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Financing for Tech Startups in Sub-Saharan Africa

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Presentation done at the 3rd Making Finance Work for Africa conference in Dakar on June 11th. www.mfw4a.com

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Financing for Tech Startups in Sub-Saharan Africa

  1. 1. CTIC Dakar Why and How to invest in Tech SMEs in Africa ?
  2. 2. 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
  3. 3. 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
  4. 4. 1. Stop thinking about banks or MFI… • R&D = Human Resources mostly • No Revenue before 1 or 2 years …to finance innovation
  5. 5. 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
  6. 6. 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)
  7. 7. 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
  8. 8. 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
  9. 9. Yann LE BEUX Catalyst Yann.lebeux@cticdakar.com +221 33 889 93 62 Merci. Get in touch www.cticdakar.com Facebook.com/cticdakar Twitter.com/cticdakar

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