The e-commerce industry in South Africa has experienced a boom since the start of the COVID-19 pandemic — and Black Friday was no exception….
In recent years African startups have taken home a string of prizes from Swiss-based Seedstars, one of the world’s leading startup competitions.
This is testament that Africa can indeed produce ventures able to compete on the global stage, says Seedstars CEO Alisée de Tonnac (pictured above).
But De Tonnac says although Africa is a “land of untapped opportunities” (see last year’s Africa winners here), it still has significant risks, related to socio-economic instability.
In addition, potential investors don’t always understand the complex dynamics and cultural specialities of each country in the region, she says.
In an emailed interview with Ventureburn, De Tonnac details the impact that Seedstars has made, why the organisation is looking to recruit more women-founded startups and the idea behind its new investment readiness programme.
What impact has the Seedstars competition had on emerging-market startups?
Since inception, our mission has been to support entrepreneurs in emerging markets with better investment and educational opportunities.
Over the last six years, we’ve managed to engage with more than 40 000 entrepreneurs from emerging markets who became participants of our events and programmes. We now represent a network of around 2000 investors actively investing in emerging markets.
Looking more specifically at the alumni of the Seedstars World competition, which now represent 275 startups, what we know is that 85% of the companies still exist, they have created over 2500 direct jobs and fundraised over $250-million.
For more than 40 startups that we’ve accelerated, the follow-on funding rate is over 40%, which is as high as (top accelerators – Ed) Techstars or YCombinator achieve.
Of course, these numbers would be impossible without our partners, supporters, mentors, and ambassadors in every region who create valuable connections enabling the ecosystem to flourish.
However, it is still difficult to measure the impact as a lot is quite intangible.
I think the coolest and most recent story is that of our winner of the Transforming Education Prize, Schoolap, which further to winning the prize was invited to meet with the president of the Democratic Republic of Congo (DRC), who recommended their project to the Ministry of Education and this led to signing a partnership for 2.3 million students.
The company was also approached by a couple of local and international investors, and a crucial collaboration is in progress with the largest bank in the country which will not only sponsor the production of the educational content but will also be financing Schoolap’s activities and development.
How are African startups performing, compared with their counterparts on the programme?
Over the last couple of years, we have witnessed that African startups take home some of the biggest prizes at the Seedstars summits.
I believe that it’s a testament to the fact that Africa is indeed producing ventures that can compete on the global stage and do well at all levels of their businesses.
However, it is also a bit of a numbers game, and we are excited about sourcing even more entrepreneurs, especially the ones that are more mature and ready to scale.
But the challenge that remains unaddressed is that although this is the land of untapped opportunities, there are still a lot of risks related to the socio-economic instability. Moreover, potential investors do not always fully understand the complex dynamics and cultural specialities of each country in the region.
But we are already working on tackling those challenges, and as an example here is the launch of $100-million Seedstars Africa Ventures investment fund this spring.
Seedstars is now looking to increase the number of women-founded startups selected and the number of women mentors and judges. What is the idea here?
We are not putting quotas on the number of women-founded startups that need to be selected in our programme, however, we are working very hard with the different teams and partners in figuring out how best to get more women-led businesses because they simply are the best (see this story).
We are looking at the whole funnel from sourcing and screening to selecting the companies and trying to highlight our pitfalls and experiment on ways to get more and better women-founded businesses involved.
This means we need to figure out how best we can serve the community of women-led businesses already existing and how best to participate in building more women-founded businesses. And for that, we are testing new sourcing channels, new ways to communicate (as simple as changing the wording of our communication) to organising specific training programmes and more personalised meetings to support the next generation.
With regards to getting more women stakeholders (mentors, jury, speakers etc) onto the programme, this is another action we believe will have an impact in the mid-term, as the selection of the startups will be more diverse if we have a more diverse representation across all communities involved in building such an ecosystem.
In 2018, we got a chance to meet extraordinary womenpreneurs and leaders of companies such as Cowtribe, Bluewave, Medsaf, MyFoodness who not only build efficient solutions for their societies but serve as an inspiring example for women and girls in Africa.
How has your investment readiness programme performed so far?
We launched the investment readiness programme (IRP) only a month ago, so it’s too early to talk about the impact and money raised as a result of the programme.
We received more than 700 applications from all over the world, and so this number is one indicator that there seems to be a demand for such type of programmes. Our team selected 78 startups for the first programme batch, 20 of which are African businesses.
In upcoming weeks, we’ll be working closely with the participants to prepare them for the first demo day which takes place at the end of next month.
From that moment on, we intend to have some initial results on the startups’ performance. To have a greater engagement of entrepreneurs, we are also planning to launch a virtual programme.
Africa is fairly divided between different regions, are we going to see sub-Saharan and North African startups compete under the same segment (rather than have the North African cities fall under the MENA region?)
I agree that ideally we would want to have a more divided map to be as valuable as possible, but it becomes difficult for me to run so many teams across so many regions.
We are already working hard to see how we can better customise our events and programmes locally, on a country basis, rather than on a one-continent-fits-all type of model, and that is why the IRP, I believe, has a lot of potential because education before anything needs to be highly customised.
In five years’ time what do you aim to achieve with the new $100-million Seedstars Africa Ventures investment fund?
Five years in, the fund will have already selected all the investees — over 30 tech and tech-enabled companies and over 10 dynamic enterprises.
Our achievement at that stage will be that we’ve gathered together a portfolio of innovative, high-growth companies to support in any way we can.
By then, we will hopefully have helped some regional champions emerge, but for the moment, we’ll still be looking forward as years five to 10 are critical in fostering exit opportunities and producing the financial return for the fund investors.
Read more: Seedstars to expand local bootcamps, add more benefits in 2019 competition
Read more: Here’s what you should know about Seedstars’ $100-million fund for African startups [Q&A]
Read more: Seedstars announces $100m fund to invest in African tech startups [Updated]
Read more: Meet the African startups that won this year’s Seedstars World pitch events [Updated]
Disclosure: Ventureburn is a Seedstars media partner.
Featured image: Seedstars CEO Alisee de Tonnac (Facebook)