Funders chase start-ups as entrepreneurs sustain innovation

Uche Abiakam has been a fashion entrepreneur since 1996. Abiakam has secured the trust of customers through her Joagh Athletics. Last year, she applied and got N5 million loan from the Lagos State Employment Trust Fund (LSETF).

Abiakam secured the loan because of her innovation. She was able to create 100 brands without external funds and ensured they were found on Jumia Nigeria, Jumia Ghana, Jumia Kenya, Konga Nigeria, and Dressmeoutlet.com, among others.

Like Abiakam, local and international funders are searching for innovative start-ups who are able to break with the norms to create a change in their industries with their own resources.

Banks, local and international investors and grant providers are seeking the right start-ups to put their money. But these must be start-ups with innovative ideas that change the way things are done, disrupting the traditions and norms of their industries.

In 2017, Agriko attracted $250, 000 from investors three months after starting. Agriko started in July and got this fund in October.

Agriko currently supplies 33,000 litres of natural fruit drinks every month in the Lekki area of Lagos.

“Over the coming months, we aim to increase our distribution capacity to about 250,000 litres of natural fruit drinks across Lagos and expand the product line to include agricultural produce such as banana, potatoes, plantain, pineapples, mangoes, tomatoes and onions,” Wole Oluyemi, founding director, told Start-Up Digest last year.

Also last year, the Nigerian Economic Summit Group (NESG) invited entrepreneurs to pitch their ideas before investors.

At the end, L & L Foods, a food processing and packaging firm, emerged winners and went home with $15,000.

First runner-up was Accounteer, which enables entrepreneurs to manage their administration themselves even when they are not experts. The startup went home with $10,000.

MyPadi.ng, a hostel booking platform for students, was the second runner, walking off with up $5,000.

Still in 2017, Nigerian-based start-up, Andela, which invests in Africa’s most talented engineers, secured $40m in Series C Funding led by pan-African venture firm, CRE Venture Capital.

In 2016, Wi-Fi provider Tzeti got $2.1 million from an investor, while e-commerce start-up Cars45 secured $5 million. Similarly, Fintech firm Lydia got $1.25 million.

In 2015, Travelbeta.com, a Nigerian travel booking website co-founded by Onyeka Akumah, raised $2 million in a seed round led by Altheus Limited.

Mark Essien, founder of hotels,ng, had earlier raised $250,000’s seed fund from Spark, but the fund almost finished along the line because most of it was going into salaries. He was able to secure another $1.2m from international investors EchoVC Pan-Africa Fund and Omidyar Network.

Techpoint reported in the second quarter of 2018 that local and foreign investors pumped about $73.7 million into Nigerian startups within the quarter, with FinTech getting 75 percent of the total.

Cellulant, payment platform, received $47.5 million, followed by a service firm, O-Mobile Multimedia Limited, which got $10,000,000. Also, PiggyBank got $1.1 million, while logistics startup TradeDepot received $3 million. More so, Kobo360 got $1.2 million in June 2018.

A 2017 report by Global System for Mobile telecommunications Association (GSMA) showed that out of the $560 million invested in technology startups in Africa in 2017, Nigeria got $114.6 million.

Africa’s most populous country ranked third after South Africa and Kenya, which got $167.9 million and $147 million respectively. The three countries accounted for 76 percent of the total funding that came into the region in 2017, the report said.

ODINAKA ANUDU