Interest in Zimbabwe’s tech startup scene picks up, but startups still struggling

Today Zimbabwe marks 38 years of independence from British colonial rule. This will be the first Independence Day the country has had under a president other than Robert Mugabe, this after President Emmerson Mnangagwa assumed office last year in November.

Five months on, Ventureburn looks at developments in the country’s tech startup scene under the new administration and the challenges Zimbabwean tech startups are facing.

ICT Innovation Drive launch

By far the biggest development to have taken place in the country’s tech startup scene since President Mnangagwa’s inauguration is his March launch of the ICT Innovation Drive which saw six startups get selected from an applicant pool of 188 startups to get funding.

Under the initiative, which is run by the ICT ministry as part of a $25-million fund, the six selected startups will receive equity-free funding in the form of business loans, in addition the companies will also be assigned mentors to assist with coaching and business support.

The ministry has yet to announce how much in funding the six startups will receive.

‘You need to make it in the first three months or else you’re gone,’ – MyRunner founder and CEO Vusumuzi Mkhwanazi commenting on the challenges facing Zimbabwean startups

The ICT Innovation Drive was first announced in 2016 by ICT Minister Supa Mandiwanzira. A call for applications for startups to access the fund was issued by telecoms regulator, the Postal and Telecommunication Regulatory Authority of Zimbabwe (Potraz) last year.

The initiative is financed by a levy of 1.5% on the annual gross revenue contributions from mobile network operators Econet, Telecel and NetOne.

The ICT Innovation Drive aims to, among other things, fund tech startups and set up innovation hubs around the country.

International interest picking up

Over the last year several international organisations have shown interest in the country’s tech startups and its ecosystem.

Last month a delegation of EU ambassadors from the Netherlands, Britain, France, Romania, Portugal and Sweden visited The Tech Village — a Bulawayo-based tech hub — to meet with entrepreneurs in an effort to assess opportunities and challenges faced by local startups.

Before that, in January, Danai Musandu, an investment associate with Amsterdam-based impact investor Goodwell Investments — which has a €20-million fund for high-growth African startups — visited the same hub for an interface session and to explore the local startup scene for investment opportunities.

Last year three Zimbabwean legal startups — Road Rules, Transparency International Zimbabwe, and the Zimbabwe Environmental Law Association — were selected for the regional finals of The Hague Institute for Innovation of Law (HiiL) annual Innovating Justice Challenge,

In addition, another Zimbabwean startup, e-commerce platform Khoyn, was one of 10 finalists selected to join Startupbootcamp’s first Africa-based accelerator.

More recently MyRunner, an online bus ticket-booking platform, was selected to pitch at the Seedstars Africa Summit, and recently attended and pitched at the Seedstars World Summit held last week in Lausanne, Switzerland.

The startup’s CEO and founder, Vusumuzi Mkhwanazi, won the ticket to pitch at the summit after having won the Zimbabwean leg of Seedstars Africa tour at an event held at the Impact Hub last October.

‘Short runways’

Speaking in an interview with Ventureburn yesterday (17 April), Mkhwanazi — who is currently on a business trip in France — said Zimbabwean startups are “making it happen regardless of what is thrown at them”.

But he said there is little in the way of funding for Zimbabwean startups. “You need to make it in the first three months or else you’re gone,” he said.

The country’s tech ecosystem is not as strong or effective to properly support tech entrepreneurship, he added. Entrepreneurs, he said, are “more or less left on their own”, with entrepreneurship not celebrated as it should be in the country. However, he believes this will change once tech entrepreneurs start getting more exposure.

He also pointed out that when it comes to policy, “a whole lot needs to be done”. He singled out issues around the ease of doing business in the country and the setting up of strategic incubators.

“Setting up a meeting with the government or corporates takes a long time,” he said, adding that in other countries, governments are partnering more effectively with entrepreneurs.

The country’s fragmented tech startup ecosystem also doesn’t help, he said. “Guys in Zimbabwe are doing things despite the ecosystem being fragmented. There is no one place startups gravitate towards in terms of incubation or support,” he said. Collaboration he said is key: “Universities and polytechnics have to play a role”.

He however welcomed the Zimbabwean government’s ICT Innovation Drive saying it was a “good vision and a foot in the right direction”.

More engagement

In a phone call with Venturebun today, Takunda Chingonzo, founder of The Tech Village, said the launch of the ICT Innovation Drive is the “first positive indicator” on the new administration’s support for local startups.

Chingonzo said in recent months there has been more engagement between the government and the startup ecosystem.

“Parastatals like Telone are now more aggressive with wanting to work with innovators,” he said. He added that Potraz is looking into the possibility of licencing startups to make use of new bandwidth that has recently been freed up, while the Ministry of Women and Youth Affairs is looking into how it can work with young innovators.

He said it remains to be seen whether the visit by the EU delegation last month to his hub will translate into investments in any startups.

“They were simply coming to find out what is on the ground, and if there are opportunities for investment,” he said.

However, Chingonzo believes most startups are not yet ready for investment, with some yet to sort out legal issues around intellectual property and financials.

“The challenge is most startups are not yet at that point,” he said, adding that his organisation is working on creating a benchmark on what startups should be like.

Featured image: #VisitZimbabwe via Twitter