principal at DiGAME Investment Company, an investor in recently-acquired South African ed-tech company GetSmarter. He wants to see more exits in the African tech space, but believes it will depend on the development of business models.

“We need to build business models that are more than just tech. Let’s call them tech-enabled. When I look at business models I’m looking for the ones that build tech but also build infrastructure, distribution models. That’s what I believe works,” he said.

For Osiakwan, there is a need to unlock more local capital, with the help of incentives, to get successful African entrepreneurs investing in startups themselves.

“In the local ecosystem, the ratio of of foreign capital to local capital is about 70:30. We need to unlock local capital because it comes with value that foreign capital does not add. That will increase the value of the raw money that goes into the ecosystem,” he said.

The post Why a new model is needed for investing in African tech startups appeared first on Disrupt Africa.

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//

Traditional models for investing in early-stage businesses do not work in Africa, and investors need to rethink how they do things when backing startups on the continent.

That is according to panellists discussing investing in African startups at the recent startup-dedicated AHUB event held at the AfricaCom conference in Cape Town, who said models for investing on the continent needed to be different from elsewhere in the world.

Zachariah George, co-founder and chief investment officer at Startupbootcamp AfriTech, said many investors that are new to Africa think from a private equity perspective, which is not relevant.

“There is method in the madness of how you do early stage VC in Africa,” he said. “You have to go out and meet people. You have to go all over the place and meet entrepreneurs, and see what they are doing. It is a hard, grind in, grind out industry. This is not Silicon Valley, it is not New York.”

Sharron McPherson, co-founder of the Centre for Disruptive Technologies, agreed models that have worked in places like Silicon Valley were not right for Africa.

“Silicon Valley is a valley in the US, not everything that is done there is right for Africa. Often what we are doing is looking for unicorns, and other entities are not able to access capital,” she said.

“We are looking at leveraging new approaches to what is right in Africa. I don’t think we have got the language right yet and I don’t think we have got the business models right. It’s is definitely not private equity, and VC needs some tweaking here.”

Getting distracted by discussions around unicorns was also something Eric Osiakwan, managing partner of Chanzo Capital, cautioned against, saying there were excellent entrepreneurs across the continent building exciting business that, even if they are unlikely to become unicorns, should still be very appealing to investors.

“I get excited by the entrepreneur. There are entrepreneurs out there that are able to build amazing businesses. It’s great to build unicorns, but there are entrepreneurs in Africa with no access to capital that are able to build great businesses,” he said.

“The most successful companies in the world build great products that people can use and pay for. If you are invested in this in the long term this needs to be your motivation.”

So what should investors be looking for when it comes to African tech startups? George said it was very important to look at what the passion of founders, and their route to market, which he said was the reason why startups grow or fail. He also urged African entrepreneurs to solve truly African problems.

“There are so many developing world problems that are not tackled in the US, or Canada, or Western Europe. Let’s stop focusing on nice to have “vitamins”, let’s build some “aspirins”. We have some people that are talking about social impact, and some about VC. It is the same conversation. Every business in Africa is social impact,” he said.

Ben White, founder and CEO of VC4A, agreed with this.

“We are talking about transformational entrepreneurs who are using tech because of its transformational power. All of these companies are impacting change across all aspects of society. It is about business, and it is about social change at the same time. It is a big opportunity,” he said.

Making the most of this big opportunity may require a rethink of business models, however. Emilian Popa is principal at DiGAME Investment Company, an investor in recently-acquired South African ed-tech company GetSmarter. He wants to see more exits in the African tech space, but believes it will depend on the development of business models.

“We need to build business models that are more than just tech. Let’s call them tech-enabled. When I look at business models I’m looking for the ones that build tech but also build infrastructure, distribution models. That’s what I believe works,” he said.

For Osiakwan, there is a need to unlock more local capital, with the help of incentives, to get successful African entrepreneurs investing in startups themselves.

“In the local ecosystem, the ratio of of foreign capital to local capital is about 70:30. We need to unlock local capital because it comes with value that foreign capital does not add. That will increase the value of the raw money that goes into the ecosystem,” he said.

The post Why a new model is needed for investing in African tech startups appeared first on Disrupt Africa.

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Investing or taking on investment is a decision to build a long-term relationship much like a marriage, with multiple parties involved, according to panelists at the recent AfricArena conference in Cape Town.

When considering an investment deal, the panelists focused on the importance of every investment making sense for both the startup and the investor, noting that it is crucial for both sides to see eye-to-eye and have the “same DNA” to make the company’s long-term journey workable.

“It is a marriage.  One of the biggest lessons I teach to anyone looking to raise capital, is that it has to work both ways,” said Clive Butkow, chief executive officer (CEO) of Kalon Venture Partners.

“If we create wealth for the founder, we create wealth for ourselves.”

As such, Butkow says startups should look for investors who they think they can “walk with” for the next seven to 10 years.

Charlotte Koep, investment associate at 4Di Capital, highlighted that the “marriage” is not always between only two parties.  Other co-investors also play a big role in how the company’s trajectory pans out, and as such they must be considered when making any new investment.

“An important part of making an investment is the question: are you aligned with the other investors?”

Her colleague at 4Di Capital, Justin Stanford, agreed, saying: “Those relationships are important.  You’re going to work together for a long part of your life.”

As a result, investments are made largely based on the people involved, the panellists said.

“We don’t invest in a product.  We invest in a person, we invest in the team,” Butkow said.

However, alarm bells will sound if an entrepreneur has already given away too much equity to angel or seed investors.  The founder needs to retain a strong connection and incentive to work hard on the company, which ebbs if too much equity is taken away.

“Be wary of giving away too much equity, because you’re cutting your hands off when it comes to securing funding from any more sophisticated investors,” Butkow said.

The post Investment is like polygamous marriage – panel appeared first on Disrupt Africa.

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Nigerian e-health startup LifeBank has expanded its product offering with the launch of AirBank, an emergency medical oxygen delivery service.

Founded in 2016, the Lagos-based LifeBank offers an online platform that connects hospitals with blood banks, and blood banks with donors.

Hospitals can request the blood they need, with the startup delivering the requested blood in less than 45 minutes, in a WHO Blood Transfusion Safety compliant cold chain.

Founder Temie Giwa-Tubosun told Disrupt Africa earlier this month the startup would soon be adding other essential medical products to its platform, and it has now begun that process with the launch of AirBank, an on-demand emergency medical oxygen delivery product it says is the quickest, most convenient, and most cost effective way to order medical oxygen in cylinders.

In a bid to reduce Nigeria’s child mortality rate caused by limited access to oxygen, AirBank allows hospitals and patients to call LifeBank at any time of the day to request emergency medical oxygen, and have it delivered in less than 50 minutes.

Other medical products like vaccines and rare drugs will also soon be available via LifeBank, which was incubated at Co-Creation Hub (CcHub) in 2016, has raised a funding round led by EchoVC Partners, and took part in Merck’s Lagos-based satellite accelerator and the MIT Solver Class this year.

Since inception, LifeBank has moved almost 11,000 products, and worked with over 400 hospitals to save over 2,100 lives. More than 6,300 people are registered as voluntary blood donors on its platform, over 20 per cent of whom have donated blood in the past two years.

The post Nigeria’s LifeBank launches oxygen delivery service AirBank appeared first on Disrupt Africa.

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Four African tech startups will have the opportunity to pitch their innovative industry solutions to attendees at the world’s largest mining investment conference in Cape Town next February.

The Investing in African Mining Indaba, which takes place on February 4-7, has partnered with Unearthed, which supports entrepreneurs in improving the efficiency and competitiveness of the global resources sector, to offer startups the opportunity.

Applications are open to any business across the continent that has a prototype, product or service that can impact industry. Companies do not need to have worked on a mining project before, but need to have exciting technology solutions that can make a difference.

The four successful applicants will present to approximately 750 investors and dealmakers, leaders from over 220 mining companies, and 34 government ministers. They will also receive a free pass to the Mining Indaba, and receive media coverage profiling their businesses.

“I am excited that we have the opportunity to share some of the amazing tech being built across Africa with an audience of potential customers and investors at one of the world’s largest mining conferences,” said Holly Bridgwater, industry lead for crowdsourcing at Unearthed.

Investing in African Mining Indaba managing director Alex Grose said the mining industry has been perceived as an old-fashioned sector, but technology has been rapidly changing the way the sector operates.

“From AI and big data to new satellite technologies and more efficient production, mining companies are embracing innovation. We are very proud and excited to be running this fantastic initiative together with Unearthed, set to bring new ideas to one of the world’s oldest industries as well as provide four African tech startups with exposure to the world’s largest mining companies,” he said.

Applications are open here until November 30.

The post How to pitch your innovative tech startup to mining executives appeared first on Disrupt Africa.

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South African student accommodation marketplace DigsConnect began life as a passion product, but has since grown into a fully-fledged business with more than 50,000 rooms listed on its platform.

Co-founder Alexandria Procter was on the Student Representative Council (SRC) at the University of Cape Town (UCT) back in 2015, with all off-campus students falling under her jurisdiction.

“The biggest issue I was dealing with was matching up students looking for accommodation and landlords looking for tenants,” Procter told Disrupt Africa. “So DigsConnect actually started as an Excel spreadsheet where I was manually linking students with landlords! It wasn’t a sustainable system, and so I decided to build a basic platform so people could connect directly with each other.”

DigsConnect was born, but it remained a sideline project for Procter as she finished her undergraduate degree and moved into postgraduate. But a few days into her postgraduate it became clear she could not do both.

“DigsConnect was gaining traction quickly and it became apparent that I was on to something. I spoke to my student advisor about it at length, and he was really the one who encouraged me to take the leap and launch it as a startup,” she said.

That she did, joining forces with fellow SRC member and friend Greg Keal, with Brendan Ardagh joining the team shortly after. Now, it seems like the right move, with DigsConnect growing from 2,000 listed rooms to more than 50,000 in less than six months.

The student accommodation marketplace allows landlords, estate agents and property managers to post their property listings on the platform, be they rooms in apartments or houses, granny flats, or entire private residencies with thousands of beds. Students can search and filter through these listings to find accommodation that suits their needs, and also find other students to live with.

“That’s the core of what we do – we centralise all types of student accommodation in one place, so that if you’re coming from Port Elizabeth and going to UCT, you can just go onto DigsConnect to find the perfect digs close to your campus, book and pay for it, match up and meet your roommate – all before even leaving home,” Procter said.

The team is also piloting a new called the “Virtual Res”, with the idea being to create an inclusive online social living community for students. Each Virtual Res is specific to a university or college, with students are automatically added to their varsity’s platform when they log in with their university email address.

“On there, they’ll be able to find digs mates that are registered at the same institution as them, organise lifts to campus, join digs’ with their classmates and share living expenses, find private res’ where we’ve negotiated discount deals, and a lot more. It’s about making things safer, more efficient, more inclusive and promoting a fun and memorable varsity experience,” said Procter.

She said DigsConnect started as a direct response to the massive disconnect between landlords and students in South Africa.

“We wanted to provide an easy-to-use way of linking the two and providing tonnes of value outside of the typical classifieds-style listing page in the form of our internal messaging, viewing booker, and soon entire property management system, payment system and ride-sharing, all through our website,” Procter said.

“We are disrupting a market dominated by the old players who haven’t done anything to design for this niche. Our background in student leadership structures and our willingness to do things differently has allowed us to shake up a market that seems to never have been explored as an entire market of its own before.”

The self-funded startup has partnered with a number of large brands on marketing campaigns at universities, allowing it to market on a large-scale but low-budget basis, and Procter said she has been delighted with uptake.

“We meet with students and landlords every week to chat about the pain points and investigate what we can do better to solve their issues in the management of and searching for student accommodation,” she said.

Digs Connect has listings in every major university city or town nationwide, but its Cape Town base means that has been the focus of its operations.

“However, we’ve put a lot of effort into our expansion and so we also have a strong presence in Stellenbosch, Johannesburg, Pretoria, Potchefstroom, Port Elizabeth and Grahamstown. Wherever there’s an institute of higher education and students, we want to be offering our accommodation service for the benefit of the students, parents, the institutions and all the homeowners in the area,” Procter said.

The startup has thus far been focused on growth, and so has not been charging any of its users.

“We hadn’t planned to charge them any time soon, but we reached a point where landlords kept asking us if they could pay to advertise on our site that it seemed a bit silly to keep saying “no” to them. It is, and always will be, free to list on DigsConnect. We’re fundamentally value-focused, and we’re prioritising creating a phenomenal product that adds immense value to people’s lives. We believe that money follows value. Product market fit is essential, and until we’ve nailed done a flawless product, we won’t be charging,” Procter said.

Ultimately, however, the plan is for landlords and students to manage their rent via DigsConnect.

“This will mean that students pay via DigsConnect, and we take a small commission on that. We’re working closely with our users to figure out what a fair rate would be. It’s super important for us that our users help us design our system and processes with their input and feedback,” said Procter.

The post This student-founded SA startup is solving a big student problem appeared first on Disrupt Africa.

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Egyptian app-based mass transit system Swvl has announced it has raised a Series B round of funding worth tens of millions of dollars to help it consolidate its market-leading position and launch an R&D facility in Germany.

Swvl, a mass-transit system that enables riders heading in the same direction to share a ride in a van or bus, has not disclosed the exact amount raised, but it is greater than the US$8 million Series A round it secured earlier this year and more than the previous record round for an Egyptian tech startup – the US$12 million secured by e-health startup Vezeeta in September.

The round was exceptionally oversubscribed with participation from all existing investors as well as some new regional and local investors. It was led by regional venture fund BECO Capital, alongside Africa-based investor DiGAME and global VC fund Silicon Badia. Other investors include Raed Ventures, Arzan VC, Sawari Ventures, Oman Technology Fund and Dash Ventures.

“It is about time we build a multi-billion dollar tech company out of Egypt. With this round we are committed to being more customer-centric than ever and to build top class operations. We will also continue developing world class technology that solves the daily struggle of commuting in emerging markets. This round is the biggest round of funding for a tech startup in Egypt and one of the biggest Series B rounds ever raised in the MENA region,” said Mostafa Kandil, co-founder and chief executive officer (CEO) of Swvl.

With the funding, Swvl will continue to solidify its position as a leader in building tech-enabled public transportation and will start its R&D facility in Berlin, Germany.

Twenty months since its launch, Swvl is facilitating hundreds of thousands of rides each month, serving tens of thousands of customers on its network of more than 200 routes in Cairo and Alexandria.

The post Egypt’s Swvl secures Series B round worth “tens of millions” appeared first on Disrupt Africa.

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Nigerian fintech startup OyaPay, which allows users to pay merchants by scanning a QR code, has released an update to its mobile application that includes its new “Order Ahead” feature.

Launched at the end of last year, OyaPay powers offline transactions with QR technology, helping offline merchants accept payments with any mobile phone. The startup has also developed a checkout solution for supermarkets, OyaPayGo, which provides a seamless shopping and payment mode for users and merchants.

The second version of its app includes a new feature called “Order Ahead”, which allows merchants to list their products, take orders and receive payments in-app from customers, who can then pick up their purchases.

OyaPay said making this feature available strengthened the OyaPay platform and positioned it as a one-stop app destination for customer-business relationship.

“This new feature allows OyaPay to further achieve its mission of allowing users and offline businesses transact digitally. We’ve succeeded in satisfying the urge to be more than just any other payment solution,” said the startup’s chief executive officer (CEO) Abdulhamid Hassan.

“There was always that strong desire to provide more value to our end users and merchants. We are extremely glad that every registered user or business on OyaPay can do more than just make and receive payments.”

Other features that comes with the new version of the app include a loyalty and gifting service, a responsive dashboard for merchants to manage their business and customers, a self-service marketing tool, and SDK integrations.

The post Nigerian fintech startup OyaPay adds new “Order Ahead” feature appeared first on Disrupt Africa.

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Applications have opened for the New Venture Competition, run by Harvard Business School’s Africa Business Club, which is offering startups the chance to win cash prizes of up to US$10,000.

The student-run Africa Business Club will host its 21st annual Africa Business Conference in Boston in February, which will feature the New Venture Competition, aimed at showcasing the diversity of entrepreneurs making a difference on the continent today.

Ten startup finalists will be invited to pitch their business in front of approximately 700 attendees and receive feedback from a panel of experienced judges. The competition winner and runner-up will be awarded cash prizes of US$10,000 and US$5,000, respectively.

The top 20 shortlisted ventures will also have the opportunity to showcase their companies at the event’s Startup Fair, to network and and interact with distinguished panelists and conference attendees.

Interested startups can apply here until November 30.

The post Harvard’s Africa Business Club offers startups $10k cash prizes appeared first on Disrupt Africa.

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