What Are The Harsh Realities For African Start-Ups?

What Are The Harsh Realities For African Start-Ups?

African startups
Photo: wocintech/Flickr

Like other African entrepreneurs out in force at the Vivatech trade fair in Paris last week, Boupda acknowledged the challenges of entrenched poverty, corruption and terrorism that are holding back many countries.

“Africa is rising, yes, but it’s also 54 countries, so what that really means is 54 different challenges,” he said after presenting his Diool payments app to a jury of three venture capital executives.

His enthusiasm was shared by Jack Ma of Chinese e-commerce giant Alibaba, who said in a keynote speech he was “amazed by the passion of young people” in Africa.

From The Star.

“They are talking about dreams, about the future, they have no fear,” he said.

A handful of African tech success stories has whetted investors’ appetites, like the M-Pesa mobile money transfer service app or Jumia, the pan-African e-commerce group that listed on the New York stock exchange in April.

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African entrepreneurs often struggle to find the capital to finance their projects locally, making fairs like Vivatech a golden opportunity for finding deep-pocketed backers.

But for all of Africa’s potential, many venture capitalist have learned the hard way that pouring money into innovative firms and ideas is not always a recipe for success.

“We thought we had the tools, we had primarily African teams in place, and we crashed,” said Rebecca Enonchong, recounting how she tried to bring her US business services company Appstech to her native Cameroon.

“We failed at understanding the way people do business. It wasn’t about our technical offering … Africans need to interact with human beings, which we weren’t used to,” she said.

Read more at The Star.