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Category: StartUPs

Founder-Led Sales Strategies: Tips for Accelerating Growth for Your SaaS Startup

Writer: AYORINDE AJAYI

At the early stage, when startups are competing primarily for product fit and traction, founders should be willing and able to lead by example.

A startup CEO should take the lead on the company’s sales directive, and everything else can then fall into place.

Here are some recommendations that a SaaS startup founder can use to help the sales team achieve early-stage sales growth.

What is a Founder-Led Sales Strategy?

Founder-led is the term used to describe a sales approach where the founder of a startup is responsible for qualifying leads, engaging the leads to identify their pain points, pitching the product or service, and completing the sale.

An approach that greatly differs from a product-led strategy. However, both strategies can be applied for unlimited growth.

This approach works wonders because of the unalloyed passion, confidence, and product knowledge the founder infused into the sales engagement. Even without sales experience, the founder of a startup is the best person to sell their idea. They have a deeper understanding of the product than anyone else and have a good idea of the pain point they’re trying to solve.

Formalizing a sales team too early could stall startup growth by creating friction in a still-developing sales pipeline. A founder-led sales strategy fully develops that pipeline and creates a strong sales process to build on.

What is a SaaS Subscription Revenue Model for Startup?

SaaS (Software-as-a-Service subscription) is the term used to describe a business model where users or customers pay monthly, quarterly, or annual subscription (recurring) fees for as long as they want the product or service (customer lifetime value).

In different forums, the SaaS business model has been cited as a model that experiences at least a 10% month-on-month churn rate, unlike the pay-as-you-use or one-time fee models. Although there are a lot of contributing factors, a paying customer could stop subscribing to a product or service at will.

In Nigeria, we have a peculiar issue beyond economic reason where the majority of customers prefer to dictate the next cycle of subscription, and this would be a key metric for growth.

Benefits of a Founder-Led Sales Strategy

There are many benefits that SaaS startups can gain from implementing this strategy. Some are instant gratifications, while others could be delayed or ongoing. A founder-led sales strategy offers:

1. Clear and Direct Feedback: While some founders solely rely on the product manager’s feedback reports, a CEO engaging warm leads gets a unique opportunity to receive one-on-one feedback from those willing to hear them out.

The founder should use the time to learn more about the interests of their customers regarding the key problem they are trying to solve. A CEO who learns through on-the-spot feedback can create detailed and authentic sales training manuals for tomorrow.

2. Initial Revenue: Revenue may seem like an obvious benefit of sales. So while you celebrate those first sales, they don’t signal success yet, but what nothing. Some sales professionals put the threshold at 1000 sales.

As this can be beneficial at the early stage, a founder wearing all the hats in a company could be a recipe for micromanagement.

3. Product Refine: There is no better time to fine-tune your product or services than during the first few months of launch.

It is nearly impossible to bring a perfect product to market on the first try, which is why those sales calls are so helpful for a founder willing to listen to feedback objectively. By taking time to refine some aspects of the product to better meet the needs of potential customers, you are laying the groundwork for improved customer service, satisfaction, and retention.

How to Approach a Founder-Led Sales Strategy

To get started with a founder-led sales strategy. Here’s a concise and candid step-by-step guide for reference.

Create an ideal customer profile: Go as narrow as possible. Consider your ideal customers. A business-to-consumer (B2C) SaaS startup should only focus on competitive buyer personas. While a B2B startup operates differently considering the diverse factors in determining ICP.

Create a small, targeted list: We’re getting specific because we want to start small. A startup’s initial sales goal should be quality over quantity. A “spray and pray” approach to sales in the startup phase guarantees a low closing rate.

Develop an Elevator Pitch: How can you communicate your product or service’s solution engagingly to potential customers? Find it and develop it.

Start qualifying prospects: With the help of your team, lead generation and qualification are an important part of the sales process. A sign you’re qualifying correctly is you say no more than yes when exploring a potential prospect.

Build a sales process: Every process starts with uncovering pain points. Next, demonstrate the solution and propose a business relationship. Finally, negotiate as needed and close the deal.

Tips for Success

While implementing a founder-led sales strategy is beneficial, it’s not always as easy as it looks. Remember the following:

Learn the science of sales: Knowing what potential customers think and feel throughout the buying process can significantly affect closing rates. Add empathy and a consultative selling approach to your sales meetings.

Embrace tools: A leader-led sales approach is beneficial but often filled with time-consuming tasks. Instead, automate as much of your sales and other day-to-day processes as possible with automation tools and streamline your workflows.

Case Study: Klas, an online teaching platform, recently launched a founder-led sales generation programme called Klas Launch Accelerator for educators. And being championed by its Nigerian founder and CEO.

Conclusion:

Being a successful salesperson requires a tremendous skill set. It’s okay if you’re still developing yours as a CEO. However, remember that no one else can bring the same authenticity and passion to sales activities as you can, so your chances of success are likely higher than those of a trained sales team member who wasn’t part of the product’s developmental stage.

A leader-led sales strategy is the best approach when a company is small. By spending time with early adopters, a CEO can fine-tune their product and process to serve as an unwavering foundation for their future sales team to build upon.

About the Writer:

Ayorinde Ajayi

Ayorinde Ajayi is a tech product sales specialist and consultant for B2B and B2C startups in Nigeria. He currently works at Sales Factorial Consulting, a one-stop-shop agency for product-led sales. With his diverse skills in product management, technical sales, and IT recruitment both in the Tech and Oil and Gas industries. Ayorinde has overseen 10 projects and managed over 500 high-ticket clients in the last 7 years. Combining two industries in which he has passion: tech startups and sales, Ayorinde is open to collaboration and opportunities in product distribution, lead generation, B2B sales content development, tech sales team coaching, and corporate LinkedIn page optimization.

June 2, 2023
Top Tools for Early-Stage SaaS Startups Should Be Investing in Sales Teams Explained
Writer: AYORINDE AJAYI

Customers are the lifeline of every business, and without paying customers, such a venture’s lifespan will be short-lived. This is another reason why SaaS founders should start investing in tools that can help their entire team optimize performance.

Most importantly, the sales and marketing teams should be provided with tools to generate leads, engage, and manage prospects.

Most times, the choice of tools is based on several factors, such as affordability and the kind of targeted customers.

A startup focusing on B2B might find LinkedIn useful for lead generation, social selling, and conversion. While B2C SaaS startups playing with small business owners could find Instagram, Facebook, and WhatsApp channels more useful.

Hence, there are more general top tools that SaaS startup founders should invest in for their sales teams to help them generate more leads, close more deals, and grow the business. A SaaS startup should have access to the following most important tools:

Customer Relationship Management (CRM) Software: Whether small or large, every SaaS organization must have a CRM to better manage customer relationships, acquire new customers, and streamline sales, marketing, and customer support workflows.

Communication: If your SaaS teams don’t properly communicate with each other and amongst themselves, your company will be far from success. Choose a comprehensive communication tool that allows you to send and receive text messages, share files, send and receive meeting notifications, and has other features to improve team communication.

Data: We all know the significance of using data-driven strategies in the SaaS industry. Make it a point to provide your teams with accurate B2B data and insights for target audiences. Data helps increase personalization, campaign customization, sales and marketing alignment, and offers several other benefits.

Email and/or WhatsApp marketing: The ROI for email marketing can be as high as 4,400%. Choose an email marketing (or WhatsApp automation) tool that enables you to create, optimize, and personalize emails without having to break the bank.

Analytics: SaaS companies need to keep track of their product usage, customer base growth, advertising ROI, sales and marketing campaigns, churn rate, monthly recurring revenue, and other metrics. They may need to have access to one or more analytics tools or a single tool that can track and analyze all of their KPIs, metrics, and measurements.

Sales Intelligence Tools: Sales intelligence tools provide sales teams with real-time data on prospects, competitors, and industry trends. This helps sales reps make more informed decisions and target their efforts more effectively.

Sales Automation Tools: Sales automation tools streamline the sales process by automating tasks such as lead nurturing, follow-up, and data entry. This enables sales teams to focus on high-value activities that drive revenue.

Social Media Management Tools: Social media management tools enable sales teams to manage their social media presence more effectively. They make it easier to schedule posts, monitor engagement, and track analytics.

Sales enablement tools: Sales enablement tools can help you empower your sales team with the right tools and resources to close deals.

Other categories of tools are:
- Documentation: Notion
- User Behaviour: Hotjar
- Scheduling meeting = Calendly
- B2B Content and Copywriting: Grammarly
- Video Marketing: Loom or Sendspark
Investing in these tools can help B2B startup founders provide their sales teams with the arsenal they need to be more productive, effective, and successful.

About the Writer:

Ayorinde Ajayi is a tech product sales specialist and consultant for B2B and B2C startups in Nigeria. He currently works at Sales Factorial Consulting, a one-stop-shop agency for product-led sales. With his diverse skills in product management, technical sales, and IT recruitment both in the Tech and Oil and Gas industries. Ayorinde has overseen 10 projects and managed over 500 high-ticket clients in the last 7 years.
June 5, 2023
The Recipe for Startup Success: Lessons from Hilda Bassey’s Guinness World Record-Breaking Cookathon

By: AYORINDE AJAYI

For first-time tech startup founders in Nigeria, the journey to success can be both exhilarating and daunting. Many tech entrepreneurs are under the misconception that a unique and groundbreaking idea alone is enough to ensure product success.

However, the reality is that building a thriving startup requires much more than novelty.

In this blog post, we will explore why product success hinges on a high-performing team, a focus on solving significant pain points, and the power of a community of early adopters, drawing inspiration from Hilda Bassey‘s Guinness World Record-breaking cookathon.

1. The Power of a High-Performing Team

Behind every successful startup is a high-performing team. While a visionary founder is essential, they cannot do it all alone. Building a capable and cohesive team is crucial for executing ideas and overcoming challenges. Each team member brings unique skills and perspectives that contribute to the success of the product.

In Nigeria’s competitive startup landscape, a strong team can help navigate the complexities of the market, adapt quickly to changing circumstances, and collaborate effectively to deliver high-quality solutions.

By fostering a culture of trust, accountability, and continuous learning, startup founders can maximize their team’s potential and propel their product forward.

2. Solving Major Pain Points

While a novel idea can capture attention, it is solving significant pain points that truly drives product success.

Understanding the needs and challenges of your target audience is vital for building a product that resonates with them. By addressing real problems and offering valuable solutions, startups can create a strong value proposition that sets them apart from competitors.

In Nigeria, a country with diverse and unique challenges, startups that focus on solving major pain points have a higher chance of gaining traction. By conducting thorough market research, gathering customer feedback, and iterating on their products, founders can fine-tune their offerings to deliver real value and attract a loyal user base.

3. The Power of Early Adopters and Community

No startup can thrive in isolation. Building a community of early adopters who share a belief in your vision can be a game-changer. These passionate individuals act as advocates, spread the word about your product, and provide invaluable feedback for improvement. They form the foundation of your user base and help create buzz around your startup.

Hilda Bassey’s cookathon is a perfect example of the power of community. By rallying people around her vision and intention to showcase her culinary skills and break a world record, she not only gained widespread attention but also created a passionate community that supported and believed in her cause.

For startup founders, engaging early adopters through targeted marketing, social media campaigns, and community events can help create a sense of belonging and loyalty. By actively involving your users in the product development process, startups can build a dedicated user base that acts as a catalyst for growth and success.

Conclusion

To all first-time tech startup founders, it is essential to recognize that product success is not solely dependent on how groundbreaking your idea is. While a unique concept may grab attention, it takes much more to build a thriving startup.

A high-performing team, a focus on solving significant pain points, and a community of early adopters who share your vision are key ingredients for success.

Drawing inspiration from Hilda Bassey’s Guinness World Record-breaking cookathon, we can see the transformative power of a strong team, her doggedness, and the support of an engaged community. By cultivating these essential elements, startup founders can navigate the challenges ahead and set themselves on the path to remarkable achievements. Remember, success is not just about the idea; it’s about the people and their belief in your vision.

About the Writer:

Ayorinde Ajayi is a tech product sales specialist and consultant for B2B and B2C startups in Nigeria. He currently works at Sales Factorial Consulting, a one-stop-shop agency for product-led sales. With his diverse skills in product management, technical sales, and IT recruitment both in the Tech and Oil and Gas industries. Ayorinde has overseen 10 projects and managed over 500 high-ticket clients in the last 7 years. Combining two industries in which he has passion: tech startups and sales, Ayorinde is open to collaboration and opportunities in product distribution, lead generation, B2B sales content development, tech sales team coaching, and corporate LinkedIn page optimization.

June 3, 2023
Rising Cost of Capital in Nigeria: Survival Strategies for Startups
By: OLIVIA NNOROM

Early this year, the world bank predicted that Nigeria’s economic growth is expected to accelerate slightly to an average annual rate of 3 percent between 2024 and 2025, representing a growth per capita of 0.2 percent in 2023 and 0.4 percent respectively.

However, this is insufficient to mitigate the effect of the existing damage in the country’s economy and financial sector as a whole.

As more Nigerians continue to embrace entrepreneurship, we will likely see more startups springing up by the day. However, given the current macroeconomic trends in the country, starting and running a startup will become more expensive in 2023.

In addition to the start-up related problem where the cost of capital for a startup is typically higher than the cost of capital for a more established company because Investors require a higher return to compensate them for the risks involved, rising cost of capital due to the country’s economic and market situation has become a cause for concern.

Some of the factors contributing to the rising cost of capital include inflation, foreign exchange fluctuations, and high-interest rates.

Inflation is a problem that has plagued the Nigerian economy for many years. It reduces the value of the local currency, raises the cost of goods and services, and has constantly reduced the purchasing power of an increasing Nigerian population. This inflationary pressure makes it more expensive for startups to operate, as they have to pay more for inputs, such as raw materials and labour, which inturn reduces their profit levels.

Foreign exchange fluctuations also pose a significant challenge to Nigerian startups. The country is heavily reliant on imports for many of its goods and services, particularly in the technology sector. When the value of the local currency depreciates against foreign currencies, the cost of these imports increases, making it more expensive for startups to operate.

Although the CBN is finding effective measures to regulate this, It is worthy to note that the country has over time recorded depleting foreign reserves and rising demand for the dollar, which contributed to the naira falling by 6.1% on the official market and by 32% on the black market. This poses a big problem for startups.

High-interest rates are another challenge faced by Nigerian startups. The Central Bank of Nigeria has kept interest rates high in recent years to combat inflation. However, this makes it more expensive for startups to borrow money to finance their operations or expand their businesses.

To this effect, President Tinubu’s administration has pledged to regulate this by reducing the monetary policy rate (MPR) and making borrowing more accessible to Nigerians.

The issue of poor electricity supply increases the cost of capital since businesses resort to spending more on alternative power supply, to access light which is needed for the success of a business.

Also, the government has not made supporting startups a top priority, consequently, there are limited incentive schemes that could potentially fund startup businesses.

All of these factors contribute to the rising cost of capital for Nigerian startups. As a result, many startups struggle to raise the funds they need to grow their businesses and compete in the market. This challenge is particularly acute for early-stage startups that lack a track record and are seen as high-risk investments by lenders and investors.

To navigate these challenges, Nigerian startups are expected to employ more affordable means to fund their startups;
- Creating a scalable business model to attract more investors. This is to say that investors are more attracted to business models that show the potential to increase the revenue with minimal expenditure in the coming months or years.
- Seek alternative financing options such as crowdfunding, grants, and venture capital.
- Identify strategic partners, including angel investors, who can offer relevant expertise and resources while potentially providing funding.
- Explore the growing number of incubators, accelerators, and co-working spaces to access broader funding resources, coaching and mentorship.
- Mitigate foreign exchange risks by seeking to purchase equipments locally, or exploring alternative currency payment options, and try to plan foreign currency payments ahead,
While economic pressures might not be in their control to regulate, Startups in Nigeria should explore various means to initiate and remain in business for as long as they want to be.

They can overcome some of the rising cost of capital challenges they face by increasing scalability of their business, using a more affordable means to access funds and creating the necessary foundation for scaling their businesses sustainably.
June 2, 2023
Lagos Dominates StartupBlink’s 2023 Report Africa Leading Startup Hubs

Nigeria’s startup scene has been making waves globally, with Lagos at the forefront as the leading startup hub in Africa.

Despite facing challenges, Nigeria continues to attract attention and investments, showcasing the potential for growth and innovation in the country.

Lagos’s Dominance in Global Rankings

According to the StartupBlink Global Startup Ecosystem Index 2023, Lagos remains the only African city ranked in the global top 100. While it experienced a slight decrease in its global ranking by one spot to 82nd, Lagos maintains its position as the top city in Western Africa.

Its exceptional performance in Fintech, ranking 38th globally, highlights its influence and potential in this sector.

Nigeria’s Evolving Startup Ecosystem

Nigeria’s startup ecosystem has witnessed significant growth, spurred by a massive consumer market and the rise of innovative companies. Nigeria now leads Africa’s unicorn charts, with companies like Flutterwave and OPay making waves and expanding regionally. The Nigerian Startup Act and initiatives such as the Startup Nigeria incubator and Co-Creation Hub demonstrate the public sector’s recognition of the transformative power of startups in Nigeria’s economy.

Challenges and Opportunities

Despite its successes, Nigeria faces challenges such as a shortage of financing options, low purchasing power, and a disconnect between Lagos and other cities. Infrastructure deficits need to be addressed, and smaller ecosystems require support to nurture talented Nigerian entrepreneurs. The government plays a crucial role in providing the necessary resources and fostering a conducive environment for startups to thrive.

Notable Startups and Ecosystem Champions:

Several notable startups have emerged from Nigeria’s thriving ecosystem. Flutterwave, a fintech company providing payment infrastructure across Africa, has achieved unicorn status. OPay offers smart financial services, empowering users to do more with their money. TradeDepot, a B2B e-commerce and embedded finance platform, connects SME retailers with a broad range of consumer goods. Jumia Group, a consumer goods e-commerce retail platform, has also made significant strides.

Looking Ahead

Nigeria’s startup ecosystem has gained international recognition, and with its success stories, the country has the potential to solidify Lagos as the top regional hub. However, addressing infrastructure deficits, improving financing options, and fostering collaboration between cities are crucial for sustained growth.

The government, alongside support organizations like Lagos Angel Network, Growth Capital Fund, Ventures Platform, and Greenhouse Capital, must continue to provide funding and resources to empower Nigerian startups.

Conclusion

Nigeria’s startup ecosystem, led by Lagos, has become a force to reckon with in Africa. As Nigeria attracts investments and recognition, it holds immense potential for innovation, entrepreneurship, and economic transformation.

With continued government support, increased access to financing, and efforts to bridge the gap between Lagos and other cities, Nigeria’s startup ecosystem can thrive, creating opportunities for talented entrepreneurs and propelling the country’s growth in the global startup landscape.

June 1, 2023
Revealed! Africa’s Top Gainers, Losers in StartupBlink Startup 2023 Report

The recently released StartupBlink Global Startup Ecosystem Index 2023 provides valuable insights into the performance and momentum of various countries’ startup ecosystems.

Delving into the country rankings, we’d be highlighting the countries that experienced positive momentum and those that faced declines. Understanding these trends can offer valuable insights into the evolving global startup landscape.

Positive Momentum

1. Mauritius and Senegal

Among the top 100 countries, Mauritius and Senegal showcased the steepest positive momentum, each jumping 10 spots in the rankings. Mauritius, in particular, achieved a significant milestone by becoming the second-highest ranked African country in the Index. Both countries, relatively new additions to the Index, have demonstrated consistent improvement, reflecting their growing startup ecosystems.

2. Middle East & Africa Region

Apart from Mauritius and Senegal, several countries from the Middle East & Africa region displayed noticeable positive momentum. Sri Lanka climbed 7 spots to 83rd globally, while Saudi Arabia and Ecuador advanced 6 spots to 66th and 81st, respectively. Liechtenstein, Ghana, Kuwait, and Uganda also made noteworthy progress, each climbing 5 spots in the rankings.

Declines and Challenges

1. Morocco and Rwanda

Morocco experienced a decline of 14 spots, dropping to 93rd place after a significant increase of 16 spots last year. Similarly, Rwanda fell 11 spots to 95th, registering a 30-spot decline since 2020 and losing its position in the top 10 of the African region. These declines highlight the challenges faced by these countries in maintaining their startup ecosystem momentum.

2. Belarus

Belarus continued to face consistent losses, decreasing another 10 spots to 80th in the rankings, compared to its rank of 63rd in 2020. This decline suggests ongoing challenges for the country’s startup ecosystem.

3. Panama and South Africa

After gaining nine spots between 2020 and 2022, Panama was unable to sustain its positive momentum and ended at 86th in the current rankings. While South Africa’s decline was relatively mild compared to other countries, its four-spot decrease resulted in the exclusion of the African region from the global top 50 rankings.

4. Nigeria

Nigeria, after two years of upward movement in the Index, experienced a drop of three spots to 64th globally. This decline can be attributed to the challenging funding environment faced by Nigerian startups in the past year.

Returning and Absent Countries

1. Uganda

Uganda made a comeback in the Index, securing the 96th spot after a one-year absence. This return highlights Uganda’s efforts to rejuvenate its startup ecosystem and re-establish its presence in the global rankings.

2. Kosovo

Unfortunately, Kosovo dropped out of the global top 100 this year, signaling a setback in the development of its startup ecosystem. It serves as a reminder of the dynamic nature of the rankings and the need for continuous efforts to foster startup growth.

Conclusion

The country rankings provided by StartupBlink Global Startup Ecosystem Index 2023 offer valuable insights into the performance and trends of various startup ecosystems worldwide. While countries like Mauritius, Senegal, and Sri Lanka showcase positive momentum, others face challenges and declines.

These findings underscore the dynamic nature of the startup landscape and the importance of fostering favorable conditions for startup growth. By analyzing these trends, policymakers, entrepreneurs, and stakeholders can identify areas for improvement and make informed decisions to nurture their respective startup ecosystems.

May 31, 2023
There is a Decline of Startup Funding, Insights from StartupBlink Index 2023 Show

The startup funding landscape has experienced a significant decline, according to the latest data from StartupBlink’s Global Startup Ecosystem Index 2023.

After a remarkable year in 2021, global startup funding in 2022 witnessed a substantial drop of over 30%.

This decline, which became more pronounced in the second half of the year, highlights a challenging period for the investment ecosystem. Let’s explore the key findings and implications of this decline in startup funding.

1. Funding Volume and Ticket Size

Crunchbase data reveals that the number of startup funding deals only saw a modest decline of approximately 3%, indicating that the decrease in funding volume was primarily due to a reduction in ticket size. In 2022, the average ticket size dropped from $19.5 million in 2021 to $13.3 million.

This shift emphasizes the importance for founders to prioritize early revenue generation over rapid growth, adapting their strategies to the changing investment climate.

2. Resilience of Early-Stage Investment

Despite the overall decline, angel-seed investments demonstrated resilience in 2022. This indicates that early-stage funding experienced a slight increase, highlighting the significance of supporting startups at their initial stages.

In contrast, late-stage investments suffered a significant 43% year-over-year fall, likely influenced by the decrease in value seen in publicly traded tech companies.

Source: StartupBlink Report

3. Challenging Start to 2023

The true impact of the decline in startup funding becomes apparent when examining the initial numbers for 2023. Crunchbase reports that global funding in the first quarter of 2023 stands at $76 billion, representing a staggering 53% decline compared to the $162 billion recorded in the same period in 2022.

To provide further context, if we exclude the massive investments made in OpenAI and Stripe during Q1 2023, the decrease would reach an even more substantial 63%. These figures indicate that challenging times lie ahead for startups seeking investment.

Implications and Recommendations

1. Adapt Funding Strategies

Startups should adjust their funding strategies in response to the declining investment landscape. Prioritize revenue generation, showcase the viability of your business model, and demonstrate the ability to achieve sustainable growth. Investors are likely to focus more on early revenue and profitability.

2. Focus on Early-Stage Funding

Considering the resilience of angel-seed investments, founders should pay attention to securing funding at the early stages of their startup’s development. Seek out angel investors, incubators, and accelerators that specialize in supporting early-stage startups, as they may be more inclined to invest in promising ventures.

3. Diversify Funding Sources

Reduced availability of traditional venture capital funding necessitates exploring alternative sources of capital.

Consider crowdfunding platforms, strategic partnerships, government grants, or industry-specific funds. Diversifying funding sources can increase the chances of securing investment during challenging times.

4. Emphasize Value Proposition and Traction

In a more cautious investment climate, clearly articulate your startup’s value proposition and highlight any traction, milestones, or customer acquisitions achieved. Investors will be seeking ventures that have demonstrated market validation and a strong value proposition.

Conclusion

The decline in startup funding as reported by StartupBlink’s Global Startup Ecosystem Index 2023 indicates a challenging period for entrepreneurs seeking investment.

With a substantial drop in funding volume and ticket sizes, founders must adapt their strategies, prioritize early revenue generation, and focus on securing early-stage investments. By emphasizing their value proposition, showcasing traction, and exploring alternative funding sources, startups can navigate these tough times and position themselves for future success.

May 31, 2023
BII and Stanbic Bank Kenya Commit to Sun King’s $130m Funding Round
- BII & Stanbic Bank Kenya in double commitment to off-grid solar energy company Sun King with a $20m facility to boost Kenya’s off-grid solar energy
- Both commitments are entirely Kenyan-Shilling-denominated
- Backing affordable solar home and business systems in underservedcommunities
- Facilities expand clean, affordable, and modern energy throughout Kenya
- The Investment marks BII’s third funding round with Sun King
British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, and Stanbic Bank Kenya (“Stanbic”), a member of the Standard Bank Group, have made commitment to Sun King, a leading off-grid solar energy company, through a $130 million funding round and a joint $20 million working capital facility.

Targeting further expansion, Sun King is backed by prominent DFIs and commercial lenders, including Absa, BII, FMO, Norfund, Stanbic Bank Kenya, the Trade and Development Bank (TDB), and Citi.

These two complementary commitments will enable the purchase of more inventory such as solar home systems and solar lanterns, and facilitate customers’ access to new solar products via credit, securitised and funded by investors – catalysing company growth.

To date, Sun King has powered the lives of over 100 million people. These investments will accelerate Sun King’s ability to equip more Kenyan households and businesses with green, reliable and modern energy.

The entirely Kenyan-Shilling-denominated securitisation deal provides a $130 million capital boost to Kenya’s off-grid solar energy sector and leverages Sun King’s share of the market – extending access to pay-as-you-go solar home systems and energy efficient equipment for underserved customers across the country.

Approximately half of Sun King’s registered pay-as-you-go customers in Kenya are women, most of whom access formal financing products for the first time.

Providing an additional $20 million working capital facility to support Sun King, BII and Stanbic maximise the company’s capacity to deliver more high-quality affordable products to an underserved market with rising demand.

Sun King designs, distributes, installs and finances modern solar energy solutions for individuals, households and businesses who cannot access, rely on, or afford traditional electric grid connections.

In Kenya, three out of every ten Kenyans live without access to electricity. The facility will allow Kenyan households and businesses to transition to clean, reliable and affordable solar energy and appliances.

Growing with early-stage funding provided by DFIs, including BII, Sun King is the world’s largest off-grid solar energy company.

In 2022, the company closed a $330 million Series D equity round of funding, with participation from private equity investors General Atlantic, M&G and Leapfrog.

Over the years, as Sun King’s reach has expanded, BII and Stanbic Bank Kenya’s financing has evolved in tandem, adopting a flexible, patient, and long-term approach to lending.

Anish Thakkar, Co-Founder, Sun King said: “For many years, British International Investment and Stanbic have been invaluable partners in Sun King’s mission to equip underserved consumers with clean, renewable energy. Today, one in five Kenyans use Sun King products for light and power. British International Investment and Stanbic’s investment propels us forward, allowing Sun King to meet the ever-evolving energy demands of Kenyan customers and to better serve those overlooked by traditional energy systems.”

Geoffrey Manley, Head of Energy Access and Efficiency, BII, said:

“Once again, we are proud to support Sun King and are delighted to participate in BII’s third funding round to the company. Alongside other investors, we reinforce our shared commitment to mobilise climate finance, boost energy access and improve the quality of life of Kenyan households. These complimentary commitments bring more solar home systems to those living with no or limited access to traditional energy sources – supplying energy efficient solutions while unlocking more commercial capital to advance the development of the market.”

Rentia van Tonder, Global Head of Power, Standard Bank said:

“Africa is well positioned to benefit from the green economy, and we are proud to have partnered with Sun King to facilitate this landmark transaction. It is another demonstration of the Standard Bank Group’s ongoing commitment to drive sustainable growth in Africa’s renewable energy sector. Our clients are looking at transitioning to net zero and fast-tracking renewable energy as a key value proposition, and as such we have prioritised sustainable finance as a way to unlock growth across African economies. As the largest bank on the continent, we have the local knowledge and a good opportunity to play a leading role to realise the possibilities presented by Africa’s longer-term structural trends.”

The joint commitment contributes to several of the United Nations’ Sustainable Development Goals (SDGs), including Affordable and Clean Energy (SDG 7), Climate Action (SDG 13) Decent Work and Economic Growth (SDG 8), Social Inclusion (SDG 10) and qualifies as part of BII’s contribution to the 2X Challenge.

Watch:
May 31, 2023
Mastering Market Research and Competitive Analysis: Techniques for Startup Success

Market research and competitive analysis play a vital role in shaping a startup’s strategy and positioning its product or service for success.

By understanding the market landscape, identifying target markets, and analyzing competitors, entrepreneurs can make informed decisions and effectively differentiate themselves in a crowded marketplace.

It is therefore essential to understand the techniques and best practices to enable your startup gain optimal growth.

1. Define Your Research Objectives

Start by clearly defining the goals and objectives of your market research. Determine the specific questions you need to answer and the information you seek to gather. This will guide your research efforts and ensure that you focus on gathering relevant and actionable data.

2. Conduct Primary and Secondary Research

Primary research involves collecting data directly from potential customers, industry experts, and stakeholders through methods like surveys, interviews, or focus groups. Secondary research involves gathering existing data from reliable sources such as industry reports, government publications, or market research databases. Utilize both primary and secondary research to gain comprehensive insights into your target market.

3. Identify Target Markets

Segment your target market based on demographics, psychographics, geographic location, or other relevant factors. Understand their needs, preferences, and pain points. Analyze market trends, growth potential, and potential barriers to entry. This deep understanding of your target market will enable you to tailor your product or service to their specific needs and preferences.

4. Analyze Competitors

Identify your direct and indirect competitors within the market. Analyze their offerings, pricing strategies, target audience, marketing tactics, and unique selling points. Use tools like SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to assess their strengths and weaknesses relative to your own startup.

Identify gaps or areas where you can differentiate and position your product or service effectively.

5. Conduct Competitive Landscape Analysis

Analyze the overall competitive landscape to understand the dynamics and market share of various players. Identify emerging trends, potential disruptors, and any regulatory or technological factors that may impact the industry. This analysis will help you anticipate market shifts, identify untapped opportunities, and adjust your strategy accordingly.

6. Position Your Product or Service

Based on your market research and competitive analysis, position your startup’s product or service effectively. Define your unique value proposition, highlighting the key features, benefits, and competitive advantages. Clearly communicate why your offering stands out and how it addresses the needs and pain points of your target market. Develop a compelling positioning statement that differentiates your startup from the competition.

7. Continuously Monitor and Adapt

Market research and competitive analysis are ongoing processes. Continuously monitor market trends, customer preferences, and competitors’ activities. Stay updated on industry developments, technological advancements, and shifts in consumer behavior. Regularly revisit and refine your market research to ensure your startup remains agile and responsive to market changes.

8. Leverage Technology and Tools

Take advantage of market research tools, analytics platforms, and data visualization software to streamline your research process and gain meaningful insights. Use social media monitoring tools to track conversations and sentiment around your industry, competitors, and target audience. These technological tools can provide valuable data and automate certain aspects of your research.

Conclusion

Market research and competitive analysis are invaluable for startups looking to navigate the dynamic business landscape. Market research is an ongoing process that requires continuous monitoring and adaptation; so, embrace it as a strategic tool to guide your startup’s growth and success.

May 30, 2023
Startups: Techniques and Strategies for Idea Generation and Validation

Innovation is the lifeblood of startups, and the ability to generate and validate innovative ideas is crucial for their success.

However, the process of idea generation and validation can be challenging and uncertain, but there are various techniques and strategies that can help startup founders and entrepreneurs unleash their creativity, generate unique ideas, and effectively validate their viability in the market:

1. Embrace Design Thinking

Design thinking is a human-centered approach that encourages empathy, experimentation, and iteration. Start by understanding the needs and pain points of your target audience. Conduct user research, interviews, and observations to gain insights and identify opportunities for innovation. This empathetic understanding will fuel idea generation and increase the chances of creating solutions that truly resonate with users.

2. Encourage Cross-Disciplinary Collaboration

Promote collaboration and diversity of perspectives within your startup team. Encourage individuals from different backgrounds, expertise, and skill sets to come together and brainstorm ideas. This cross-pollination of ideas often leads to fresh insights and unique solutions. Consider organizing ideation sessions or workshops where team members can share their thoughts and collaborate in a structured manner.

Source: Pixabay

3. Harness the Power of Brainstorming

Brainstorming is a classic technique for generating ideas. Create a safe and non-judgmental space where team members can freely express their thoughts and ideas. Set clear goals, use visual aids or mind maps to stimulate creativity, and encourage quantity over quality at the initial stage. Build upon each other’s ideas and allow for wild, out-of-the-box thinking. Later, you can refine and evaluate the ideas for feasibility.

4. Seek Inspiration from Different Industries

Look beyond your industry for inspiration. Explore successful startups, established companies, and even completely unrelated fields. Analyze their approaches, business models, and product offerings to identify patterns and potential opportunities. By adopting ideas from diverse industries, you can bring fresh perspectives and disrupt existing markets.

5. Prototype and Test

Prototyping and testing your ideas early in the process can provide valuable insights and validate their viability. Create low-fidelity prototypes or Minimum Viable Products (MVPs) to gather feedback from potential users. Conduct usability tests, interviews, or surveys to understand their needs, preferences, and pain points.

Iterate and refine your ideas based on the feedback received, ensuring that your solutions truly address market demands.

6. Conduct Market Research

Thorough market research is essential to validate the demand and viability of your ideas. Identify your target market, understand their behavior, preferences, and existing solutions. Analyze competitors to identify gaps or areas where you can differentiate your product or service. Use market research tools, customer surveys, and data analysis to gather insights and make informed decisions about the potential market fit for your ideas.

7. Build a Network of Mentors and Advisors

Surround yourself with experienced mentors, advisors, and industry experts who can provide guidance and support throughout the idea generation and validation process. Seek their feedback, tap into their expertise, and leverage their networks. Their insights can help you refine your ideas, identify blind spots, and increase your chances of success.

Conclusion

Idea generation and validation are critical steps in the startup journey. The need for entrepreneurs to unlock their creative potential and validate their ideas effectively is key. Remember, innovation requires an open mind, persistence, and a willingness to learn and adapt. So, let your imagination soar, test your ideas, and refine them based on user feedback to bring truly innovative solutions to the market.

May 29, 2023
Buhari’s Administration: A Review of 12 Policies that Impacted Startups

The Nigerian startup ecosystem has witnessed significant growth and innovation over the past eight years, with young entrepreneurs and innovators launching businesses to solve local challenges and contribute to economic development.

However, the success of startups is often influenced by various external factors, including government policies.

During President Muhammadu Buhari’s administration, several government policies have had a substantial impact on startups, with one of the most notable being the cryptocurrency ban imposed by the Central Bank of Nigeria (CBN).

Taking a retrospective look at the positive and negative impact of these policies that have shaped the startup landscape in Nigeria, let’s do a quick review:

1. Cryptocurrency Ban

In February 2021, the Central Bank of Nigeria (CBN) issued a directive banning regulated financial institutions from providing services to cryptocurrency exchanges. The ban affected the cryptocurrency market in Nigeria and raised concerns within the startup ecosystem.

Many startups operating in the crypto space had to adjust their business models or explore alternative solutions. The long-term impact of this policy on startups and the overall cryptocurrency ecosystem is still unfolding.

The ban limited the ability for Nigerian startups and individuals involved in the cryptocurrency ecosystem, to access banking services and affected their ability to conduct business effectively.

2. Foreign Exchange (FX) Restriction

The CBN also implemented various policies to restrict access to foreign exchange. These policies aim to preserve the country’s foreign reserves, but they have negatively impacted startups that rely on imports or require foreign currency for business operations.

Limited access to foreign exchange has led to increased costs, supply chain disruptions, and reduced competitiveness for Nigerian startups.

3. Cashless Policy and Naira Redesign

The CBN introduced a cashless policy to encourage electronic transactions and reduce the use of cash in the economy.

While this policy promotes transparency and financial inclusion, it has posed challenges for startups, particularly those operating in rural areas with limited access to digital payment infrastructure. Some startups have had to invest in costly payment systems or adapt their business models to cater to cash-based transactions.

On the other hand, the redesign of the Nigerian naira currency had a direct impact on startups and individuals generally.

The new currency design, aimed to enhance security features, improve durability, and increase naira value. While the redesign itself did not have a significant effect on startups, the broader economic factors surrounding the currency, such as inflation and exchange rate fluctuations, directly impacted startups’ operations.

4. High Interest Rates

The CBN has maintained high-interest rates in an attempt to control inflation and stabilize the Nigerian currency. However, these high rates make it more difficult for startups to access affordable credit, limiting their growth and investment opportunities.

5. Multiple Exchange Rates

Nigeria operates multiple exchange rates, including the official exchange rate, the parallel market rate, and the Investors’ and Exporters’ (I&E) window rate.

This creates uncertainty and a lack of transparency in the foreign exchange market, making it challenging for startups to plan and manage their finances effectively.

6. Loan-to-Deposit Ratio (LDR) Policy

The CBN implemented the LDR policy, which requires banks to maintain a minimum loan-to-deposit ratio. While this policy aims to stimulate lending to the real sector, it has led to increased lending to low-risk sectors, such as government securities, rather than startups and small businesses. This has limited access to financing for startups in need of capital.

7. Tax Incentives and Support Programs

The Nigerian government recognized the importance of startups in driving economic growth and job creation, leading to the implementation of tax incentives and support programs.

In recent years, initiatives such as the Pioneer Status Incentive (PSI) have provided tax holidays and exemptions for qualifying startups, reducing their financial burden during the early stages. These incentives have encouraged investment and fostered an environment conducive to startup growth.

8. Ease of Doing Business Reforms

In an effort to enhance the ease of doing business in Nigeria, the government introduced several reforms that aimed to simplify bureaucratic processes and reduce regulatory bottlenecks.

Initiatives like the Presidential Enabling Business Environment Council (PEBEC) set up by President Muhammadu Buhari in 2016 and the introduction of the Nigerian Single Window for Trade have streamlined procedures, making it easier for startups to register their businesses, obtain licenses, and access necessary permits.

These reforms have positively impacted the overall startup ecosystem by reducing red tape and improving efficiency.

9. Intellectual Property Rights Protection

Protection of intellectual property (IP) rights is crucial for startups that heavily rely on innovation and technological advancements.

The Nigerian government has taken steps to strengthen IP protection through legislation and improved enforcement.

The introduction of the Trademarks Act and the Copyright Act amendments has provided startups with legal frameworks to safeguard their innovations and creative works, fostering an environment that encourages innovation and investment.

10. Access to Funding and Investment

Access to funding remains a significant challenge for startups in Nigeria. Recognizing this, the government has initiated various programs to address the funding gap. The establishment of the Development Bank of Nigeria (DBN), and the creation of intervention funds for sectors like agriculture and technology have increased the availability of financing options for startups. Additionally, government-backed investment platforms like the Nigerian Investment Promotion Commission (NIPC) have attracted foreign direct investment (FDI) into the startup ecosystem, providing startups with additional funding opportunities.

11. Nigeria Startup Act

On October 11, 2022, the President, Muhammadu Buhari signed into Law, the Nigeria Startup Bill (NSB), developed by the administration to provide stable legal framework and incentives for technology innovation.

The NSA was an Executive Bill, initiated by both the Office of the Chief of Staff and the Office of the Minister of Communications & Digital Economy.

The development aims to reduce bureaucratic and funding barriers and has been long-awaited by the burgeoning tech startup ecosystem.

According to the Nigerian Startup Ecosystem Report 2022, there were at least 481 active startups with 19,334 employees across the country by August 2022.

An interesting fact is that 173 (36%) of these startups are in ﬁntech. Other sectors presented include e-commerce & retail, e-health, ed-tech, mobility & logistics, recruitment & HR, agritech, entertainment, marketing, energy, prop-tech, legal-tech, waste management, auto-tech, events and printing.

Expert believe that with the Nigeria Startup Act Nigeria is headed in the right direction as a nation

Mohammed Ibrahim Jega, Founder, of Startup Arewa, told TechEconomy:

“The Act tends to focus on providing more access to startups to grow and scale”.

He said the sections that describe the Startup Portal, Incentives, Regulatory Support from NITDA, etc., clearly indicate a forward-thinking approach to regulation in Nigeria.

12. National Blockchain Policy

In a bid to fast track the adoption and utilise the gains of emerging technologies, the Federal Government of Nigeria, few weeks back, launched a National Policy on Blockchain Technology and inaugurated Implementation & Steering Committee to oversee its implementation.

The policy, which was launched by the Minister of Communications and Digital Economy, Professor Isa Ali Ibrahim (Pantami), is to promote the adoption of blockchain technology in Nigeria and to position the country as a leading player in the global blockchain ecosystem.

While launching the Policy on behalf of Federal Government of Nigeria, Professor Pantami recalled that the journey of Blockchain Technology officially started in Nigeria on 28th November, 2019 at the International Conference Centre, Abuja where President Muhammadu Buhari unveiled and launched the National Digital Economy Policy & Strategy (NDEPS) for a Digital Nigeria.

Conclusion

Government policies play a critical role in shaping the startup ecosystem in Nigeria. While several policies have positively impacted startups by providing tax incentives, streamlining processes, and enhancing IP protection, challenges related to funding, infrastructure, and power supply persist.

Continuous collaboration between the government, private sector, and startups is essential to address these challenges, ensuring a conducive environment for entrepreneurial growth and innovation. By implementing targeted policies, Nigeria can further accelerate the development of its startup ecosystem, fueling economic progress and job creation.

While some government policies and regulations are aimed at maintaining financial stability and promoting economic growth, the impact on startups in Nigeria has been mixed.

The cryptocurrency bans and other CBN policies, such as foreign exchange restrictions and high-interest rates, have created significant challenges for startups.

May 27, 2023
Twitter Announces New API for Developer Startups at $5000 Per Month

Byline; Olivia Nnorom

Twitter has yet again announced a new API (Application programming interface) tier, Twitter API Pro for startups at $5,000 per month, which gives developers the ability to fetch 1 million tweets per month, post 300,000 tweets per month, and access the full archive search end-point.

Addressing startups looking to scale their businesses on Thursday, 25th, May, 2023, Twitter dev tweeted, “Experiment, build, and scale your business with 1M Tweets per month, including our powerful real-time Filtered/Stream and Full Archive Search endpoints. We look forward to seeing what you build next.”

This came weeks after the company announced that it would be shutting down access to its free API tier. However, it somewhat backtracked on that decision by providing free access to 1,500 tweets per month for content provider bots.

In terms of the new API, startups would pay between the $100 per month Basic tier and the $42,000 per month Enterprise tier.

Although many users consider this a welcome development, they registered their dissatisfaction at the cost, which they explained as highly expensive for most startups who the program was aimed to serve.

When Twitter announced the new pricing, many developers and founders argued that the company should introduce a middle tier between Basic and Enterprise for startups that can’t afford the roughly half a million dollars a year.

The new Pro API tier will cater to some of those people, but won’t be a solution for businesses that run on a tight budget as they still have to pay $60,000 per year. For example, this new posting limit on the Pro tier may be sufficient for some bots, but it will be harder for developers to raise funds through subscriptions or donations to keep the service going long-term.

May 26, 2023
NIGERIA: Meet Daniel Oseni who Invented Cooling System for Tomato Farmers (Video)

As a boy growing up in an average African home, Daniel Oseni was exposed to various African dishes prepared with tomatoes.

Baskets of tomatoes…fresh from the farm

In his words, “Purchasing these tomatoes was a nightmare because they easily got spoilt because the sellers didn’t have a proper preservation and storage system.”

Interestingly, Nigeria is the 14th largest tomato producer in the world, and the 2nd in Africa; producing more than 2.3 million tonnes every year.

Unfortunately, the country spends more than $9.8 billion on importing tomatoes because it doesn’t meet the demand for fresh produce.

In previous years, Nigeria has experienced more than 56 percent of waste due to a lack of proper storage and preservation facilities.

To solve this problem, Daniel Oseni founded PeriPES, a natural cooling system that preserves and stores tomatoes for up to 3 to 4 months without getting spoilt. PeriPES is made out of clay bricks, sand water, and air. It works by reducing the room temperature of the tomatoes to less than 15°C at 90 percent humidity, in order to stop the production of ethylene, which is the major chemical component that causes ripening and spoilage in all agricultural products.

In his words, “Our technological input is harnessing the power of nature to preserve. This science is known as evaporative cooling. It is a circular movement of moist air from a cooler region to a hotter region, by passing through a damp sand medium. It is a very viable and stable means of preservation because it creates a conducive humidity for the tomatoes, which helps to retain the nutritional value.”

Daniel believes that tomato farmers, wholesalers, and retailers in Nigeria will benefit from his solution. His primary target is those in the “Shasha” market located in the Ondo state of Western Nigeria. This market is one of the biggest markets for tomatoes in the Southwestern region of the country.

Daniel believes that if he is successful, the world will be better off because “PeriPES will reduce the carbon footprint being released into the atmosphere every day. It will reduce post-harvest loss by over 50 percent, and reduce the scarcity of tomatoes, which usually leads to the inflation of the tomato prices.”

He believes that PeriPES will ensure the availability of tomatoes all year round, and will subsequently increase the GDP of the Nigerian economy.

Recently, Daniel Oseni emerged as the grand prize winner of the 2023 Savvy Prize for Impact-Driven Entrepreneurs.

When asked how the Savvy Prize will help his project become successful, he said,

“With our passion and resilience, we will replicate our solution to 8 other Nigerian states that are major producers of tomatoes. We will ensure that PeriPES will reach other crop farmers that are vegetable and fruit farming, such as pepper, onion, okra, carrot, cucumber, and cabbage. In the long run, we will save the agricultural sector of the Nigerian economy by reducing the waste coming out by over 50 percent.”

Daniel and his team will also focus on increasing their visibility by 45 to 80 percent, for more productivity and profitability. After receiving the Savvy Prize, he is looking for more investment opportunities in order to expand.

Daniel’s vision is a Nigeria where “the prize of tomatoes is normalized, and when PeriPES reaches the hands of over 75 percent of tomato farmers in the country.” He envisioned a country where tomatoes are available all year round without abnormal increase in prices, and when the tomato market becomes well saturated.”

Daniel’s team is made up of Robinson Osas, Ogunlade Busayo, and Omoniyi Joshua. Osas is an agriculturist with a specialization in crop, soil, and pest management. Busayo is a bio-medical scientist with experience in crop health services and waste management, while Joshua is an Architect with experience in social media management.

Daniel believes his team is the right fit to solve this problem because they’re innovative and creative individuals with experience and knowledge in preservation, storage, and food handling.

Watch Daniel Oseni explain how the cooling system works:

May 26, 2023
TymeBank Closes $77.8mn Pre-Series C Round Led by Norrsken22 & Blue Earth Capital

Having raised $77.8 million in a pre-Series C round which takes its total investment raised so far to over $260 million, TymeBank, a South African digital banking firm, is set to strengthen and expand current reach.

Led by Norrsken22, an African-focused growth stage fund and Blue Earth Capital, a Swiss global impact investment firm, TymeBank will now broaden its South Africa and Philippines operations, while stepping into Southeast Asia.

Other investors backing TymeBank include Tencent, who is now the firm’s third-largest shareholder, African Rainbow Capital (ARC), British International Investment (BII), Apis Growth Fund II, JG Summit Holdings (JG Summit), African Fig Tree (AFT), and the Ethos AI Fund.

An arm of Tyme Group, headquartered in Singapore, TymeBank was launched in 2019 by Founder Coen Jocker. TymeBank embraces a unique banking approach that combines the benefits of both digital and physical services. It provides customers with a transactional bank account that incurs minimal or zero monthly fees, along with an appealing savings product.

The majority of its customer base is acquired through physical locations, which include renowned national retailers such as Pick n Pay and Boxer, as well as the esteemed fashion retailer, The Foschini Group (TFG), and the influential Zion Christian Church, one of South Africa’s largest religious institutions. However, TymeBank has also experienced a substantial influx of customers who have opened accounts online, reflecting a growing trend toward electronic transfers over traditional cash deposits.

TymeBank is making significant strides in its operations, demonstrating impressive growth across South Africa and the Philippines. With a remarkable influx of 300,000 new customers each month, the company is achieving a revenue run rate surpassing $100 million annually.

This exponential rise in customer numbers serves as a testament to TymeBank’s ability to effectively address consumers’ needs. Initially emerging as a disruptor in the banking industry, the company has now solidified its position as a reliable and viable alternative to traditional banks in the country.

TymeBank’s global presence extends beyond its core operations. It maintains a product development and engineering hub in Vietnam, where innovative solutions are crafted. Additionally, its headquarters in Singapore oversees strategic initiatives, business development, data analytics, and artificial intelligence (AI) functions, further cementing its commitment to driving growth and leveraging cutting-edge technologies in the financial sector.

May 23, 2023
FSD Africa £1 million in Africa Climate Ventures

…The investment represents the first institutional backing for the venture builder, which aims to assemble a portfolio of businesses focused on climate action across Africa, boosting continental participation in global carbon markets.

FSD Africa Investments (FSDAi) has invested £1 million in Africa Climate Ventures (ACV), a pioneering venture builder working to build a US$45 million portfolio by the end of 2024.

ACV will catalyse the carbon asset class in Africa by building innovative businesses focused on solving our generation’s greatest challenge and at the same time capturing a significant share of global carbon markets in Africa.

The venture represents a series of “firsts” in Africa: from its entirely Africa-based founder team and its permanent capital structure based in Kigali International Financial Centre, to its exclusive focus on carbon mitigation, capture and removal, the continent’s fastest evolving sector.

ACV represents a historic evolution in Africa’s carbon ecosystem and will contribute directly to capital mobilisation in climate action. Indeed, by 2030 ACV aims to eliminate one million tonnes of carbon every year while improving the lives of 50 million Africans and creating at least 5,000 jobs on the continent.

The venture builder features a peerless bench of experienced Africa-based founders with a record of pioneering innovation on the continent and championing disruptive enterprises.

James Mwangi is a 2022 Climate Breakthrough Award Winner and the founder of the Climate Action Platform for Africa, a non-profit organization that aims to help Africa achieve broad-based economic growth through climate action leadership.

James is best known as a co-founder of Dalberg Advisors, the firm’s first elected Global Managing Partner and then Dalberg Group’s Executive Director.

Mohamed Cassim is a South African investor best known as an angel investor, the Chair of MFS Africa Board, and the Founder of Abacus Advisory. CJ Fonzi was also a Partner at Dalberg Advisors, with the firm for over a decade he served as the Group Director of Innovation and then founded Dalberg’s Rwanda business in 2017.

This team is working to build a portfolio of climate positive businesses across Africa, with the ultimate aim of launching and scaling 15 ventures in the next four years.

ACV is seeking to build this portfolio by investing to:

i) bring proven global climate technology to Africa,

ii) accelerate and de-risk the continental expansion of technologies and business models that have gained traction in one or a few African market(s), and

iii) add carbon revenue streams to existing African businesses with the potential to scale climate positive solutions.

ACV has adopted a structure more in-line with a global north venture studio in which the vehicle is structured as a permanent capital vehicle which sells equity rather than securing fund management mandates.

This has allowed ACV to begin building ventures in parallel with fund raising, which the founders believe is paramount given the urgency of climate change, and the need for Africa to quickly establish itself as part of the solution.

There are already two ventures in the portfolio:

KOKO Networks Rwanda, a co-venture between ACV and KOKO Networks which already provides sustainable bioethanol cooking fuel to over 900,000 Kenyan families and aims to reach a million Rwandan families by 2027, and Great Carbon Valley, a Kenya based developer of direct-use clean energy applications currently focused on developing a direct air capture and permanent carbon storage site in Kenya.

ACV’s pipeline of further opportunities demonstrates the breadth and versatility of the venture builder. They range from biochar and enhanced rock weathering technologies, to biodigester and e-mobility businesses, to harvesting carbon revenue for green growth across the portfolio of a well-established continental private equity fund.

These are businesses and technologies which have the capacity to transform African economies and make a meaningful difference in climate change but they require risk capital and hands on venture builders to scale, attract further investment, and reach their potential.

FSDAi’s investment in ACV takes the form of a convertible loan of £1 million to support the venture builder’s formalisation and build additional ventures as demonstrations to attract investment from larger funds.

On top of this investment, FSD Africa will provide £75,000 in grant funding to support the development of premium carbon credits and the marketing of portfolio and pipeline companies. Moving forward, FSDAi has secured the right to invest up to £8 million in ACV’s planned 2024 close.

FSDAi is the investment arm of specialist financial development agency FSD Africa which receives funding from the UK government and provides tools and resources to drive large-scale change in financial markets and support sustainable economic development.

ACV is the latest in a series of investments by FSDAi in innovative green investment vehicles including Persistent Energy, a leader and pioneer investor in the off-grid energy and e-mobility sectors in Sub-Saharan Africa, and Nithio, which invests in renewable off-grid energy.

FSDAi has committed to support ACV on the basis that its activities will actively contribute to Africa’s transition to net-zero, the promotion and acceleration of the continent’s green sector, and the creation of quality, skilled jobs (around 600 will be created via this initial £1 million investment) in a strategically vital sector.

Ultimately, FSD Africa believes that ACV can help the continent’s businesses participate in global carbon markets and capitalise on the continent’s unrivalled capacity for profitable climate-smart businesses.

Moreover, FSDAi’s investment aligns with the emerging priorities of African policymakers who will gather in Kenya in September at the Africa Climate Summit to co-ordinate a unified, collective pan-African approach to the discussions at the next COP in Dubai.

Anne-Marie Chidzero, CIO of FSD Africa Investments, said:

“In backing the ACV partners, FSDAi sees a tremendous opportunity to galvanise global investment and finance to promote Africa’s status as the pre-eminent climate investment destination.’’

James Mwangi, CEO of Africa Climate Ventures, said: “We are thrilled that FSDAi has joined us in building ACV. The involvement of FSDAi has already been invaluable in refining the ACV model. As we work towards ambitious objectives, we believe FSDAi will be a key partner in ensuring our success.”

Rachel Turner, Director, International Finance, Foreign, Commonwealth & Development Office, said:

“We are excited to be supporting this enterprising partnership between FSD Africa and ACV. The need to mobilise climate finance for Africa has never been greater, and this can’t happen without innovations that can build the pipeline of opportunities to absorb and deploy capital into productive, sustainable and inclusive uses. Tapping into the developing carbon market ecosystem represents a significant opportunity for Africa to raise capital at affordable terms whilst contributing directly to the climate challenge. This partnership with an impressive African team is pioneering in its approach.”

May 23, 2023

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