financing for tech startups in sub-saharan africa
DESCRIPTION
Presentation done at the 3rd Making Finance Work for Africa conference in Dakar on June 11th. www.mfw4a.comTRANSCRIPT
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CTIC Dakar
Why and How to invest in Tech SMEs in Africa ?
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Pionnier & Ambitieux
1er Incubateur TIC du Sénégal
et d’Afrique Francophone
Lancé en Avril 2011
Modèle économique viable
« Entrepreneurs for Entrepreneurs »
Entrepreneur & Innovant
Initié par l’expertise
d’InfoDev, IFC (World Bank)
et OPTIC et soutenu par
Orange-Sonatel, GIZ, CDE, ADIE, ARTP, SCA…
Org. à but non-lucratif de
la Fondation des Incubateurs
du Sénégal (FICTIS), menée par le secteur privé (OPTIC)
avec le soutien du Gouvernement
Partenaires locaux & internationauxPartenariat Public Privé
Public
Privé
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Why Technology in Africa ?
10% internet penetration rate = 1% GDP
Growth
Impact all sectors of the economy
Finance crucial to develop local high growth
SME >>technology independence
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1. Stop thinking about banks or MFI…
• R&D = Human Resources mostly
• No Revenue before 1 or 2 years
…to finance innovation
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2. Adapt Business Model
• Hybrid models between services and product
250% revenue growth for CTIC Companies
All have one Flagship product (which bring no
money)
• Donors cash is risky for you model
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3. Adapt Equity Model
• Entrepreneurs not “pro-equity” and even less
“pro-exit”
More revenue sharing or dividends rather than
exit at 5 or 7 year
• Almost no exit market anyway (M&A, IPO)
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4. Solutions
• Public Funding for R&D (research grants)
Ex: ARTP-FDSUT – $200,000 Seed Fund for startups
• Co-matching Funds for VC and Business Angels
Ex: in Israel, Mexico, etc.
• Structure Business Angels Community
Ex: Nigerian Ghana and Senegal Need training and outside expertise
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5. Key Role of Intermediaries / trust partners
• Incubators, Accelerators
Never 100% public !
Make them Sustainable
Local Governance is crucial
• Network organizations
AVCA
VC4Africa
Afrilabs, etc
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Yann LE BEUXCatalyst
[email protected]+221 33 889 93 62
Merci.
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