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South Africa’s crowdfunding space expanded earlier this month with the launch of Thundafund, the Cape Town-based crowd-powered startup funder.
While crowdfunding in Africa has yet to reach the heights of similar initiatives in the US and UK, Thundafund founder, Patrick Schofield is bullish on the model’s future on his home continent.
“Crowdfunding is going to fundamentally change the way we start many new enterprises in South Africa. Crowdfunding allows the many to vote with their wallets to decide what is made in our world. Thundafund will be driving this movement in creative and innovative development in South Africa and Africa.”
On 10 June, the platform went live with six projects which collectively reached R60 000 (about US$1 000) of their target total of R315 000. An early success on the platform, YBIKE Evolve — the world’s first 3-in-1 smart bike for kids — raised over R30 000 of its required R100 000 — that’s a pretty significant chunk of capital, especially in South Africa’s emerging crowdfunding space.
Schofield says the goal for Thundafund is to raise R155 million in 3 years for 3 300 projects creating 10 000 job opportunities. That sets the bar pretty high, but through its “networked partners” that provide levels of business support and mentorship to its listed projects, Thundafund is getting a good shot at reaching their lofty goal.
Schofield says that its ‘Thundavettors’ and ‘Thunda-champions’ — who are category-specific industry professionals’ — both review and guide project creators. That’s unprecedented as far as we know — the crowdfunding slash accelerator combination. It’s set up to create an enabling environment for budding entrepreneurs, says Schofield. Thundafund’s focus is initially on projects with a creative or innovative base, while also encouraging a strong positive social or environmental impact.
How does it work? You know the drill. At its core, a crowdfunding platform like Thundafund allows a large number of people to each back a new idea or project by pledging with a small amount of cash. Project creators present their idea on the Thundafund platform and in return for various levels of financial backing; they offer ‘in-kind’ rewards – produced through the project itself. “Many grains make a sand castle – and soon these small amounts add up to the capital required,” says Schofield.
Schofield points to the massive success of the ‘Pebble Watch’, launched on the US-based Kickstarter — which over 68 000 people backed raising US$10.27 million for its founders — in 30 days — and well-known actors crowdfunding their own movies. Veronica Mars creator Rob Thomas and actress Kirsten Bell were 285% funded for The Veronica Mars Movie; Zach Braff 155% for Wish I was Here — both on Kickstarter. And currently, James Franco for Palo Alto Stories on IndieGoGo.
That’s cool, but is South Africa big enough for another crowdfunding platform? Maybe. Thundafund’s fuel is fanned by its founder’s credentials as well as its network.
Patrick Schofield is an award-winning social entrepreneur — Entrepreneur of the Year – Top Billing, Business Personality of the Year – Cape Times, Social Entrepreneur of The Year for South Africa & Africa – Ernst & Young, Schwab Fellow – World Economic Forum community. Thundafund, in development since 2011, has a partnership with Buzzbnk.org, a UK-based crowdfunding platform, lending it international reach.