The VC4Africa organization reached out to entrepreneurs part of the community in the effort to benchmark their progress. Specifically, we were looking to see organizational advancement as measured by the number of jobs created and growth in revenue over time. By establishing such an index, the aim is to offer tangible evidence of SME Impact created by the entrepreneurs part of the VC4Africa community. Entrepreneurs with a venture profile published on VC4Africa were asked to participate in an online survey. The survey was sent to 800 entrepreneurs and 160 entrepreneurs responded, a 20% response rate. These are the results of the first VC4Africa SME Performance Index 2013.

1. SME
PERFORMANCE
INDEX
2013

2. WHY VC4AFRICA
»
Africa
is
a
hot-­‐bed
for
innova7on
and
a
source
of
world
changing
solu7ons.
To
realize
the
poten7al
of
the
con7nent’s
most
promising
entrepreneurs
resources
need
to
be
unlocked
i.e.
the
required
network,
knowledge
and
capital.
The
VC4Africa
community
is
a
global
peer-­‐to-­‐peer
network
where
entrepreneurs
and
investors
come
together
to
build
great
African
success
stories.

3. RESEARCH OBJECTIVES
»
Benchmark
the
progress
of
companies
registered
on
VC4Africa;
»
As
measured
by
the
number
of
jobs
created
and
growth
in
revenue
over
7me;
»
Offer
tangible
evidence
of
SME
Impact
created
by
the
entrepreneurs
part
of
the
VC4Africa
community.

4. DATA COLLECTION
»
Entrepreneurs
with
a
venture
profile
published
on
VC4Africa
were
asked
to
par7cipate
in
an
online
survey;
»
The
survey
was
sent
to
800
entrepreneurs
and
160
entrepreneurs
responded,
a
20%
response
rate;
»
Par7cipants
in
the
survey
received
the
‘Jobs
Creator’
badge
to
recognize
their
posi7ve
contribu7on
to
society.

5. A FEW FACTS
»
VC4Africa
has
processed
1600
venture
applica7ons
and
800
entrepreneurs
have
successfully
published
their
venture
online;
»
The
ventures
on
VC4Africa
are
early
stage
and
require
investments
less
than
USD
$1
million;
»
The
primary
sectors
include
mobile,
web,
renewable
energy,
healthcare,
educa7on
and
agriculture,
amongst
others;

6. A FEW FACTS (cont)
»
Each
venture
is
scalable,
makes
smart
use
of
technology,
or
is
disrup7ve
in
their
applica7on
of
a
business
model;
»
Thirty
percent
of
the
registered
ventures
have
an
explicit
social
mission
and
could
be
qualified
as
a
social
enterprise;
»
Listed
entrepreneurs
have
access
to
free
online
tools,
mentorship
opportuni7es,
private
deal
rooms,
and
networking
opportuni7es.

7. JOBS CREATION
Total
number
of
jobs
realized
per
2012
and
the
expected
number
of
jobs
created
per
the
end
of
2014.
449
2263
0
500
1000
1500
2000
2500
Realized
(N=120)
Expected
(N=150)
Total
Jobs
Created

8. JOBS CREATION (cont.)
Total
number
of
jobs
created
per
2012
and
as
expected
per
end
2014,
comparing
average
per
startups
vs.
ventures
seeking
expansion
capital.
2.66
14.09
6.08
18.03
0
2
4
6
8
10
12
14
16
18
20
Realized
2012
Expected
per
end
of
2014
Average
Number
of
Jobs
Created
per
Venture
Startup
Expansion

9. TEAM SIZE
The
average
and
median
number
of
people
hired
per
venture.
0
2
4
6
8
10
Year
1
Year
2
Year
3
Median
and
Average
Number
of
Employees
per
Venture
Expansion
(Average)
Startups
(Average)
Expansion
(Median)
Startups
(Median)

10. REVENUE GROWTH
Generated
revenue
broken
down
by
operaRng
year,
with
clear
growth
trend
from
year
1
to
year
3.
Including
forecasted
growth
for
years
4
and
5.
0%
20%
40%
60%
80%
100%
Year
1
(N=69)
Year
2
(N=47)
Year
3
(N=28)
Year
4
(N=56)
Year
5
(N=32)
DistribuRon
of
Generated
and
Expected
Revenue
(in
USD)
Over
50K
20K-­‐50K
5K-­‐20K
Less
than
5K

11. REVENUE GROWTH (cont.)
By
the
second
year
of
operaRons,
64%
of
ventures
have
already
started
to
generate
revenue
40
56
23
15
16
0%
20%
40%
60%
80%
100%
N=150
DistribuRon
of
Ventures
by
First
Year
of
Revenue
No
revenue
Year
4
Year
3
Year
2
Year
1

12. INVESTMENT
92
ventures
that
parRcipated
in
the
survey
were
successful
in
securing
nearly
USD
$12,000,000
in
funding.
$
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
N=92
Total
Invested
Capital

13. INVESTMENT (cont.)
Looking
at
the
amount
of
total
secured
investments,
close
to
75%
is
commercially
financed
vs.
25%
grant
based
funding.
73%
27%
Commercial
vs.
Grant
Funding
Commercial
Grant

14. 61%
of
the
companies
received
funding.
Comparing
the
median
value
to
the
average,
the
laaer
being
significantly
influenced
by
a
few
outliers.
INVESTMENT (cont.)
$20,000
$90,000
$80,189
$237,206
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Startups
(N=65)
Expansion
(N=27)
Invested
Capital
per
Venture
Median
value
Average
value

15. INVESTMENT (cont.)
Comparing
funding
sources
for
startups
vs.
expansion
capital.
Startups
securing
a
higher
%
of
grant
funding
at
an
early
stage
of
development.
0%
20%
40%
60%
80%
100%
Startup
(N=65)
Expansion
(N=27)
DistribuRon
of
Capital
Source
per
Venture
Category
Commercial
Grant

16. INVESTMENT (cont.)
61%
of
the
companies
received
funding.
Comparing
the
median
value
to
the
average,
the
laaer
being
significantly
influenced
by
a
few
outliers.
$27,500
$34,500
$119,150
$165,943
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Urban
(N=78)
Rural
(N=14)
Invested
Capital
per
Venture
Median
value
Average
value

17. SECTOR ANALYSIS
Breakdown
capital
invested
per
sector.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Technology
(N=39)
Internet
(N=29)
Energy
(N=9)
Agriculture
(N=7)
Retail
(N=7)
Banking
and
Finance
(N=7)
Tourism
and
Hospitality
(N=9)
Manufacturing
(N=3)
Educa7on
(N=7)
Services
(N=7)
Real
Estate
(N=6)
HR
(N=2)
Healthcare
(N=2)
Cosme7cs
(N=1)
Transporta7on
(N=2)
Other
(N=13)
Total
Invested
Capital
per
Sector
ICT
Media
Mobile
Technology
Ecommerce

18. SECTOR ANALYSIS (cont.)
Breakdown
capital
invested
per
sector.
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Energy
(N=9)
Agriculture
(N=7)
Banking
and
Finance
(N=7)
Retail
(N=7)
HR
(N=2)
Tourism
and
Hospitality
(N=9)
Healthcare
(N=2)
Manufacturing
(N=3)
Technology
(N=39)
Internet
(N=29)
Educa7on
(N=7)
Other
(N=13)
Services
(N=7)
Real
Estate
(N=6)
Cosme7cs
(N=1)
Transporta7on
(N=2)
Total
Invested
Capital
per
Venture

19. CONCLUSIONS
»
Combined,
92
ventures
that
par7cipated
in
the
survey
were
successful
in
securing
nearly
USD
$12,000,000
in
funding.
»
By
the
second
opera7ng
year,
64%
of
the
ventures
had
succeeded
in
genera7ng
revenue;
»
75%
of
the
ventures
that
join
VC4Africa
are
pre-­‐revenue
startups.
25%
join
as
ventures
seeking
growth
and
expansion
capital;
»
83%
of
the
ventures
registered
on
VC4Africa
have
an
urban
focus
vs.
17%
that
have
a
rural
focus;

20. CONCLUSIONS (cont.)
»
On
average,
startups
registered
with
VC4Africa
secured
USD
$80,000
in
funding
vs.
expansion
companies
that
secured
USD
$237,000;
»
Ventures
with
an
urban
focus
secured
less
than
ventures
with
a
rural
focus.
Where
the
former
secured
USD
$119,000
the
laler
secured
nearly
USD
$166,000
on
average;
»
There
is
about
an
75/25
split
for
Commercial
vs.
Grant
funding
the
companies
have
been
able
to
secure
to
date;

21. CONCLUSIONS (cont.)
»
Ventures
are
improving
their
revenue
performance
over
7me.
For
example
57.1%
of
the
ventures
registered
in
2010
show
less
than
USD
$5K
in
revenue.
43.8%
of
those
same
ventures
expect
to
generate
more
than
USD
$50K
in
2013;
»
It
is
clear
the
companies
are
growing
in
size
and
adding
full
7me
posi7ons
(FTE’s)
year
on
year.
By
2012
the
companies
registered
on
VC4Africa
employed
a
combined
449
people.
By
2013
the
same
companies
expected
to
increase
their
combined
staff
to
2,263
FTEs;

22. CONCLUSIONS (cont.)
»
2011
looked
like
a
down
year
for
most
companies
and
there
might
be
a
correla7on
to
broader
economic
factors
i.e.
The
global
recession;
»
It
might
be
true
that
companies
secure
a
higher
%
of
grant
funding
at
the
earlier
stages
of
their
development,
but
the
evidence
is
not
conclusive;
»
It
will
be
interes7ng
to
see
what
trends
emerge
given
larger
data
sets
showing
how
company’s
mature
over
longer
periods
of
7me.

23. CLOSING REMARKS
»
The
mean
and
average
value
of
invested
capital
per
venture
differs
considerably.
This
implies
a
significant
impact
due
to
a
few
outliers.
Therefore
these
outcomes
have
to
be
treated
carefully;
»
The
top
five
investment
sectors
consists
of:
Technology
&
ICT,
Internet
&
Mobile,
Energy,
Agriculture
and
Retail;
»
In
the
top
five
investment
sectors
the
average
investment
per
venture
ranges
between
100K
and
250K,
agriculture
and
energy
being
more
capital
intensive.

24. CLOSING REMARKS (cont.)
»
This
is
the
first
7me
VC4Africa
has
endeavored
to
create
such
an
index,
an
ac7vity
we
look
to
build
on
in
the
future;
»
We
would
like
to
thank
the
entrepreneurs
that
par7cipated
in
this
study.
They
con7nue
to
inspire
all
of
us
at
VC4Africa.
»
You
can
see
which
companies
par7cipated
in
the
index
and
interact
with
the
par7cipants
on
VC4Africa.biz

25. QuesRons?
Please
feel
free
to
contact
Ben
White
at
Ben@vc4africa.biz
Special
thanks
to
Thomas
van
Halen