In 2017, a total of $167.7 million was invested in 201 startups in Africa, which, according to WeeTracker Reseach is a growth of 28% year-on-year with the number of startups being funded increasing from 153 in 2016. This same report reveals that South African startups were the most funded, 74 of them, followed by Kenya where 46 startups were funded and Nigeria takes the third spot with 34 startups funded.
Seeing that there is so much potential for startup growth in Africa, Norwegian accelerator Pangea (pan-jea), has set up base in Kenya with the aim of connecting African startups with the expertise, the networks and the capital that they need to grow.
The company, which was born in 2017, has itself been through an accelerator, The Factory in Norway before leaving the nest and start operations in Africa. Pangea was founded by a group of Africans, from different countries such as Togo, Ghana, Nigeria and Eritrea, living abroad.
The company sprouts from the ashes of the little investment in the startup ecosystem in Africa. Pangea’s idea is to create a pipeline that ensures access to investment for African startups. According to Ahmed Farah, Pangea Accelerator Manager, there are two issues ailing the African startup ecosystem, that is, lack of trust and a lot of investors globally don’t know what’s going on in Africa.
Pangea set out to solve these problems and they would do it in two steps:
- Investment training Program – Pangea ran an investor training program in Oslo, Norway where they trained angel investors on how to invest in African startups. This was just the beginning as Mr Farah tells us that the company will continually train investors who will then invest in the startups that enrol to Pangea’s accelerator.
- Accelerator – The main goal of the accelerator is to make startups investment ready. It will be a milestone-oriented program that will run for three months and at the end of the program, 10 startups will be selected and they will each receive an investment of up to $50,000 per startup, from Pangea’s pool of investors.
Smart Money Investment
Mr Farah tells us that Pangea plans to bring in investors who understand the market that the startups are in so that they can bring in more than just money. “At the end of the day, capital is everywhere, but what you need is expertise,” he says.
He goes further to explain how a fintech startup in Kenya looking to scale to Rwanda would benefit from this since Pangea would source for investors who know that sector so well that they can help you the startup achieve their goal.
“It’s all about creating value and giving yourself a niche where nobody else is”
Pangea also plans to launch a crowd investment platform later on in June. The platform would be like an online marketplace where people can invest in the startups that have gone through Pangea’s accelerator.
These investors would be able to buy and sell shares in different startups, “The African diaspora remits an estimated $160 billion every year back to Africa and most of that money does not go into the startup ecosystem, which is rapidly developing and the idea is how can we channel even a fraction of this amount to startups, imagine the kind of impact that would make,” says Ahmed Farah.
Pangea Accelerator is already receiving applications from all over, especially West Africa. The company partnered with Strathmore University’s @iBizAfrica to launch the accelerator in Nairobi, Kenya. The applications stage will remain open until February 19 and interested startups can apply through the company’s website.
Successful startups stand to receive funding of up to $50,000 alongside coaching by international investors and top business executives.
In a nutshell, Pangea aims to be the linking factor between African startups and investors through its accelerator and investor training programme. Like Mr Farah puts is, “It’s all about creating value and giving yourself a niche where nobody else is.”