How Successful African Entrepreneurs Raised Capital for Their Businesses
“I don’t have the capital.”
“Nobody wants to give me capital.”
“The banks have turned me down five times.”
"The capital is not enough to start this business"
These are some of the most common words we used to hear among ourselves as far as business is concerned.Access to capital is arguably the biggest threat to entrepreneurs around the world. And every year, thousands of passionate people – especially in Africa – give up on their business ideas, projects and dreams just because they can’t find capital.
But is lack of capital really the “serial killer of business dreams” that we claim it is?
But the real problem is actually lack of awareness on how to rise capital and not lack of capital.
Over the last decade, more capital has been flowing into places like Africa like never before. In 2015, the continent received up to $276.5 million in startup funding. In 2016, the number risen to $365milion today 2017 AFDB Bank is about to fund rise more than $ 250 million to youth. These Facts can be boring, especially when you’re desperately looking for capital.
But this article isn’t just about stories. It’s about fixing the misconceptions and wrong notions you’ve always had about raising capital for your business.
Below are 10 of the most exciting success stories of African entrepreneurs who successfully raised capital to start, grow and scale their businesses.
She is the a founder of EcoPost,
The company that collects and recycles waste plastic into aesthetic, durable and environmentally-friendly fencing posts that serve as an alternative material to timber.
But her business would have remained a dream without the financial support of international and local investors and NGOs
HOW SHE STARTED?
In 2010, she quit her bank job to start a waste recycling business.So in 2010, Lorna applied for and won a $6,000 SEED Award which served as start-up capital for her business. In the same year, she won a grant award of $12,700 from the Enablis Energy Globe-Safaricom Foundation.
She also won a business plan competition organized by the Cartier Women’s Initiative, and received a prize award of nearly $12,000.
Recently, her business attracted an equity investment from the Blue Haven Initiative and the Opus Foundation amounting to $495,000. This was used to expand the business and purchase advanced recycling equipment.
LESSON BEHIND?
Every year, hundreds of international and local organisations support businesses that tackle issues such as environmental pollution, illiteracy, disease and other social problems. They usually provide grants, donations, loans, equity or even training and advice.
The problem is, many African entrepreneurs don’t know about these funding opportunities, and as a result they don’t apply.
Jason is the co-founder of IrokoTV, a mobile entertainment and internet TV platform that’s particularly popular for its impressive catalogue of African ‘Nollywood’ movies.
HOW HE STARTED?
After a number of failed enterprises between 2005 and 2010, which included a blog network, a T-shirt business and a web design company.Njoku moved back home into his mother's house in Deptford. It was there that he came up with the idea of starting a NOLLYWOOD online distribution business.Cash was tight, and starting this business would have been impossible without the £90,000 contribution of Jason’s friend and business partner, Sebastian.
Since then, the growth of IrokoTV has been remarkable. To date, the business has attracted up to $40 million in investment funding from foreign investors, mostly venture capital investors.
Its investors include Tiger Global, a New York-based private equity firm, and Investment AB Kinnevik, a Swedish venture capital investor.In January 2016, IrokoTV raised $19 million in additional funding to expand its business into Francophone countries in Africa.
LESSON BEHIND?
In summary, by using a combination of business partnerships and venture capital, Jason has been able to successfully raise significant amounts of capital to grow a company that was described by Forbes Magazine as “the Netflix of Africa.”. Many organization as Venture capital firms invest more than $140 billion every year in startups and growth businesses across the world. But in Africa, venture capital is only just starting to pick up and they’re very interested in funding highly-scalable businesses that have significant profit potential.Dont get stuck there is another link to come on how you can fund rise your project.
Anna Phosa is one of Africa’s most successful pig farmers. She’s often referred to as a ‘celebrity pig farmer.’
HOW SHE STARTED?
But her business journey wasn’t rosy, and she struggled to raise capital to start and grow the business.
In 2004, Anna started her first pig farm in Soweto with $100 contributed from her personal savings. She started with only 4 small pigs.
After four years — in 2008 — she was contracted by Pick ‘n Pay, the South African supermarket chain, to supply its stores with 10 pigs per week. This was a first breakthrough and the request grew quickly to 20 pigs per week.
By 2010, she had signed a major contract with Pick ‘n Pay to supply 100 pigs (per week) over the next five years under a R25 million deal – that’s nearly $1.9 million (in Aug 2017 terms).
With a contract in hand, Anna was able to raise capital from ABSA Bank and USAID to buy a 350-hectare farm property. Today, her farm houses 4,000 pigs at a time and employs about 20 staff.
LESSON BEHIND?
Most entrepreneurs who want to start a business often turn to banks and end up disappointed. And that’s because banks tend to focus on growth and mature businesses that have healthy cashflows and collateral that can be used to secure the loan. If don’t have any of these, you could be wasting your time chasing a bank loan.
Many entrepreneurs don’t know this but banks are just one out of 15 different options for raising capital. The problem is, too many unqualified businesses approach the banks for loans.
4) OMG Digital (Ghana)
HOW THEY STARTED?
Dominic Mensah, Prince Boakye Boampong and Jesse Arhin Ghansah started OMG Ghana in 2012 when they were in college. Smartphones were becoming more popular back then, but Jesse and his friends had a hard time finding interesting things to read online.
So they decided to create a media company that provides content for people like them – young and internet-savvy Africans.
Today, the company’s brand and following has spread from Ghana into Nigeria and Kenya. And it’s set to launch sites for South Africa, Uganda, Zambia and Tanzania.
The team of three entrepreneurs was accepted into Y Combinator, one of the world’s most prestigious accelerator programs. And in June 2017, they raised $1.1 million from a group of venture capital firms and angel investors.
Angel investors are usually rich people or professional investors who invest in early-stage businesses. These are people who invest their own money in a young business in the hopes of making a high return on investment.
LESSON BEHIND?
Without angel investors, some of the most successful businesses in the world today, like Microsoft, Google and Facebook may have never existed.
HOW HE STARTED?
He started his business in 1978 with 500,000 Naira borrowed from his grandfather. That’s about $1390 in today’s terms.
And because business flourished, Dangote was able to pay back the loan to his grandfather in about six months.
In the early years, Dangote focused on importing soft commodities, including rice, frozen fish, sugar and baby food into Nigeria. Today, his business interests have expanded into local and International production of cement, salt, flour and recently, petroleum refining.
LESSON BEHIND?
A common mistake we often make as entrepreneurs is to overlook and take for granted those sources of capital that are around us and within our reach. Friends, family, work colleagues, neighbours and people within our social sphere can be interesting sources of capital, especially in the early stages of busines
These days, the banks, private and institutional investors are keen to invest in Dangote’s businesses because of the track record of success he has achieved over the years. But in the beginning, it would have been tough – if not impossible – for him to raise startup capital from any of these sources.
Remember, only people who know, like and trust you will be willing to take a chance on you in the early days of your business.
While it’s still a great option, I’ll show you some of the good and bad sides of raising capital from friends and family in the free course.
HOW SHE STARTED?
Bethlehem Alemu grew up in Zenabwork, a poor village in the suburbs of Addis Ababa, Ethiopia.
Her business – SoleRebels – is one of the most popular and fastest-growing African footwear brands in the world! Her collection of eco-friendly footwear (made from recycled materials) have been sold in more than 50 countries across the world, including the USA, Canada, Japan and Switzerland.
But her business dream would have never have taken off without the $10,000 in capital she raised from family and relatives in 2004.
Despite her poor background, it was possible to get her family and relatives to pitch in their contributions. This is the not-too-glamourous part of getting a business off the ground that glossy magazines fail to mention.
LESSON BEHIND?
Success comes at a price. It may be embarrassing and downright difficult to ask other people to invest in your business idea, dream, vision or project. But you just have to do it if you want to stand a chance.
Using that initial capital, Bethlehem’s business took off and she has gone ahead to launch another fashion business – Republic of leather — that trades in luxury leather products like bags, belts and other non-footwear leather accessories.
Her inspiring success story has been featured on Forbes, the BBC and CNN. And she was described by Forbes as ‘One of The World’s Most Powerful Women’.
Anish Shivdasani and Shafin Anwarsha are the entrepreneurs behind Giraffe, a South African startup business that provides low-cost automated recruitment solutions, based on a mobile app.
In 2016, the business won the Seedstars World Competition, beating 63 other startups from 55 countries across the world to win the grand prize of $500,000 in equity investment funding.
On a continent where many entrepreneurs complain about lack of capital, this startup from South Africa beat other businesses from across the world to win the prize. Of course the judges were impressed by the ingenuity of their business model and its potential impact on unemployment in South Africa.
Shortly after winning the $500,000 prize, Giraffe attracted an undisclosed additional seed funding from a group of US-based investors, led by the Omidyar Network – a philanthropic investment firm of Pierre Omidyar (founder of eBay).
LESSON BEHIND?
The truth is, there are hundreds of startups in Africa that could achieve the same feat if only they participated in competitions like this.
Business exploration and development is very important so as to remaining in the competition line.
So, rather than just make bespoke shoes for himself, ‘Jide came up with an idea to manufacture cool and high-quality footwear in Nigeria. That’s how Keexs, his Africa-inspired brand was born.
But there was no capital to fund his dream.
So, in 2015, he successfully raised £17,871 on Kickstarter, the world’s largest crowdfunding platform. ‘Jide used this capital to produce the first batch of 1,200 sneakers that effectively launched the brand and made it a reality.
LESSON BEHIND?
Crowdfunding is rapidly becoming one of the biggest sources of capital for passionate people who are looking to bring their business ideas, projects and dreams to life.
In 2015 alone, the global crowdfunding industry raised $34.4 billion to support entrepreneurs across the world. But in Africa, crowdfunding remains largely unknown to entrepreneurs on the continent. The world is full of potentials but we blind in these potential areas.
HOW THEY STARTED?
Zoona is a financial services business founded by two entrepreneurial brothers – Brad and Brett Macgrath in 2009. One is an ex-JP Morgan banker and the other is a former commercial director of a telecom operator in Zambia.
The startup provides both in-country and cross-border money transfer services in several African countries – Zambia, Malawi and Mozambique. And so far, it has processed more than $1 billion in money transfers, bill payments and other financial services.
In 2016, Zoona raised $15 million of capital from a group of investors led by the International Finance Corporation. The funds are being used to scale up the company’s operations as it aims to reach ten markets and 30 million active consumers across Africa by 2020.
The International Finance Corporation, or IFC, is an example of an international development institution. And there are several more like it that exist to support and invest in businesses, especially in developing regions of the world like Africa.
LESSON BEHIND?
Most international development institutions are funded or sponsored by foreign governments or global institutions like the World Bank, United Nations, European Union etc.
Many Organization provide loan and training each year in Africa, for more details find some of these at Opportunity task bar on this blog, and stay tuned for the coming hints on how to write business proposal and business plan.......
.
“Nobody wants to give me capital.”
“The banks have turned me down five times.”
"The capital is not enough to start this business"
These are some of the most common words we used to hear among ourselves as far as business is concerned.Access to capital is arguably the biggest threat to entrepreneurs around the world. And every year, thousands of passionate people – especially in Africa – give up on their business ideas, projects and dreams just because they can’t find capital.
But is lack of capital really the “serial killer of business dreams” that we claim it is?
But the real problem is actually lack of awareness on how to rise capital and not lack of capital.
Over the last decade, more capital has been flowing into places like Africa like never before. In 2015, the continent received up to $276.5 million in startup funding. In 2016, the number risen to $365milion today 2017 AFDB Bank is about to fund rise more than $ 250 million to youth. These Facts can be boring, especially when you’re desperately looking for capital.
But this article isn’t just about stories. It’s about fixing the misconceptions and wrong notions you’ve always had about raising capital for your business.
Below are 10 of the most exciting success stories of African entrepreneurs who successfully raised capital to start, grow and scale their businesses.
1) Lorna Rutto (Kenya)
She is the a founder of EcoPost,
The company that collects and recycles waste plastic into aesthetic, durable and environmentally-friendly fencing posts that serve as an alternative material to timber.
But her business would have remained a dream without the financial support of international and local investors and NGOs
HOW SHE STARTED?
In 2010, she quit her bank job to start a waste recycling business.So in 2010, Lorna applied for and won a $6,000 SEED Award which served as start-up capital for her business. In the same year, she won a grant award of $12,700 from the Enablis Energy Globe-Safaricom Foundation.
She also won a business plan competition organized by the Cartier Women’s Initiative, and received a prize award of nearly $12,000.
Recently, her business attracted an equity investment from the Blue Haven Initiative and the Opus Foundation amounting to $495,000. This was used to expand the business and purchase advanced recycling equipment.
LESSON BEHIND?
Every year, hundreds of international and local organisations support businesses that tackle issues such as environmental pollution, illiteracy, disease and other social problems. They usually provide grants, donations, loans, equity or even training and advice.
The problem is, many African entrepreneurs don’t know about these funding opportunities, and as a result they don’t apply.
2) Jason Njoku (Nigeria)
Jason is the co-founder of IrokoTV, a mobile entertainment and internet TV platform that’s particularly popular for its impressive catalogue of African ‘Nollywood’ movies.
HOW HE STARTED?
After a number of failed enterprises between 2005 and 2010, which included a blog network, a T-shirt business and a web design company.Njoku moved back home into his mother's house in Deptford. It was there that he came up with the idea of starting a NOLLYWOOD online distribution business.Cash was tight, and starting this business would have been impossible without the £90,000 contribution of Jason’s friend and business partner, Sebastian.
Since then, the growth of IrokoTV has been remarkable. To date, the business has attracted up to $40 million in investment funding from foreign investors, mostly venture capital investors.
Its investors include Tiger Global, a New York-based private equity firm, and Investment AB Kinnevik, a Swedish venture capital investor.In January 2016, IrokoTV raised $19 million in additional funding to expand its business into Francophone countries in Africa.
LESSON BEHIND?
In summary, by using a combination of business partnerships and venture capital, Jason has been able to successfully raise significant amounts of capital to grow a company that was described by Forbes Magazine as “the Netflix of Africa.”. Many organization as Venture capital firms invest more than $140 billion every year in startups and growth businesses across the world. But in Africa, venture capital is only just starting to pick up and they’re very interested in funding highly-scalable businesses that have significant profit potential.Dont get stuck there is another link to come on how you can fund rise your project.
3) Anna Phosa (South Africa)
Anna Phosa is one of Africa’s most successful pig farmers. She’s often referred to as a ‘celebrity pig farmer.’
HOW SHE STARTED?
But her business journey wasn’t rosy, and she struggled to raise capital to start and grow the business.
In 2004, Anna started her first pig farm in Soweto with $100 contributed from her personal savings. She started with only 4 small pigs.
After four years — in 2008 — she was contracted by Pick ‘n Pay, the South African supermarket chain, to supply its stores with 10 pigs per week. This was a first breakthrough and the request grew quickly to 20 pigs per week.
By 2010, she had signed a major contract with Pick ‘n Pay to supply 100 pigs (per week) over the next five years under a R25 million deal – that’s nearly $1.9 million (in Aug 2017 terms).
With a contract in hand, Anna was able to raise capital from ABSA Bank and USAID to buy a 350-hectare farm property. Today, her farm houses 4,000 pigs at a time and employs about 20 staff.
LESSON BEHIND?
Most entrepreneurs who want to start a business often turn to banks and end up disappointed. And that’s because banks tend to focus on growth and mature businesses that have healthy cashflows and collateral that can be used to secure the loan. If don’t have any of these, you could be wasting your time chasing a bank loan.
Many entrepreneurs don’t know this but banks are just one out of 15 different options for raising capital. The problem is, too many unqualified businesses approach the banks for loans.
HOW THEY STARTED?
Dominic Mensah, Prince Boakye Boampong and Jesse Arhin Ghansah started OMG Ghana in 2012 when they were in college. Smartphones were becoming more popular back then, but Jesse and his friends had a hard time finding interesting things to read online.
So they decided to create a media company that provides content for people like them – young and internet-savvy Africans.
Today, the company’s brand and following has spread from Ghana into Nigeria and Kenya. And it’s set to launch sites for South Africa, Uganda, Zambia and Tanzania.
The team of three entrepreneurs was accepted into Y Combinator, one of the world’s most prestigious accelerator programs. And in June 2017, they raised $1.1 million from a group of venture capital firms and angel investors.
Angel investors are usually rich people or professional investors who invest in early-stage businesses. These are people who invest their own money in a young business in the hopes of making a high return on investment.
LESSON BEHIND?
Without angel investors, some of the most successful businesses in the world today, like Microsoft, Google and Facebook may have never existed.
5) Aliko Dangote (Nigeria)
Africa’s richest man, Aliko Dangote, currently worth $12.3 billion is a role model to entrepreneurs on the continent.
While his business interests currently spread across Africa, Dangote’s impressive fortune was built from very humble beginnings.HOW HE STARTED?
He started his business in 1978 with 500,000 Naira borrowed from his grandfather. That’s about $1390 in today’s terms.
And because business flourished, Dangote was able to pay back the loan to his grandfather in about six months.
In the early years, Dangote focused on importing soft commodities, including rice, frozen fish, sugar and baby food into Nigeria. Today, his business interests have expanded into local and International production of cement, salt, flour and recently, petroleum refining.
LESSON BEHIND?
A common mistake we often make as entrepreneurs is to overlook and take for granted those sources of capital that are around us and within our reach. Friends, family, work colleagues, neighbours and people within our social sphere can be interesting sources of capital, especially in the early stages of busines
These days, the banks, private and institutional investors are keen to invest in Dangote’s businesses because of the track record of success he has achieved over the years. But in the beginning, it would have been tough – if not impossible – for him to raise startup capital from any of these sources.
Remember, only people who know, like and trust you will be willing to take a chance on you in the early days of your business.
While it’s still a great option, I’ll show you some of the good and bad sides of raising capital from friends and family in the free course.
6) Bethlehem Alemu (Ethiopia)
HOW SHE STARTED?
Bethlehem Alemu grew up in Zenabwork, a poor village in the suburbs of Addis Ababa, Ethiopia.
Her business – SoleRebels – is one of the most popular and fastest-growing African footwear brands in the world! Her collection of eco-friendly footwear (made from recycled materials) have been sold in more than 50 countries across the world, including the USA, Canada, Japan and Switzerland.
But her business dream would have never have taken off without the $10,000 in capital she raised from family and relatives in 2004.
Despite her poor background, it was possible to get her family and relatives to pitch in their contributions. This is the not-too-glamourous part of getting a business off the ground that glossy magazines fail to mention.
LESSON BEHIND?
Success comes at a price. It may be embarrassing and downright difficult to ask other people to invest in your business idea, dream, vision or project. But you just have to do it if you want to stand a chance.
Using that initial capital, Bethlehem’s business took off and she has gone ahead to launch another fashion business – Republic of leather — that trades in luxury leather products like bags, belts and other non-footwear leather accessories.
Her inspiring success story has been featured on Forbes, the BBC and CNN. And she was described by Forbes as ‘One of The World’s Most Powerful Women’.
7) Giraffe (South Africa)
Anish Shivdasani and Shafin Anwarsha are the entrepreneurs behind Giraffe, a South African startup business that provides low-cost automated recruitment solutions, based on a mobile app.
In 2016, the business won the Seedstars World Competition, beating 63 other startups from 55 countries across the world to win the grand prize of $500,000 in equity investment funding.
On a continent where many entrepreneurs complain about lack of capital, this startup from South Africa beat other businesses from across the world to win the prize. Of course the judges were impressed by the ingenuity of their business model and its potential impact on unemployment in South Africa.
Shortly after winning the $500,000 prize, Giraffe attracted an undisclosed additional seed funding from a group of US-based investors, led by the Omidyar Network – a philanthropic investment firm of Pierre Omidyar (founder of eBay).
LESSON BEHIND?
The truth is, there are hundreds of startups in Africa that could achieve the same feat if only they participated in competitions like this.
Business exploration and development is very important so as to remaining in the competition line.
8) Babajide Ipaye (Nigeria)
HOW HE STARTED?
Jide Ipaye worked as an IT professional, but deep
in his heart, he wanted to do something much different. He wanted to
make stylish footwear.
From an early age he’s always loved shoes but the options available
to him were quite limited because of his foot size – he’s a size 48
(European). So, finding shoes that are the right size and fit had always
been a challenge.So, rather than just make bespoke shoes for himself, ‘Jide came up with an idea to manufacture cool and high-quality footwear in Nigeria. That’s how Keexs, his Africa-inspired brand was born.
But there was no capital to fund his dream.
So, in 2015, he successfully raised £17,871 on Kickstarter, the world’s largest crowdfunding platform. ‘Jide used this capital to produce the first batch of 1,200 sneakers that effectively launched the brand and made it a reality.
LESSON BEHIND?
Crowdfunding is rapidly becoming one of the biggest sources of capital for passionate people who are looking to bring their business ideas, projects and dreams to life.
In 2015 alone, the global crowdfunding industry raised $34.4 billion to support entrepreneurs across the world. But in Africa, crowdfunding remains largely unknown to entrepreneurs on the continent. The world is full of potentials but we blind in these potential areas.
9) Zoona (Zambia)
HOW THEY STARTED?
Zoona is a financial services business founded by two entrepreneurial brothers – Brad and Brett Macgrath in 2009. One is an ex-JP Morgan banker and the other is a former commercial director of a telecom operator in Zambia.
The startup provides both in-country and cross-border money transfer services in several African countries – Zambia, Malawi and Mozambique. And so far, it has processed more than $1 billion in money transfers, bill payments and other financial services.
In 2016, Zoona raised $15 million of capital from a group of investors led by the International Finance Corporation. The funds are being used to scale up the company’s operations as it aims to reach ten markets and 30 million active consumers across Africa by 2020.
The International Finance Corporation, or IFC, is an example of an international development institution. And there are several more like it that exist to support and invest in businesses, especially in developing regions of the world like Africa.
LESSON BEHIND?
Most international development institutions are funded or sponsored by foreign governments or global institutions like the World Bank, United Nations, European Union etc.
Many Organization provide loan and training each year in Africa, for more details find some of these at Opportunity task bar on this blog, and stay tuned for the coming hints on how to write business proposal and business plan.......
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