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Top 10 Organizations that finance and fund businesses in Africa
Are you looking for capital to start a new business or grow an already established business in Africa?
Have you tried other alternatives and sources of funding but failed? Is capital your biggest headache and obstacle right now?
Here is a list of top ten prominent organizations that give grants to entrepreneurs and startups:
Seedstars Africa
Seedstars invests in over 65 countries around the world. Seedstars World is a Switzerland-based startup competition that takes place in emerging markets around the world.
Seedstars run about 65 local competitions. The competition is set to identify the best in emerging markets. Competitors are trained on how to best pitch, and the emerged winners are awarded.
Through Seedstars World, its popular, highly competitive and exclusive startup competition for startups in emerging markets, the company can identify promising companies to support with capital and technical help.
In 2019, Argentinian edtech startup Blended was crowned 2019 Seedstars Global Winner at an awards ceremony in Lausanne, Switzerland and was granted up to $500 000 in equity investment.
Tony Elumelu Foundation Entrepreneurship Program
Tony Elumelu Foundation Entrepreneurship Programme (TEEP) is an annual programme of training, funding and mentoring, designed to empower the next generation of African entrepreneurs.
Founded by Mr. Tony Elumelu, the successful Nigerian entrepreneur and philanthropist, the fund seeks to identify and support 1,000 entrepreneurs from across the continent each year over the next decade.
Each successful participant in the program gets an initial seed investment of $5,000 after a 12 –week mentoring program. Another $5,000, structured as equity or an affordable loan, is also given to participants who meet certain milestones.
Over the next 10 years, the fund expects to support 10,000 start-ups and young businesses selected from across Africa who will ultimately create one million new jobs and add $10 billion in annual revenues to Africa’s economy.
The TEEP Fund focuses on citizens and legal residents of all 54 African countries. Applications can be made by any for-profit business based in Africa in existence for less than three years, including new business ideas.
African Women’s Development Fund (AWDF)
The AWDF is the first pan-African women’s grant maker in Africa. Since the start of its operations in 2001, AWDF has provided $17 million in grants to 800 women’s organizations in 42 African countries.
The AWDF is an institutional capacity-building and programme development fund, which aims to help build a culture of learning and partnerships within the African women’s movement. In addition to raising money and awarding grants, the AWDF will attempt to strengthen the organizational capacities of its grantees.
The AWDF only awards grants to organizations, not individuals. It awards grants ranging from $8,000 up to $50,000.
Acumen Fund
Acumen is a charity organisation incorporated in 2001 with seed capital from the Rockefeller Foundation, Cisco Systems Foundation and three individual philanthropists. Unlike most organizations,
Unlike most organizations, Acumen’s investment model is to invest as equity or debt in enterprises, either for-profit or non-profit organizations, that are serving Bottom of Pyramid Markets.
In choosing these organizations, Acumen who is also a member at Nairobi Garage, focuses on companies working on one or more of the five portfolio areas namely water, healthcare, housing, energy and agriculture. It invests not only in the form of financial capital but also its human and knowledge capital through assistance in business areas including business strategy, planning and performance management.
Over the years, Acumen has invested $115 million in 113 companies and has had a successful track record in sourcing and executing investment opportunities in the clean energy, health care and agriculture sectors.
CDC
CDC is the UK’s Development Finance Institution (DFI) wholly owned by the UK Government’s Department for International Development (DFID). It is the world’s oldest DFI with a history of making successful investments in businesses which have become industry leaders.
CDC actively supports businesses throughout Africa and South Asia, and its portfolio of investments is valued at over £2.5bn (year end 2013).
Bill and Melinda Gates Foundation
The Bill & Melinda Gates Foundation is a private foundation founded by billionaire Bill Gates and his wife, Melinda.
The foundation was launched in 2000 and is said to be the largest transparently operated private foundation in the world, with an endowment of $44.3 billion as of December 2014.
The foundation maintains three offices in Africa—in Ethiopia, Nigeria, and South Africa, the countries where it devotes the largest share of its resources and expertise. However, the foundation also has a presence in Kenya, Tanzania, Ghana, Senegal, Zambia, and Burkina Faso.
In 2016, the foundation awarded a grant of $4.48 million to Sidai Africa, a social enterprise operating in the livestock sector in Kenya.
In June 2017, the foundation awarded a $2.4 million grant to Sanergy, an organization that provides hygiene and sanitation solutions to people who live in urban slums.
IFC
The International Finance Corporation, or IFC as it’s commonly known, is a development finance institution and a member of the World Bank Group.
It is the largest global development institution focused exclusively on the private sector in developing regions of the world like Africa.
The IFC has invested more than $25 billion in African businesses and financial institutions, and its current portfolio (in 2017) exceeds $5 billion.
A company or entrepreneur seeking to establish a new venture or expand an existing enterprise can approach IFC directly by submitting an investment proposal to the field office closest to the location of the proposed project.
In 2015, the IFC invested $3 million in Madagascar’s SMTP Group for the expansion of its poultry business in the country.
In 2016, the IFC provided a $7.5 million equity in Zoona, a financial services business that provides in-country and cross-border money transfers in Zambia, Malawi and Mozambique.
Helios Investment Partners
Founded in 2004, Helios Investment Partners is a private equity and venture capital firm that invests in Africa, with a focus on Nigeria, South Africa, and Kenya.
With a fund of $3 billion under management, the firm typically invests between $15 million and $200 million in an individual transaction.
Helios Investment Partners focuses on businesses in telecommunications, media, financial services, power, utilities, travel, leisure, distribution, fast moving consumer goods, logistics, and Agro-allied sectors.
In 2010, Helios invested $92 million in Interswitch, a Nigerian payment services provider. In 2016, the firm invested $10 million in OffGrid Electric, a solar energy company in Tanzania that’s spreading across East Africa. In 2015, Helios Investment Partners also acquired the entire 70 per cent stake in Telkom Kenya held by France Telecom.
Its other investments on the continent include MallforAfrica, Bayport, Equity Bank, GB Foods and several others.
Norfund
Norfund is an investment fund for developing regions of the world, like Africa, and it’s funded by the state budget of Norway.
The fund has three priority sectors it invests in: clean energy, financial institutions, and food & agribusiness. It provides equity and loans as from $4 million, and usually takes a maximum of 35% ownership stake in the businesses it invests in.
The fund was founded in 1997 by the Norwegian government, and by the end of 2016 it had invested up to $1.95 billion in 770 companies in businesses located in developing countries around the world.
In 2016, Norfund gave a $2.2 million loan to Associated Foods, a food processing business in Zimbabwe, to support the company’s efforts to replace food imports with local produce.
In 2017, the fund provided a $2.75 million loan to Nyama World, a beef production company in Malawi that sources, produces, processes and sells beef to the local market.
Norfund also has three local offices in Africa: in Kenya, Mozambique and South Africa.
TL COM Capital
Since its founding in 1999, TLcom Capital LLP has invested and exited leading-edge companies in the TMT sector targeting businesses that address core customer or technology issues in either large established global markets, or in the development of emerging markets with the potential for global scale in the broad TMT domain.
TLCOM Capital who is also a member of Nairobi Garage also runs TLcom TIDE (Technology and Innovation for Developing Economies) Africa Fund which is Africa’s first international venture capital fund focused exclusively on technology enabled services and innovation for Sub Saharan Africa (SSA) across all stages of the venture capital cycle.
The fund focuses on equity investments into fast growth entrepreneurs and companies leveraging technology and innovation to serve the SSA market, with the potential to scale globally and the ability to profitably serve low income customers at the Base of the economic Pyramid (BoP), as this remains the vast majority of consumer demand in the region and in other developing economies.
Conclusion
Getting these finance and funding opportunities, though available, isn’t easy. Although, with the right networks and by being in the right place at the right time makes it easier. Here at Nairobi Garage we believe no man/woman/company is an island. We have seen companies in our coworking space access funding opportunities by building networks with fellow members. Other than perfecting your pitch and business idea the most important solution to finding funding opportunities is to create the right networks and position yourself in a place where opportuniies can easily find you.
