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Visionaries - May 25, 2022

Here is How these 5 Successful African Entrepreneurs Raised Capital

The most serious challenge facing African entrepreneurs is the lack of capital to start or scale their businesses. This has stifled the growth of many small businesses and killed several business ideas that could have revolutionised the world.

However, to mitigate this challenge, there have been several special funding initiatives by government and private bodies, but due to the information gap, most entrepreneurs are not even aware of these funding opportunities, and in some cases, they don’t know how to maximise them.

In 2015, African businesses got about $276.5 million in startup investment and $366.8 million in 2016. These are just for IT startups.

In 2021, startups across the continent got nearly $4 billion in funding. This is more than twice the amount investors invested in 2020.

Here are some ways these successful African entrepreneurs raised capital to start their businesses.

Lorna Rutto – Leverage grants

African entrepreneurs capital
Source: Lionesses of Africa

Lorna Rutto left her work as a banker in 2010 and founded her own waste recycling company. 

Her company, EcoPost, is a firm that gathers and reprocesses garbage into attractive, durable, and environmentally beneficial fence posts, an alternative to lumber.

However, without the financial backing of foreign and local investors and NGOs, EcoPost would have remained a pipe dream.

After learning about some grants, in 2010, she applied and was awarded a $6,000 SEED Award. She used the SEED to start her firm.

The Enablis Energy Globe-Safaricom Foundation gave her a $12,700 grant in the same year. Also, she won a $12,000 Cartier Women’s Initiative business proposal competition.

Later, her company received a $495,000 equity investment from the Blue Haven Initiative and the Opus Foundation. She used it to expand the company and get recycling equipment.

Jason Njoku – Find a partner who has money

Jason is one of the co-founders of iRokoTV, a standalone video-on-demand platform dedicated to African movies.

Despite being a multibillion-dollar corporation, it began as any other African businesses do: with little or no money.

Without the help of Jason’s friend and business partner Bastian Gotter, the company called iRokotv, fondly called African Netflix, might not exist.

Since then, the company has grown in leaps and bounds and won some grants for the business.

In 2010, Tiger Global made a $3 million series A investment in the firm. The duo also raised $22 million from international venture capitalists. This included Investment AB Kinnevik and RISE Capital.

They have received $40 million in investment funding from international investors, who are venture capitalists.


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Anna Phosa – Grants and banks

Source: African Leadership Magazine

Anna Phosa is also known as the “celebrity pig farmer”. Despite her success story today, she did not have it easy at inception as she lacked the needed finance to start big and expand the company.

In 2004, she started with her $100 personal savings and four little piglets.

Her first break came in 2008. Pick ‘N Pay, a South African grocery giant, hired her to supply ten pigs to its affiliated stores every week. This later increased to twenty pigs every week.

In 2010, the contract increased to supply 100 pigs every week for five years. The agreement was over $1.9 million (R25 million) in value.

This contract made it possible for her to access a loan from ABSA Bank and USAID. She used the capital to purchase a 350-hectare property and expand her farm business.

Ali El-Shafei – Grants

Source: True Africa

Aly El-Shafei is a mechanical engineer and MIT graduate. He created SEMAJIB, a multifunctional magnetic smart bearing that has potential for power generation.

In 2009, he received his first financing.

The European Union’s Research, Development, and Innovation Programme awarded him €240,000. In 2013, he won an Egyptian Science and Technology Development grant worth $100,000.

Also, in 2017, he was given a grant of $100,000 for the Innovation Prize for Africa. The funding was utilised in furthering his innovation and developing an industrial prototype.

Bethlehem Alemu – Family and friends

African entrepreneurs capital
Source: Twitter

Alemu Bethlehem, SoleRebels, is one of the world’s most innovative and fastest-growing African footwear businesses.

The footwear is crafted from recycled materials and sold in over 50 countries, including the United States, Canada, Japan, and Switzerland.

She started the business in 2004. However, her business idea would never have been actualised if not for the $10,000 from family and friends in 2004.

Her success came at the cost of asking for finance from people. Asking others to invest in your ideas, aspirations, vision, or project may be awkward and challenging, but you must do it if you want to have a shot.

The success of SoleRebel gave her the confidence to start another fashion company, Republic of Leather, which sells premium leather accessories.


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