Africa's tech start-ups urge access to funding

Africa's tech start-ups urge access to funding

Continent has right approach to innovation, but funding is critical say business leaders.

While African start-ups raised US$686.4-million in 2018 according to Digest Africa, there is still a need for greater access to funding for maximum results say business developers and entrepreneurs.

Digest Africa's review of funded tech companies in Africa last year showed that about 10% of the total funding across 336 disclosed funding deals (out of the 415 recorded) was invested in early stage start-ups.

The 50 most funded tech companies (with Tanzania's Zola Electric topping the list with US$107.5-million) received the lion's share of about 90%.

The East African region had US$303.9 million (44.2%) as the highest amount - Kenya clinching 22.8% (US$156.5-million), while the financial services sector recorded 92 deals worth US$276.7-million (40.3%).

Tapiwa Ndlovu, whose Kumba Africa project will showcase at the Collision Conference in Toronto in May 2019 as part of the ALPHA Program, says the lack of funding access is impeding growth.

"I believe that Africa is headed in the right direction when it comes to innovation in the tech space," said Ndlovu. "Living in the USA and being from Zimbabwe has helped me to see that one of the main reasons for the difference is access to funding."

He said it is the vast pool of resources and funding available to tech entrepreneurs in the USA from universities to corporate settings that makes a difference "and we need our governments and other industry players to avail more resources and funding to African entrepreneurs."

"I have seen the growth of tech incubators around the continent and a wave of innovative companies and that makes me certain that Africa is just touching the surface of what we can achieve with technology advancements such as blockchain, artificial intelligence (AI) and machine learning (ML)," he adds.

Started together with Ayyoob Abrahams in May 2018, Kumba Africa's online marketplace and booking platform uses AI and ML to help travellers book and pay for customised travel experiences tailored to their preferences and budget.

The project team is currently bootstrapping using mainly freemium services, low-cost APIs, multiple free servers and leveraging personal connections. They are looking to raise a seed round in about six months as an early stage start-up.