This question is particularly interesting in the context of Africa, the only region in the world where there are more female than male entrepreneurs. Women make up 58% of the continent’s self-employed population, founding and running millions of small businesses which drive the informal economy, a sector that represents 40% of Africa’s GDP and is the main driver of economic growth on the continent. 

So how do we invest in African women to accelerate progress and feed this whole proverbial village?  At the ecommerce business I cofounded, which is designed to serve mass-market African consumers, we partner with 36,000 small business owners who serve as delivery points for our customers’ ecommerce orders. More than 80% of them are women, so I have a front-row seat, experiencing the entrepreneurial energy of thousands of indefatigable African businesswomen every day.  

And we’ve discovered a magic wand that fits nicely in their palms: smartphones.  

Before becoming Copia agents these women made $2-10 per day.  With a smartphone, these same women increase their incomes by more than 70% which is transformational; it can mean the difference between poverty and middle class.  A study in Peru corroborates our experience, finding that smartphones increased household consumption by 11% and reduced poverty by 8%.

It was way back in 2003 when Nobel Laureate Muhammad Yunus said that the quickest way to get out of poverty was to have a mobile telephone.  But at that time hardly any low-income women had smartphones due to the cost.  Finally today more than 20 years later, smartphones are now readily available and most importantly, affordable.  Seventy-three percent ( 2023 Kantar study of Copia customers) of middle and low-income Kenyan consumers now own smartphones, a leap from under 10% a decade ago. 

Not only does mobile-phone access reduce poverty, but smartphones drive gender empowerment; it has been shown that women with smartphones make more independent decisions.  Health outcomes also improve as women who own smartphones better understand sexual and reproductive health.  They overcome the socio-economic challenges facing women in rural areas, make strides as business owners, boost their economic independence and drive economic growth in their communities.

Given women are most often responsible for family household purchases, it makes sense that 75% of Copia’s ecommerce customers are women. With smartphones in hand, suddenly these women are transformed into informed, empowered global consumers. Copia board member and ex-CEO of Jumo Africa, Buhle Goslar, explains “Copia plays a critical role in reducing gender disparities by enhancing women’s digital access to education, health, financial services and household goods.  The potential to profoundly improve gender equality is incredibly inspiring.” 

So this International Women’s Day, let’s find ways to get more smartphones into their hands.  Enabling them to take part in emerging sectors such as e-commerce is a strategy for driving millions of dollars of newly-created wealth into the pockets of African women, the most potent driver of growth on the African continent. 

About the author: This article is authored by Tracey Turner. Tracey is Chair and co-founder of Copia Global

Feature image courtesy: Jorge Gardner on Unsplash

The post The ‘Magic Wand’ For African Women appeared first on WeeTracker.

This is how a foreigner described buying vegetables at a local Indian market using just his phone. But this was no ordinary tourist but the German federal minister for digital affairs and transport, Volker Wissing, describing India’s blazing Fintech solution, Unified Payment Interface or UPI.

In the recent years UPI has grown rapidly thanks in part to efforts by the Indian government. Prime minister Modi and Foreign affairs minister S. Jaishankar have been two key figures for UPI expansion in India and Asia and the whole world. Launched in 2017, UPI has now grown and is available in Singapore, UAE, Saudi Arabia, USA, Hong Kong, Australia, Sri Lanka and Mauritius. The growth is also felt at home as UPI has over 500 million merchants who use the system to accept money for their business.

But before UPI was conceived Kenya’s Telco company, Safaricom, was rolling out its own leading innovation in partnership with its associate company Vodafone. The name of this new technology is MPESA. In 2007, MPESA was one of a kind and was initially met with a lot of scepticism. In the initial months after rolling out MPESA, out of 9 million Safaricom sim card holders only 200,000 had subscribed to MPESA representing a mere 2%. Undeterred Safaricom pushed on with its MPESA platform leading it to become the most valuable company in East Africa and at one time crossing A trillion shillings in terms of Market cap, becoming the first of its kind.

However, Safaricom’s market cap has fallen to 600 billion Kenya Shillings in just over two years.

In today’s modern era of technology, one may struggle to make sense of the achievements of Mpesa and UPI. After all we have PayPal, Venmo, Cash app, Apple Pay, Flutterwave and Chipper Cash among many others. The primary issue is that they are not designed for transactions among people living in developing countries. PayPal is at the heart of court cases as it has continuously frozen accounts from various African and South American countries, leaving the holders stranded without access to their funds. Venmo, Cash app and Apple pay are not supported in a great majority of developing countries while Flutterwave and Chipper Cash are designed cater for expats who are sending money home and both are weak in handling multiple transfers. Hence, one can say UPI and Mpesa are massive as they purpose to serve the local everyday citizens.

MPESA at its peak was feted to be revolutionary but it has largely remained domiciled to Eastern Africa even with the recent expansion to Ethiopia, Mozambique and Lesotho. In contrast UPI has already crossed continental borders and is available in UK, France and the States. One of the reasons is that UPI transactions among individuals are free of charge for customer accounts, and merchants who accept UPI payments are charged 1.1% for amounts over 2000 rupees or 24 USD. In stark contrast Mpesa is only free when sending an amount lower than 100 Ksh/ 0.7 USD and the next transaction amounts are put in bands with each band costing higher than the previous. In example let’s take two scenarios, one of an Indian sending 100 USD to a friend and a Kenyan sending 100 USD to a friend. An Indian will not be charged anything using UPI (assuming he has a fully digital wallet that’s not linked to any card or bank account)  while the Kenyan using MPESA will be charged 100 Ksh / 0.7 USD which is 0.68% of the amount being sent. This is still cheaper than moving money from your bank account to MPESA account, some banks charge as much as 10% to move a dollar to your MPESA account. These charges have made heavy users of MPESA, who operate on tight margins, shun away from the platform and depend on traditional cash operations.

Another reason why MPESA’s growth has stagnated is the Government’s position on Safaricom. The Government of Kenya owns about 36% of the organisation, with the rest being owned by companies and individuals. For this reason, many believe Safaricom has won lucrative contracts worth hundreds of millions of Dollars. Many suspect the Kenyan NIS (National Intelligence Service) blocked the proposed merger of Safaricom’s top opponents, Airtel and Telkom.

It was reported that the merger would cause a national security threat to Kenya. This has caused a distrust among investors who believe elements within government are conducting a sort of insider trading.

Furthermore, MPESA has failed to Integrate with other global platforms. MPESA xpress billing which is connected to Google Pay is always down while users experience and complain of the difficulties of registering for Mpesa GlobalPay virtual Visa card service. On the other hand, UPI has successfully integrated with Singapore’s PayNow, which is linked to Malaysia’s DuitNow and GooglePay.

Thus, I reach the conclusion that UPI will probably spread its tentacles further into the world, soon surpassing one billion users, while Mpesa dominates the East African market.

Feature image courtesy: Volker Wissing purchasing goods using UPI (photo shared by the German embassy in India)

Author: Ray Munene

Ray Munene is a Machine Learning engineer with a passion for technology and a focus on African-oriented solutions, reflecting a dedication to innovation and exploring new avenues in the tech industry. With a background in both Economics and Software Engineering, he brings a wealth of experience to his endeavours. His commitment to leveraging technology for African solutions aligns with the evolving landscape of the continent, transitioning gadgets from mere communication tools to unique service delivery platforms.

Note: This is a guest post, not part of the Weetracker editorial desk. Views and opinions are solely of the author and do not necessarily represent Weetracker’s views. Weetracker is only the publishing platform for this guest article.

The post Digital Transactions — A Comparison Between India’s UPI and Kenya’s Mpesa appeared first on WeeTracker.

Look out for AI development to get hold of AI-powered solutions for Agriculture in Africa. 

Tackling African Agricultural threats with AI

Africa is mainly dependent on agriculture for their livelihood, it is like a cornerstone for their economic stability. Just like they receive too much from it, likewise they face various challenges as well. Whether it is a weather issue or a threat from any hazardous disease, farmers need to be ready for everything. If they are not, then it will hamper or disturb both their economic state and productivity. Thus, the significance of AI development companies is felt here as they can easily take care of this. 

The emergence of AI in this segment ignites their heart with the hope that any issue can be spotted before it will impact much. AI is reshaping the way we do agricultural activities. IoT enables every specific individual to keep an eye on their crops and soil to maintain their safety. 

See where AI helps in Agriculture in Africa and how it has been benefiting them along with enhancing their economic place and production of food. 

Crop inspection & management

AI technologies created by relevant AI development will gather data through satellite images or by drone. It will make the task of examining the crops for their health, looking for disease, and inspecting what is needed like fertilizer, pesticide, irrigation, etc. It allows farmers to make critical decisions easily and improve their agricultural efficiency. 

Analysis of Soil

AI applies here to accumulate the soil data to receive some necessities for making it apt for agricultural practices. Through this, farmers can obtain an idea about the PH level of the soil, Soil health, nutrient level, etc, that enhances the crop yielding. 

Detection of disease

AI and IoT-fledged devices are taken into consideration to examine pests, weeds, and diseases in crops. An IoT development company out of all introduced devices that are enough to capture data in visual form. Furthermore, AI will run through it to see whether something wrong is going on or not. With this, farmers can take action without disbursing more time; otherwise, the effect will be devastating.

Managing the Livestock

AI will take action to witness the livestock’s health, behaviour, and productivity. Devices with sensors and AI-enabled features assist in detecting any abnormality, improving breeding programs, and managing livestock welfare. 

Analysis of the market, along with price prediction

One of the major uses of AI is to scrutinize trends going on in the market, historical data, and the response of consumers to predict prices and to impart significant insights. Farmers with this data can gain a better understanding of crop selection, marketing tactics, and the ideal moment to harvest. 

How does an AI development company help in disease detection in African Crops?

1. Check out AI applications to examine disease in advance

AI, when it goes hand in hand with Machine Learning, goes through a large amount of data in time. It brings a new way to examine the disease and to deal with it. By accessing the patterns gained through machine learning, AI detects the disease in an early stage so that it can be easily prevented. Through this, they will save their crops from getting damaged.

2. Usage of image recognition and diagnostic tools

Take a step into the realm of image recognition and diagnostic tools, one of the quintessential technologies produced by an AI development company. Through this, AI witnessed the problem in the form of images to analyze the visual data regarding soil, crops, and leaves. AI will easily evaluate the pattern on the leaves to inspect the disease. It appears to be a privilege that lets the farmers look out for the safety of their crops by having real-time images. 

Advantages for African Farmers

After taking a dip in the scenario of artificial intelligence helping African farmers detect disease in plants, it is necessary to know its advantages as well. 

1. Better yielding of crops

With the help of AI-based disease detection apps, make sure to identify the dangers before they get magnified. Examining the threat and modifying your agricultural practice accordingly will lead to improved yielding. It will ensure a good and reliable supply of food for local people. 

2. Enlightening farmers with knowledge

Besides identifying the disease, they impart some valuable insights to farmers. They can gain a deeper and more vivid understanding of disease patterns along with crop conditions. It will make them stable enough that they can make informed decisions on their own. Moreover, it will improve the level of their farming practice. 

3. Strengthening up food security

The confluence of both Artificial Intelligence and disease detection strengthens food security. With the introduction of several apps developed by AI companies, they easily prevent the danger of any disease outbreak. It will strive them to guard the crops of their staple food and ensure consistency. This kind of support is needed at a place like Africa where Agriculture is the mainstay. 

In a Nutshell!

The integration of AI, along with Machine Learning and IoT, promises better sustainability for agriculture in Africa. A Digital Transformation company steps up in this domain to tackle all the issues that farmers in Africa encounter. The unity between the farmers and AI will create a powerful combination that can eradicate all the challenges persisting in the agricultural sector in Africa. 

Feature image supplied

The post AI-Powered Solutions for Agriculture in Africa appeared first on WeeTracker.

This untapped potential between high-quality investment “demand” and reduced capital “supply” extends to various commercial sectors, including logistics, HR, and insurance, all presenting significant high-value “white spaces” waiting to be filled. For those looking to invest in Africa, especially in high-growth, digitally-driven companies, these markets offer immense potential.

African Investment In Developed Digital Sectors

Africa’s digital sectors are leading the way in terms of economic viability on the continent. These sectors encompass fintech, tech-enabled commerce (such as logistics, supply chain, mobility, digital health, and education), and renewable energy. These industries revolve around key themes like financial inclusion, climate change mitigation, and poverty alleviation.

With low manufacturing capabilities, high youth unemployment rates, poor-quality health care, and inadequate infrastructure, Africa’s sustained growth now depends on its digital economy. Crucially, the continent has historically exhibited a remarkable ability to “leapfrog,” for example by embracing a mobile-first approach and swiftly adopting digitally managed renewable energy. This digital-first mindset, often born out of necessity, has made these sectors essential employers, providing opportunities for the millions of Africans entering the job market annually.

A Growing Investment Landscape

In recent years, investment in African start-ups has surged, exceeding $5 billion in 2021. However, this figure has dipped sharply due to global macroeconomic issues and specific African challenges. Despite this growth, two significant “white spaces” continue to exist in the African investment landscape.

The first gap is in the range of $10-25 million scale-up funding rounds. The second is the lack of customised, structured non-equity financing to support company growth. Notably, because the vast majority of African investments are impact or mission-driven, focusing on positive social and economic change, this provides a natural path to overlay specific investors’ objectives, such as gender-lens investing, climate positivity, or financial inclusion.

The $10-25 Million Funding Gap

In the chart below, based on proprietary research, we can see the number of investors active in Africa categorised by the size of their investments. On the left are the traditional African start-up investors, usually committing less than $5 million. To the right are investors, including international or regional players, whose criteria demand larger investments, usually exceeding $20 million. This gap between $5-20 million is where relatively few investors are actively engaged, creating a significant opportunity for future investments. 

There is a yawning gap:

Several forward-thinking funds have recognised this gap and are adapting to address it. Investors like Norrsken, Partech, and TLCom have or will naturally raise larger funds to support these companies’ growth. Simultaneously, the number of quality African companies qualifying for such funding is on the rise, leading to increased demand that will outstrip the capital supply for many years. This persistence in the funding gap presents a compelling investment opportunity.

Structured Financings in Africa

Non-equity capital is still in its early stages of development in Africa. Typically, local currency debt is primarily offered by banks, but these institutions are known for being burdensome, expensive, and reluctant to support companies looking to invest in growth, which naturally reduces profitability in the short term. Moreover, their financial products tend to be relatively basic and are usually accessible only to larger, well-established businesses at the top of the economic hierarchy.

Dollar-denominated debt, on the other hand, is available in various forms, with a significant portion originating from Development Finance Institutions (DFIs) or similar organisations. However, the innovative financial structures and speed of execution required in Africa are often lacking from these sources.

This issue is compounded by the fact that many African companies, particularly those aiming for growth, rely at least in part on selling money in some form to generate profits in their operations. This can take the form of financing productive assets like motorcycles, mobile phones, solar pumps, or even embedded finance such as providing financing to retailers for weekly stock replenishment, funding agricultural inputs with guaranteed off-take, or supporting the deployment of POS terminals for agent banking. We estimate that over 70% of African scale-up businesses generate income through these “money resale” activities.

This dependence on money resale for income makes it financially impractical to rely solely on equity financing. Equity returns are typically around 30% annually, while financing margins, especially for commercial financing, are usually much lower. Consequently, companies cannot afford to “burn” capital in this way to simply fuel growth.

Examples of this kind of capital are diverse. They include payments companies seeking up to $10m to support the purchase and distribution of POS terminals to contracted merchants, providers of renewable power products looking to transfer an initial $20 million+ of dollar-indexed receivables generated from three markets to an off-balance sheet Special Purpose Vehicle (SPV), with the potential to expand to $40-50 million to enhance liquidity, and even large companies looking to finance a second year of market entry through a mix of debt and equity, since banks typically require 2-3 years of evidence before lending the first $, even if a client has $100m+ of revenue already.

This structured finance gap is often filled by DFIs, which, while invaluable to the African ecosystem, may not be an ideal fit for most growing companies. They tend to be cumbersome, inflexible, demand extensive reporting, and have less tolerance for the dynamic evolution of growing businesses. Although some flexibility has been introduced in recent years, the need for structured finance remains unmet across the continent, necessitating earlier risk-taking and a faster response time than current providers can offer.

This article was authored by Victor Basta,  founder and CEO of DAI Magister, DAI’s capital advisory arm, who has advised on more than 130 transactions across 30 years and helped build three corporate finance firms.

Featured Image Credits: McKinsey

The post A Dealmaker’s Take On The Most Valuable ‘White Spaces’ In African Investing Today appeared first on WeeTracker.

Part of the Kauffman Fellows Annual Summit agenda, this event also garnered substantial attendance from global and local investors and ecosystem supporters. 

Providing a platform for engaging conversations covering a wide spectrum of topics, including empowering women entrepreneurs and addressing the gender disparity in leadership within the African tech ecosystem, the WWBA inaugural assembly highlighted actionable initiatives everyone can take to address the gender gap within venture capital firms and in funding opportunities. 

Founded in 2022 by Gwera Kiwana and Thea Sokolowski, Women Who WWBA is a community designed to bring together women and non-binary people across Africa’s tech space, with the goal of enabling them to build better. WWBA exists to facilitate spaces and opportunities for underrepresented groups across the continent (and beyond) to meet, share ideas, learn and connect.

Women fund managers have reported taking 2-3 times longer to secure their first fund compared to their male counterparts. Moreover, women-led founding teams receive less than 7% of total venture capital funding in Africa, despite the continent boasting a high number of women entrepreneurs. However, data consistently shows that firms with at least one woman partner and teams with women in leadership positions outperform their all-male counterparts. 

Reflecting on the mission of the Assembly, Gwera Kiwana, Co-Founder, Women Who Build Africa, said: “We envisioned an assembly that would empower women in tech to not just embrace change, but drive it. Our goal is to create a community that sparks innovation, supports growth, and redefines the future of Africa’s tech landscape.” 

The event consisted of a keynote by Micheline Ntiru, venture builder and investor, as well as a panel, led by A&A Collective, exploring strategies for increasing women’s participation in venture capital. Panellists included Mika Hajjar of P1 Ventures, Maryanne Ochola of Endeavor Kenya, Harriet Adinkrah of 4DX Ventures, and Wambui Kinya of Google and Obuntu Foundation. Other themes explored include challenges women founders face in reaching later stages of funding, strategies to create inclusive spaces, and general advocacy for greater support for women in the venture capital ecosystem.

A fireside chat between Patricia Chin-Sweeney of Beyond Capital Ventures and Joyce-Ann Wainaina of Chui Ventures delved into innovative approaches to gender lens investing, emphasising the importance of fostering gender parity within businesses. The event also saw Shola Akinlade, Amandine Lobelle and Jemima Kenyanjui from Paystack share more about how the team at Paystack actively works to enable an inclusive work environment and how their intentional leadership that reflects the diversity of the organisation at large has created a more inclusive culture.

Maya Famodu of Ingressive Capital and Dr Ola Brown of Healthcap Africa also shared their perspectives as women building venture funds and businesses. Ten early-stage women founders had the opportunity to pitch their businesses to an investor panel consisting of Loraine Achar-Ogada of Founders Factory Africa, Isis Nyong’o of Asphalt & Inc, Crystal Mugimba of Open Capital, Mukami Kamau of Chui Ventures, and Brenda Wangari of Madica.

The first day closed with a panel led by Enza Capital, where experienced women founders including Caitlin Dolkart of Flare, Radhika Bhachu of Ndovu, Sneha Mehta of Uncover and Sonia Kabra of BuuPass shared real stories and challenges related to their own fundraising journeys.

On day 2, discussions tailored for women founders were led by accomplished industry leaders, including Joanna Bishcel of Kasha Global, Hilda Moraa of Pezesha, Marie-Reine Seshi of Kola Market, and more.

An event that ignited discussions and connections that are actively reshaping the future of tech on the continent, the WWBA Assembly serves as a beacon of empowerment and innovation, marking the beginning of a new era for women in Africa’s tech landscape.

The post Breaking Barriers: The Women Building Africa’s Tech Future appeared first on WeeTracker.

They don’t like any political protests, they don’t like gaps in legislative frameworks, or legal systems that aren’t underpinned by swift and reliable courts.

But our challenges go way further than that in drawing in funding for our young entrepreneurs.

At first base, we have an issue of size. In the investment journey that spans from seed capital to venture capital, our sums are so small, they almost cannot be handled.

Typically, funds that invest in startups consider below USD 100 K as tiny compared with the average size of seed funding worldwide of between USD 1 M and USD 2 M – which is just to fund product development.

But for the Kenyan hopeful that has found a way to make our bridges stronger, say, the case for over USD 1 M on product development is hard to find – enough to employ nearly 150 engineers for a year, which is more than a fifth of the scientific establishment size of the Kenya Agricultural and Livestock Research Organisation.

It doesn’t get any brighter further up the investment ladder, with the average venture capital deal running at nearly a billion shillings.

As we move to tiny and tinier, that leaves investors without the costs per business in setting up each investment, such as the salaries for the investor professionals in the days spent finding, analysing and creating an investment plan.

These just can’t be covered on a USD 10 K (KES 1.4 M) early investment. Like, USD 10 K investment, USD 20 K in administration charges?

This leaves most startup incubators and even the investors supported by philanthropists, as an aid project in entrepreneur support, rather than a market.

Then, there is the issue of finding promising businesses. Ironically, our investment marketplace, which so often talks about market linkages, is remarkably short of them.

Our few dozen business incubators and accelerators are all constantly searching for candidates to support with business know-how: so they provide a feedstock of a few hundred businesses a year to investors.

But Kenya has 1.5 million formal small businesses and over five million informal small businesses, making that few hundred into a pin-prick.

In reality, we can all forget about the few ‘lottery winners’ who get investors this way. The doors are closed for a land of rising businesses, and we stay stuck with hustle and struggle.

Yet social network venture Shujaaz estimated from 2019 research results that supporting two million startups would add Sh180 billion a year to the Kenyan economy and create a million jobs.

It isn’t clever to stay stuck in the special needs corner of a market built for other worlds: for us, we need an investment market built for Kenyans.

The author, Jenny Luesby, is a development communication specialist and Managing Director, Words on Africa.

Featured Image Credits: Kenyan Wallstreet

The post Kenyan Startups Stuck In A ‘Special Needs’ Corner Of Investment appeared first on WeeTracker.

To do this, we need to act now to tackle the yawning funding gap that continues to hamper many small businesses.

Thus, venture capital, a key part of the financial ecosystem that provides entrepreneurs access to capital markets, will become ever more important as we move to rev up all engines of economic growth.

In the Western Cape, a province widely regarded as an innovation hub and the Silicon Valley of Africa, the provincial government has been pushing hard to attract more VC funding into the region to boost the local economy.

VC came under the spotlight recently following the decision by Naspers, Africa’s most valuable tech company, to halt the operations of its ZAR 1.4 B (~USD 314 M), South Africa-focused VC fund.

Furthermore, many have asked whether there is still sufficient appetite to fund startups amid rising interest rates and recession fears across the globe, partly exacerbated by the collapse of start-up-focused lender Silicon Valley Bank.

So, what should we be doing to ensure that we give local startups and SMEs every opportunity to flourish? Could South Africa’s retirement industry, with assets estimated to be worth at least R5-trillion, be the answer?

Problem solvers

VC funding, which is generally provided to promising small businesses in exchange for equity, is crucial for the growth of the startup ecosystem and innovation. Start-ups, which have become a beacon of hope in recent times, could offer innovative solutions to most of our problems today — from power shortages to tackling climate change.

Moreover, putting in place all the necessary measures to give startups and small businesses a leg up can help to attract more foreign investment to South Africa. Investors are generally more inclined to put their money in a country with a booming start-up ecosystem as this invariably suggests that the country is open to innovation and has a high potential for growth. Attracting more foreign investment can accelerate job creation, economic growth and global competitiveness.

Yet many startups still struggle to access the necessary support and funding needed to propel them to the next level. While other factors can make or break a start-up, a lack of funding is often cited as one of the main reasons why such firms fail to take off. Therefore, we should be doing more to close the funding gap to ensure that our start-ups succeed. We could do this by offering first-loss guarantees and incentives to encourage more pension funds to invest in VC. As a start, reducing the regulatory burdens on VC investments, and offering lucrative tax breaks or guarantees to support risk-taking and sweeten deals, could boost startup financing.

Pension funds have traditionally shied away from startups largely because they are regarded as inherently risky business ventures.

The SA SME Fund, which invests in funds that support and develop entrepreneurs, highlights that although South African pension funds have been allowed to invest up to 15% of their assets in alternative investments for the last few years, the uptake has been painfully slow: it is estimated that allocations to alternative investments, including VC, are below 2%. Thankfully, this trend is shifting, albeit slowly. According to Ketso Gordhan, CEO of the fund, more pension funds are beginning to show interest in VC.

“We have a ZAR 250 M (~USD 13.5 M) commitment from the Consolidated Retirement Fund and are in due diligence with both the Public Investment Corp and Rand Mutual Assurance. The Eskom Pension Fund has put out a request for proposals for VC funds to apply. All this will begin to change the landscape for VC as far as institutional capital is concerned,” Gordhan says.

In the US and Europe, pension funds are a crucial source of capital for the VC industry — the success of some of the biggest and most well-known global firms today, such as Apple, Facebook, Tesla and Spotify, can in part be ascribed to VC and the backing by the retirement industry. Estimates suggest that public pension funds contribute at least 65% of the capital in the US VC market, 18% in Europe and 12% in the UK.

Closer to home, Nigeria is a prime example of VC success. The country’s National Pension Commission has encouraged pension funds to invest in VC as part of its efforts to diversify and boost growth. In recent years, Nigerian pension funds have invested in a wide range of VC funds, including those focused on technology, agriculture and renewable energy. These investments have led to the growth of enterprises such as Paga, a leading mobile payments company. No wonder Nigeria has established itself as a major startup hub in recent years.

According to the research firm Disrupt Africa’s most recent Tech Startups Funding Report, Nigeria held onto the crown in 2022 as the best-funded country in Africa for the second year running, and with the most funded start-ups. The country saw 180 start-ups (28.4% of Africa’s funded ventures) raise a combined USD 976 M (29.3% of the continent’s total) — substantially ahead of all other countries on both counts. Once the wonder child of African start-up funding, South Africa declined year on year, both in the number of start-ups receiving investment and in the total amount of funding raised. Seventy-eight start-ups secured backing in 2022 (12.3% of Africa’s funded ventures), together raising USD 329 M (9.9% of Africa’s total). These statistics see South Africa fall to fourth-position on both measures, behind Egypt and Kenya. We should be doing better.

The relative depth of South Africa’s pension funds and capital markets compared with other African nations should put us in a better position to provide more support to local startups, but this won’t happen without targeted policy interventions. To establish South Africa as a top start-up hub, we need clear policies, incentives and explicit guidelines — not least those focused on stimulating pension fund investments in VC.

As the SA Startup Act movement, a collective that represents the local entrepreneurship ecosystem points out, start-ups deserve all the backing they can get as they have the potential to become high-growth enterprises underpinned by innovation to achieve above-average outputs in terms of growth, job creation and socioeconomic impact.

The way forward

In the Western Cape, the provincial government has been on a drive to attract more VC funding into the region to boost the local economy and job creation.

Late last year, Western Cape premier Alan Winde led a delegation to Europe and one of the main goals was to promote the tech ecosystem in the province and explore closer cooperation with VC funds in London. VC is one of the few financial service sectors dominated by the Western Cape, partly because of the strong tech development ecosystem around the province’s leading institutions, such as Stellenbosch University.

Broadly, most VC flows into the technology sector, including fintech and education technology, according to a recent industry report by the Southern African Venture and Private Equity Association (Savca), the industry association and public policy advocate for private equity and venture capital in the region. It correctly emphasises that increasing investment into high-growth, early-stage businesses is key to fostering economic growth and innovation, and is imperative to tackle challenges of poverty, inequality and unemployment.

This is also in line with the National Development Plan, a government blueprint for eliminating poverty and reducing inequality. The plan has ambitious goals for small firms — including a target of 90% of employment opportunities to be created by this sector by 2030. To get anywhere close to this target, we will need to establish a thriving entrepreneurship and startup ecosystem. For this, we need VC and pension funds more than ever. It’s an urgent conversation we should be having as part of efforts to respond to some of the burning questions and challenges we face today.

• The author, Wrenelle Stander, is CEO of Wesgro, the Western Cape’s tourism, trade and investment promotion agency

Featured Image Credits: Choose Africa

The post How To Turn South Africa Into A Nation Of Startups appeared first on WeeTracker.

From embracing the work-from-home phenomenon to improving how they attract and nurture diverse talents; both large and small adjustments born during this year will go on to create lasting shifts in how businesses support their employees and prepare for the future.  

Office Obliteration 

We unmasked and came out of lockdown this year, which is great. It also means employers have a tough decision – should they continue embracing the work-from-home movement or encourage staff to head back to the office? 

It is a tough battle, especially when you consider the number of expensive office buildings that stand empty. But the truth is, there are benefits of working from home. Research shows that working from the comfort of your own home, and not having to commute to and from the office, boosts productivity and morale, especially among introverted individuals. 

So why would anyone want to head back to the office? Well, like it or not, we humans need to feel connected to thrive. 

While more is possible in remote working environments, nothing beats escaping from eight-hour days in front of a computer screen. Even with a back-to-back meeting schedule, being at the office means you can still enjoy a brief walk between meetings, or a hallway chat to punctuate the day. 

Never underestimate the value of an in-person format that allows us to feed off each other’s energy, movement, body language and eye contact. I remember one of the first in-person, two-day workshops that we held earlier this year. There were around twenty-five people in a large hotel conference room, many of whom were seeing each other in person for the first time, and the energy was tangible.

Loadshedding troubles 

Access to a reliable electricity source and good internet connectivity is essential to any business, but more so for ones who have a remote working environment.

Our worsening energy crisis means that most South African businesses are without electricity during the working day, which creates an added stress burden for employees unable to conduct their roles and responsibilities properly. 

Loadshedding pressures cause distractions and disruptions to things like meetings and can negatively impact what is possible in terms of value creation. Things also take longer at a time when the need to act and respond to change is more urgent than ever.

A struggling economy 

Around the globe, everyone is feeling the pinch of a downward-trending economy. In South Africa, the effects were amplified by the near-overnight doubling of fuel costs, thanks primarily to the war in Ukraine, compounded by the effects of state capture, the pandemic, and an unreliable electricity supply.

Maslow’s hierarchy of needs tells us that if a person’s fundamental needs are not met, they simply will not be able to do their best work. I have noticed that people are more tired and emotionally worn out this year. This leads to sluggish productivity and elevated levels of apathy, which is one of the worst things when working as a team.

The need for a rapid organisational response to change

The changes over the last two years have further exacerbated an already volatile, uncertain, complex, and ambiguous world. The urgent need to reinvent and change direction has caught leaders off guard, and in some cases has forced them to make decisions that impact others.

We have seen major decisions handed down from leaders for execution without any context or consultation. Whilst at times this is a necessary approach, it leads to demotivation. Everyone wants to feel like they are a valued member of a team, and that their views are appreciated. I have seen so many instances over this year where better communication and inclusive decision-making would have led to far better results.

Stimulate new ways of thinking

Allowing people, the space to breathe has been so important. Many of us have felt stuck in our jobs while constantly facing challenges that impede progress. 

Attending training with an experienced external coach is an effective way of unearthing new ideas and understanding how to implement them in your organisation. 

Participating in a training course can be a terrific way to disrupt your current way of thinking and create new opportunities for improvement. It enables a complete re-think of your operational needs to create value more effectively.

In Flight Levels thinking, for example, we talk about “agile interactions” rather than meetings, to become explicit about the intended purpose, format, outcomes, inputs, and participants. The aim is to examine and replace the abundance of meetings with a smaller set of truly focused interactions.

Businesses need to be open to reinvention in the new norm. For example, consider shortening all meetings by ten minutes to allow people to move around and regroup before the next zoom call. Screen time is one of the main reasons why our team has chosen to convert our traditional two-day, in-person training to half-day online sessions spread over three-to-four days. 

Taking care of mental health 

This is the biggest health crisis of the pandemic but is often hard to spot. When somebody is behaving below perceived expectations, it is important to generate empathy. One way to do this is to pause before responding and consider no less than five plausible reasons for behaving this way. This technique can help greatly to improve your own responses in difficult situations.

Communication is always your best friend in these circumstances. Employees need to feel reassured that leaders are understanding and that help is available if required.

Humans are complex, each with our own feelings, views, and thoughts. Consult with your people and find ways to co-create solutions. Solutions built together are more widely accepted than those imposed from the top and are more likely to be better for all. While this approach takes more effort, the positive effects are long-lasting.

Note: The article is authored by Mike Freislich, coach, trainer, and co-founder of We Do Change.

Cover photo by Shridhar Gupta on Unsplash

The post 6 Trends That Will Continue To Impact SA Businesses in 2023 appeared first on WeeTracker.