entrepreneur

3 Ways the US Supports Promising African Entrepreneurs

“I’m here because, as the world gathers in New York City, we’re reminded that on so many key challenges that we face – our security, our prosperity, climate change, the reduction of conflict – Africa is essential to our progress. Africa’s rise in not just important to Africa, it’s important to the entire world.”

–  United States President Barack Obama

Many African countries are experiencing tremendous economic growth, and while more work remains to be done, the future seems promising. One factor that has contributed significantly to Africa’s success is the number of bright, hardworking entrepreneurs on the continent. These entrepreneurs have successfully launched startups in a number of economic sectors, including finance, financial technology, solar and alternative energy, education and training, and many others.

Leaders of nations around the world understand and appreciate the importance of an economically-viable Africa. As such, these countries have committed significant resources to stimulate an African economy brimming with potential.

This article examines three of the organizations the US government has established to help buttress Africa’s growing economy. In particular, it discusses a number of commitments made to assist African entrepreneurs.

  1. YALI and the United States African Development Foundation

YALI logoIn December 2013, President Obama started a program called the Young African Leaders Initiative (YALI) to “provide virtual resources and vibrant physical spaces to equip young African leaders with the skills and connections they need to foster change in their communities and their countries.” Members of YALI have access to virtual training in leadership and entrepreneurship, as well as a Facebook group, through which they can connect with other young leaders.

In August 2016, the United States African Development Foundation (USADF) awarded 50 African entrepreneurs from 20 countries a total of $1.25 million. These new business owners will use the money as seed capital for growing their respective companies and social ventures. Since 2014, USADF has awarded more than $2 million of grant funding to 95 YALI entrepreneurs.

  1. African Women’s Entrepreneurship Program

Women comprise a significant number of Africa’s entrepreneurs and business leaders. To empower this important demographic, the Obama administration designed and implemented the African Women’s Entrepreneurship Program (AWEP). The rationale behind the initiative’s founding is that, while African women provide a disproportionate AWEP logoamount of the continent’s labor, they often lack or are denied access to the necessary resources needed to drive economic growth. Furthermore, while Africa’s female entrepreneurs have made significant contributions, they remain economically disenfranchised in several areas, such as Sub-Saharan Africa.

To counteract the obstacles to African women’s full economic participation, AWEP establishes networks of women entrepreneurs. Through these connections, women business owners can grow their companies, increase trade, improve the business environment, and give voice to important issues in their communities. Entrepreneurial sectors represented by AWEP include agri-business, fashion, food processing, and home décor and textiles.

  1. United States Agency for International Development

The United States Agency for International Development (USAID) focuses its efforts on “expanding and deepening partnerships with African governments, businesses, universities, and civil society— as well as with the new generation of African leaders, thinkers, entrepreneurs, and innovators, who are leading the transformation of their USAID logosociety.” Currently, USAID supports a variety of African energy entrepreneurs, particularly those who aim to provide electrical power to Africans who are off the grid.

In August 2015, President Obama announced the awarding of up to $100,000 to 11 energy companies from Ethiopia, Ghana, Kenya, Nigeria, and Tanzania. Via a collaborative partnership with General Electric (GE) Africa and the USADF, USAID has committed to supporting novel energy solutions with the goal of expanding access to affordable, reliable, and sustainable power sources.

Entrepreneurs benefitting from the funds are working on a number of energy solutions, such as home solar systems, solar-powered mini-grids, and micro-financing of assorted energy technologies, predominantly for rural communities. Of the projects that received funding, five specialize in solar systems, three are biogas regeneration projects, and one is constructing a small hydro-electricity power plant. As these firms complete their projects, nearly 10,000 Africans will gain access to electricity and power for the first time.

Future US Commitments in Africa

President Obama spearheaded all three of the abovementioned organizational mechanisms supporting African entrepreneurs. Because the President is nearly at the end of his term, it is difficult to predict whether or not such efforts will continue after he leaves office.

Fortunately, the administration has been working closely with the private sector in efforts to keep the projects funded. The Overseas Private Investment Corporation (OPIC), for example, plans to contribute $200 million as part of a $450 million loan from Equity Bank Group to small and medium-sized African enterprises focused on young people and women over the next four years.

In collaboration with Deutsche Bank, USAID undersigned $25 million of the $50 million to be distributed to social enterprises in developing nations around the world, including Sub-Saharan Africa. According to the White House website, these funds will be used to support entrepreneurs in the energy, financial services, and health sectors.

At the Global Economic Summit (GES) of 2015, the President reemphasized the importance of private sector leaders supporting entrepreneurs around the globe, including in Africa. At the conclusion of GES, it was revealed “private sector companies…committed to train and mentor over 1 million burgeoning entrepreneurs and pledged nearly $700 million of capital.”

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Nigeria

Mark Zuckerberg Aims to Boost Startups in Nigeria

“I’m excited to see what Nigerians build next!”

– Facebook Founder/CEO, Mark Zuckerberg

Mark Zuckerberg
Mark Zuckerberg | Kris Krüg | Flickr

Mark Zuckerberg is perhaps the epitome of entrepreneurial success. Having founded Facebook in his dormitory at Harvard University, Zuckerberg leads a company that is now worth around $362 billion. His personal net worth? In the neighborhood of $54 billion.

Despite his overwhelming success, “Zuck” is commonly praised for his modesty, along with an unrelenting focus on making the world better. Zuckerberg, along with his wife, Priscilla Chan, launched the Chan Zuckerberg Initiative in 2015. According to its website, the organization was launched with the mission to “advance human potential and promote equality.” To help fund the initiative’s ambitious framework, Zuckerberg locates, empowers, and supports talented visionaries wherever they may surface.

The motivation behind the Chan Zuckerberg Initiative is pivotal to understanding the couple’s vested interest in African countries and other developing nations around the world. In a video interview on the initiative’s website, Zuckerberg and his wife speak passionately about human potential. He stated, “The only way that we reach our full human potential is if we’re able to unlock the gifts of every person around the world.”

Perhaps there is nowhere else in the world where is talent more ubiquitous—and yet, untapped—than in the West African country of Nigeria. Educated, entrepreneurial, and driven are three phrases that aptly describe a large share of the country’s people.

This article discusses Andela—a promising Nigerian company—and the country’s capable workforce that have drawn Mark Zuckerberg’s involvement. In addition, the following details the inferences that can be made of Zuckerberg’s first major investment in a private company and why Andela—Nigeria as a whole—is deserving of such.

Andela and African Education

andelalogoNigerian startups appear to be of particular interest to Mark Zuckerberg. This is evident from the dollars invested in nonprofit causes. In June, Zuckerberg and his wife’s initiative led a round of Series B funding for Andela—a Nigerian company that trains and deploys software developers—helping to amass $24 million for the (then) startup. In a statement issued about his investment in Andela, Zuckerberg noted, “We live in a world where talent is evenly distributed, but opportunity is not. Andela’s mission is to close that gap.”

Zuckerberg’s investment in Andela is noteworthy for a couple reasons. First, this was the initiative’s first major investment in a private, for-profit company. It is telling that, out of the likely multitudes of entrepreneurs that sought funding, Chan and Zuckerberg invested in a Nigerian-based startup. Second, the venture falls in line with one of the initiative’s founding tenets: enhancing education and personalized learning. It appears that Zuckerberg’s stated mission in developing the initiative also pertains to the profit-seeking arena.

Investment in Andela may also support the third pillar of the Chan Zuckerberg Initiative: advancing opportunity. Nigeria is considered a nation ripe with human talent, particularly in the fields of information technology, software development, and computer science. However, this abundant talent pool is lacking in job opportunities. Approximately 45 percent of Nigeria’s college graduates are unemployed. This may help to explain Chan and Zuckerberg’s interest in Andela, as the company trains and places applicants into well-paying jobs.

On a related note, Zuckerberg seemingly devotes a considerable amount of his resources to training and education-related investments. In 2010, the Facebook CEO made headlines with a $100 million donation to public education in Newark, New Jersey. At the time, New Jersey public schools were facing drastic cuts to their budget, severely handicapping the system. Zuckerberg is a fierce advocate of education and training, whether in the public or private sphere.

In the area of information and education, Zuckerberg partnered with Nigeria’s largest mobile network with the goal increasing Nigerians’ access to the web. As a result, a number of Nigerians who previously lacked Internet access or any other means of information, were able to go online at no cost. The Free Basics program, as it’s called, is active in more than 40 countries, half of which are in Africa.

Future Developments

On August 30, Zuckerberg announced his visit to Lagos, Nigeria, on his Facebook page:

“Next stop: Lagos! This is my first trip to sub-Saharan Africa. I’ll be meeting with developers and entrepreneurs, and learning about the startup ecosystem in Nigeria. The energy here is amazing and I’m excited to learn as much as I can.” Nigeria is also home to Facebook’s largest African market, with over 16 million visitors to the social media site.

Co-Creation Hub NigeriaDuring his trip to Lagos, Zuckerberg visited the Co-Creation Hub Nigeria (CcHUB), where he met with young children attending a coding camp. CcHUB functions as a “tech lab” where hackers, impact investors, technologists, government, social entrepreneurs, and tech companies meet in an effort to create solutions to current social problems impacting the country.

At present, Zuckerberg is continuing his trek through Nigeria. Known his secretive nature, “Zuck” hasn’t produced his travel plans.

News sources in Nigeria speculate that he will visit Andela’s operations and meet with other promising entrepreneurs.

programming language

Andela: The Amazing Startup That Powerful Investors Love

“There are five open jobs in the U.S. for every software developer looking for one. It is a challenged ecosystem. We’re able to tap into what I argue is the largest pool of untapped brain power in the world. – Jeremy Johnson, CEO/Cofounder of Andela on what motived him to start the company

Introduction

Andela LogoWith multiple job openings for every software developer and computer programmer, it is very difficult to find information technology (IT) talent. Some estimate that the U.S. will need to increase its IT workforce by nearly 50 percent over the next two years.

Perhaps more important (and disheartening) are the unemployment statistics in Africa. Some African nations cite youth unemployment that hovers around 50 percent. In Lagos, Nigeria, there are roughly 11 million young people who are unemployed, and 20 percent of these are college graduates.

Analysis conducted by the Brookings Institution states that when youth unemployment is taken into account, about 90 percent of young people are considered unemployed or underemployed in some areas of the continent.

Filling the IT labor gap

This is where Andela comes in. The company has ambitious plans, which include training more than 100,000 software developers and computer programmers in the next decade—all of whom come from Nigeria or neighboring Kenya.

Andela doesn’t simply seek to fill the significant gap that exists between IT jobs and available talent; the company is also striving to attract more women in efforts to fill these roles. According to labor statistics, only about 20 percent of software developers are female.

To do its part, Andela aims to raise the total of women working in its software development area to 35 percent. “We just weren’t where we needed to be. We have struggled to have that percentage. It’s getting the word out there to young women that we’re an employer to be actively excited about. Then, getting word out to their families that Andela is a safe place to work,” says cofounder Christina Sass.

History of Andela

Andela was founded in 2014 by Jeremy Johnson, an education technology entrepreneur; Christina Sass, an American education advocate; Ian Carnevale, a graphic designer and entrepreneur; and Iyinoluwa Aboyeji, a Nigerian entrepreneur.

programmingAboyeji, selected for a prestigious economic award by the World Economic Forum in 2012, says of the company’s founding: “Andela began after my friend and mentor Jeremy Johnson visited Nairobi in 2013 and saw how a lack of career paths for young people was contributing to Africa’s youth unemployment.”

Applicants that make it past the company’s rigorous application screening process are invited to attend training, or “boot camp.” It is at this juncture that accepted applicants are referred to as fellows. One of the company’s selling points is that it pays the equivalent of a Nigerian upper-middle-class wage while attending training. Following successful completion of its training program, Fellows are placed with prominent international companies, including Microsoft and Udacity.

To date, the startup has received over 40,000 applications in a part of the world where IT training and education is nearly absent. Of these applications, it has accepted just .7 percent. CNN dubbed Andela “a startup more elite than Harvard” in a recent article. (Harvard accepts approximately 6 percent of applicants.)

Johnson adds: “Our plan is to train 100,000 genius-level young people across the continent over the next 10 years, but we’re always going to have very selective approaches. What we care about is being able to train in a really high-quality way… the reason we’re able to do that is because the people that are in the program and the developers that Andela produces are head and shoulders above what you’d expect for a junior developer.”

Despite its selectivity, the company aims to have a mix of experience and education within its ranks. While the enrollment statistics are not made available, the founders state that some have college degrees. Many students have taught themselves basic computer science. Others have taken free online courses, while still more have no formal education at all—just an aptitude and willingness to learn computer programming.

Upon their placement with a company, the fellows have the option to take advantage of Andela’s professional development courses. These courses range in subject matter, but generally focus on either technical or soft skills.

The company’s business model and overall mission have attracted a number of prominent investors, none more so than Mark Zuckerberg, founder and CEO of Facebook. The Chan-Zuckerberg Initiative, founded with Zuckerberg’s wife Priscilla Chan, reportedly invested several million dollars in the startup. Other investors of the promising new company include Facebook’s cofounder Chris Hughes, AOL cofounder Steve Case, and Carmelo Anthony, a professional basketball player for the New York Knicks.

The Zuckerberg-Chan initiative will reinvest any profits back into its organization. The initiative has historically focused on investments in education and health care.

office

Improve Business Success with Backing from these Organizations

For more than a decade, the continent of Africa has experienced robust economic growth. One of the reasons driving this positive change is the greater availability of support for the African startup community. Both public and private businesses have benefited from venture capitalists, who have invested time and money into new ideas, thus helping to sustain more local businesses, boost economic activity, and create jobs. Businesses in the agribusiness and ecommerce industries have gained considerable traction, as have those in the financial services and computer software sectors. Likewise, enterprises in the media, Internet, and professional services industries are attracting interest from African entrepreneurs and their backers as well. If you are looking for funding and business support for your venture, consider the following organizations.

Tony Elumelu Foundation Entrepreneurship Programme

tony elumelu foundation logoNamed after its founder, the Tony Elumelu Foundation Entrepreneurship Programme supports businesses across the continent through training and mentorship. The $100 million fund, which has a goal of working with 1,000 entrepreneurs annually for the next decade, also offers crucial grants to help business owners see their concept through fruition. These funds do not need to be repaid. In order to be considered for funding, participants must complete a 12-week program and a two-day boot camp. Additionally, successful completion of the three-day conference, the Elumelu Entrepreneurship Forum, is necessary to receive funding. An additional $5,000 in second-stage seed capital is also available for qualifying companies that demonstrate progress beyond the program.

Investment AB Kinnevik

investment ab kinnevik logoSweden-based Investment AB Kinnevik commits approximately eight percent of its $7 billion in assets to African ventures. The company takes primary interest in entertainment, financial services, ecommerce, and communications businesses and has been a crucial supporter of Jumia, Konga, and other African companies. Recently, the investment firm made a statement regarding its performance in 2015. Many of the companies in its portfolio delivered strong performances over the past fiscal year, which helped increase Kinnevik’s dividend per share and share price by three percent. Additionally, the company sold its interest in Avito, which provided exponential returns against its initial investment. To continue its success, Kinnevik looks to add to its existing portfolio by identifying companies that provide innovative solutions for consumer needs and demonstrate the ability to create repeat customers. Prospective investment targets must also have a strong leadership team and a sustainable business model, and they must demonstrate flexibility in managing risk to optimize returns.

88mph

88mph logoLaunched in 2011, 88mph is a business accelerator that provides seed funding. It operates in three countries in Africa, and technology ventures are its sole focus. Predominantly, the organization backs entrepreneurs with viable web and mobile solutions. As of 2016, the accelerator has allocated seed cash in excess of $1.5 million to a variety of companies, ranging from Baby Group, which offers products for new parents and their babies; to Byte Money, a startup focused on serving the insurance industry through a mobile payment platform. In 2015, 88mph took a break from funding new ventures. Having already invested in 36 companies, the accelerator transitioned its focus to helping its portfolio companies grow and further develop. The company will continue to monitor promising ventures in emerging markets.

African Development Foundation

USADF logoAlso known as the USADF, the African Development Foundation operates in the United States as an independent federal agency. The organization offers seed funding and technical support to African entrepreneurs who are helping their communities alleviate food insecurity, improve human development needs, increase income levels, and create sustainable employment opportunities. USADF has touched the lives of millions of Africans through an active portfolio of more than 320 grants exceeding $50 million in total.

The organization is currently accepting grant applications from ventures that focus on agriculture and assist low-income communities. Additionally, it is looking for entrepreneurs who are working to provide greater access to sustainable electricity, as well as those who are striving to advance democratic governance and peace in their nations. To these respective groups of entrepreneurs USADF offers the Power Africa and Young African Leaders Initiative (YALI) grants. To be eligible for a grant, companies must be completely African-owned and managed. Applicants must also show documentation that states their company operates as a legal entity in the country in which they are based. Other criteria include demonstrating an ability to efficiently use funds and having a clear process to use and manage USADF grant monies.

African Women’s Development Fund

AWDF logoSupporting African women-owned businesses and entrepreneurs, the African Women’s Development Fund (AWDF) has awarded grants to organizations in 42 countries since its inception in 2001. The fund has extended grants of up to $50,000, totaling $26 million, to more than 1,200 organizations to date. The grant program is made possible through partnerships with prominent global organizations, including Match International, Carnegie Corporation, and the Ford Foundation. Private and public foundations as well as bilateral and multilateral organizations, such as UN Women and the UK Department for International Development (DFID), also provide support. AWDF awards grants to organizations operating in six thematic areas, ranging from women’s human rights to economic empowerment.

 

 

funding

Grant and Subsidy Opportunities that Can Fund Your Venture

Research and development is a critical part of establishing a sustainable business. Knowing how to obtain funding to support this segment of your venture will help you improve your business model and better position your products and services. The key to increasing funding opportunities is to register your venture as a nonprofit. This makes your business eligible for specific grants that can be applied toward evaluating viability in a specific market. Once out of the research and development stage, you can create a commercial entity to support products and services to sell. If you follow this approach, consider the following organizations that offer grants and subsidies:

The Africa Enterprise Challenge Fund

AECF LogoThe Africa Enterprise Challenge Fund (AECF) supports private-sector entrepreneurs in in sub-Saharan countries. The organization specifically targets ventures in the agricultural and agribusiness sectors as well as those focused on climate change and renewable energy. Candidates must contribute to the growth of rural African economies to be considered.

AECF can award a single entity a grant up to $1.5 million; however, a grant or repayable grant totaling $750,000 is more typical. Candidates must submit an application and a detailed business plan to be considered. If selected by the investment committee to receive an award, the recipient must take part in an induction workshop and undergo a contracting and disbursement process to ensure he or she comprehends the stipulations of accepting a grant.

Following disbursement, grantees need to report their business progress at least semi-annually. Additionally, they must keep in contact with an AECF-designated project manager throughout the life of a grant.

The Ford Foundation

ford foundation logoDistributing approximately half a billion dollars in grants annually, the Ford Foundation lives by the statement, “all people deserve the opportunity to fulfill their potential, contribute to society, and have their voices heard.” The foundation supports the public good by supporting organizations worldwide that positively influence the advancement of human knowledge and creativity, and the promotion of accountable governance. Additionally, it advocates ventures that tackle poverty, social injustice, and education. The grant process is very competitive. Out of the approximately 40,000 applicants the foundation receives each year, it typically approves only 1,400 for funding.

The foundation also works with a program team to discover organizations with bold ideas and scalable solutions, and offer them financial backing and business services. Funding is only available to approved individuals, whose companies comply with US laws enforced by the Internal Revenue Service (IRS). Further, the foundation takes into consideration anti-terrorism financing rules as it assesses candidates. If chosen, a grantee should expect to keep in close contact with his or her program officer and attend meetings that require written reports outlining progress.

Google Ad Grants

Google ad grants logoThrough its online advertising tool division and the Google for Nonprofits program, Google offers $10,000 grants in in-kind AdWords each month to help nonprofits build awareness of their mission. Recipients of the credit can plan ads to appear alongside Google search results, thus making more people aware of their cause.

To ensure the ads benefit the user, the company gives the grantees access to conversion tracking and Google Analytics. Since its launch, the program has positively impacted more than 20,000 nonprofits in more than 50 countries, including South Africa, Kenya, and Botswana.

To qualify for the grant, organizations must meet the requirements listed in the Google for Nonprofits Eligibility Guidelines. Candidates must also abide by Google’s rules regarding nondiscrimination and donation practices. Once awarded funds, grantees must avoid utilizing the service for commercial advertising, unless all of the proceeds it earns from the products and services sold support its cause.

The Global Greengrants Fund

global greengrants fund logoCatering to grassroots activists, the Global Greengrants Fund aims to promote environmental and social justice around the world. The fund distributes small grants in order to make a difference in more locations. Areas of support include climate change, fresh water, biodiversity conservation, women’s rights, agriculture, and forest and land rights.

Its flagship program is Green Grantmaking, which supports thousands of projects spread across 163 countries with grants averaging $4,800. Referred to as Greengrants, the funds support initiatives that pay equal attention to the care of people and the environments in which they live.

The Global Greengrants Fund doesn’t accept unsolicited applications. Parties eligible to receive a Greengrant must be recommended by a Grant Advisor. However, the fund realizes that many groups will not have access to an Advisor, so it lists alternative funding opportunities on its website, http://www.greengrants.org. Suggested organizations include The Guardian International Development Achievement Award, the Yale World Fellows program, and The Equator Prize, among others.