We have no shortage of startup teams across Africa applying themselves fervently towards finding solutions to the real challenges we face, hoping to scratch a local itch that will inadvertently scale due to the shared nature of the problems we have as a continent.
That we do not celebrate failure or at the very least celebrate failing forward has seen us often times tend to ideas and concepts for much longer than we should, leading to stunted operations, subpar products and the ultimate waste in manpower and resources riding off businesses that should have been committed to the dead pool months if not years ago.
Then there is the flip side, where we have teams that have market validation and have carried out that all important bootstrapped pilot and only need capitalization to grow their team, bolster infrastructure and move beyond ramen profitability but yet struggle to lock down capital in spite of the numbers registered, promise shown and proven commitment.
The recent news by Twiga Foods and Flutterwave of their successfully concluded Series A rounds both upwards of $10 million got the local investor circles buzzing, from the angels to the private equity firms. Twiga Foods with $13.3 million raised from 4 rounds with a sprinkling of grant funds, is a Nairobi based business-to-business food supply platform that first figured out how to move banana’s more efficiently and profitably for everyone while Flutterwave with $ 10.17 million raised over 4 Rounds from 10 Investors is a San Francisco headquartered payments infrastructure company making a huge play for Africa. A quick look at the funding organizations reveals a dearth in local participation, which leads to the curious question why, given that smart bets would pay off well.
As we celebrate the potential that such companies represent as they get much needed capitalization to scale, my fear is that we will in the long-term miss out on the larger share of dividends realized. Yes, the services in and of themselves will be hugely beneficial to us as a consumer collective but with their growth and expansion into new markets, not owning a piece of the pie will inadvertently lead to repatriation of profits and capital gains by those who took measured risk in the early stages.
We need to be more intent in marshalling local capital, whether from angel investors, venture capital, private equity or a better structured bourse process that can allow for more people to participate with smaller amounts.