Financing for Tech Startups in Sub-Saharan Africa

CTIC Dakar

Why and How to invest in Tech SMEs in Africa ?

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

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

1. Stop thinking about banks or MFI…

• R&D = Human Resources mostly

• No Revenue before 1 or 2 years

…to finance innovation

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

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)

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

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

Yann LE BEUXCatalyst

Yann.lebeux@cticdakar.com+221 33 889 93 62

Merci.

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