Since its launch in 2016, the Ecosystem Accelerator programme has sought to bridge the gap between mobile operators and start-ups in emerging markets. The programme provides mobile-first start-ups with grant funding, technical support and opportunities to develop strong partnerships with local mobile operators. Spanning across two rounds, the Ecosystem Accelerator programme has built a portfolio of 24 start-ups across Asia Pacific and Africa. Collectively, these companies have raised an additional £32.4 million in funding as of November 2018, representing more than 10 times the amount the programme has disbursed to these ventures. The 24 projects have had a positive socio-economic impact on over one million citizens. During the first quarter of 2018, the third round of our Innovation Fund was launched and 699 applications were submitted from African and Asia Pacific start-ups. After having looked at these applications from a global and Asia Pacific angles in two previous blog posts, here is a deep-dive into the African applications received.
484 start-ups from across 30 African markets applied. Based on sub-region splits, West Africa leads the way with 44 per cent of the total African applications, East Africa accounted for 37 per cent, Southern Africa (9 per cent), North Africa (6 per cent) and Central Africa (4 per cent). Looking back at the past two rounds, the number of applications received from African start-ups has grown: From 304 applications received for our Round 1, the number has reached 455 for Round 2 and now 484 for Round 3.
Looking specifically at the top applications (123 in the case of Africa), Nigeria and Kenya led the application pool with 18 per cent each, followed by Uganda (13 per cent) and Ghana (8 per cent). Notably, 18 per cent of the top African start-ups were headquartered in Francophone Africa, a sub-region from which we have traditionally received fewer applications. Start-ups from six Francophone countries (Benin, Burkina Faso, Cameroon, Cote d’Ivoire, Guinea, Madagascar and Senegal) made it to the top applicant list this round, compared to only two in our previous round.
A deeper look at the profile of these start-ups shows that on average, the top African start-ups were two years and eight months old with 14 team members. On the funding side, 52 per cent had raised less than £100,000 before applying for our Innovation Fund. Insights from the founding team’s demographics reveal that 38 per cent of the start-ups have been founded or co-founded by women entrepreneurs. This figure has grown significantly from 27 per cent in Round 2. Similarly, the number of women in management teams climbed from 38 per cent in Round 2 to 82 per cent in Round 3.
Looking now at sectors, Fintech start-ups came out ahead with 24 per cent of the top applications, followed by Waste and Clean Tech and HealthTech sectors with 14 per cent each, Agritech (12 per cent), Transport Tech (10 per cent), E-Commerce (9 per cent) and EdTech (6 per cent). Examples of start-ups operating in the leading sectors include Fintech start-up Pezesha (a P2P marketplace that allows Kenyans to loan to Kenyans securely via mobile money) and BenBen (a web and mobile application that allows Ghanaians to manage their land records and perform land transactions).
A key focus of the Ecosystem Accelerator programme is the collaboration between mobile operators and start-ups. It was encouraging to note that, in this regional sample of start-ups from Africa, 42 per cent are already partnering with local mobile operators like MTN, Orange, and Safaricom, among others. Similar to our findings on the global pool of applications, most of the top African start-ups were keen to work with mobile operators mainly to access to their mass payment channels (mobile money) – 41 per cent of the African application – or communication channels (SMS, USSD, Voice, data channels) – 22 per cent of the African applications.
Linking to our research on tech hubs in Africa, we also found that more than half (56 per cent) of the top African applications have received support from local incubators or accelerator programmes such as Active Spaces (Cameroon) and BongoHive (Zambia), CcHUB (Nigeria), MTN Y’ello (Congo and Cote D’Ivoire) to name a few.
Finally, we observed that these start-ups are tackling 13 of the 17 UN Sustainable Development Goals (SDGs) with three being most frequently mentioned by the applicants: SDG 1 (No Poverty) – 34 per cent, SDG 3 (Good Health and Well-being) – 16 per cent and SDG 8 (Decent Work and Economic Growth) – 14 per cent.
After reviewing each of these 699 start-ups’ applications and conducting a more in-depth due diligence on close to 30 of them between May and September 2018, the GSMA Ecosystem Accelerator programme is now proceeding with the last phase of the selection and contracting process. Stay tuned for the Round 3 start-ups portfolio announcement in the coming weeks!