SEATTLE — Capital Finder, a business tool by Allied Crowds, supports trends in African entrepreneurship and small business growth. The tool assists entrepreneurs and micro, small and medium enterprises (MSMEs) in emerging markets with securing capital.
Capital Finder lists available sources of capital in a country by industry and the type of capital available. Capital Finder does not provide funding directly, but shares contact information for each potential funding source. The service is free and offers an ever-growing list of capital options.
Capital Finder has great public service potential, as tech hubs are growing in Africa. As of July 2016, Africa was home to 314 tech hubs. Only a year earlier, the number was 120. Tech hub spaces provide community locations for people to use computers, gain tech skills, network and receive support and resources for startups.
Tech hubs go beyond providing tools in African entrepreneurship; these locations provide a system of access and an environment of innovation that drives emerging markets and new skills.
Entrepreneurship is an important and growing trend in Africa where approximately 10 to 12 million young people join a scarce job market every year.
As many governments fail to address this problem, young Africans are taking matters into their own hands by creating and supporting trends in African entrepreneurship that drive innovation, solve social problems and create jobs.
VC4Africa estimates that in 2015, 70 percent of startups in Africa generated revenue and 40 percent were able to obtain capital. The most successful investment areas in 2015 were industries such as e-commerce and computer software; the most successful of these businesses were located in South Africa, Nigeria and Kenya.
According to Steve Case, investor in African entrepreneurs and co-founder of AOL, “Historically, Africa has been viewed by many as a problem to solve – but now there is a growing recognition [that]it is in fact an opportunity to seize, and entrepreneurs [are]leading the way.”
In 2007, Safaricom, a Kenyan telecom company, released a service called M-PESA (“mobile money”). This service offers Kenyans without traditional bank accounts a means to digitally manage and transfer money. M-PESA gained almost six million customers in two years and marked the first of a series of events in Africa’s tech movement that gave Kenya the nickname “Silicon Savannah.”
Shortly after the arrival of M-PESA, political unrest sparked the creation of Ushahidi, an app intended to track and catalog violence during elections. Ushahidi became globally recognized and served as a springboard for Africa’s tech hub movement. In 2010, the iHub innovation center was founded in Nairobi, Kenya, which began Africa’s movement toward communications technology, entrepreneurship and innovation.
Since the advent of iHub, other African innovation centers have popped up: Bogo Hive in Zambia, CCHub in Nigeria, Hivecolab in Uganda and Meltwater in Ghana. This movement is embraced and propelled by people in their 20s or younger.
The Future of Africa
According to Tech Crunch, African startups received more than $400 million in capital funding in 2014. That figure is expected to grow to more than $608 million in 2018, reaching more than $1 billion total.
Tools such as Capital Finder have an opportunity to push access forward and increase investment on the continent. This is a hopeful projection for Africa’s youth, given that 60 percent of those who are unemployed in sub-Saharan Africa are young people.
Plenty of obstacles remain for African youth and job creation. While the Kenyan government has invested heavily in internet and communications technology, many governments have not. Areas known as dead zones still lack access to electricity and internet service. Young Africans, however, are already moving to address these problems with innovative solutions.
Stay tuned and stay connected. The world is just beginning to see the potential of African entrepreneurship.
– Mandy Otis