€130m earmarked for African tech start-ups
French President Emmanuel Macron has announced a commitment of €130-million over the next three years to support the Digital Africa initiative and programmes involving key stakeholders within Africa's tech ecosystem, including start-ups, venture capitalist, incubators, technology clusters and academia.
Macron made the announcement during the recently hosted New Africa-France Summit in Montpellier, alongside members of the Digital Africa team which unveiled new programmes.
These programmes include the Fuzé project, that focuses on Francophone Africa and aims to support at least 200 tech start-ups as of early 2022 by launching a new small ticket fund (in stages, from €10 000 to €200 000) taking the form of repayable loans.
Digital Africa has also joined forces with Make IT and the German government to set up Talent4StartUps, a fellowship programme designed to meet the needs of talents that have been trained in tech and digital, and whose beneficiaries will be put in touch with start-ups actively recruiting.
More broadly, Digital Africa will continue to develop non-financial activities (knowledge production, training, networking, research, and support for the evolution of regulatory frameworks) while having the opportunity to raise funds from other public or private donors.
This will be enabled by its new status as a subsidiary of Proparco, which is the Agence Française de Développement (AFD)’s structure dedicated to the private sector.
This ambitious change will give Digital Africa the opportunity to deploy direct seed financing capabilities for high potential start-ups across the continent, according to the partners.
Digital Africa aims to innovate on governance, with an approach that is both partnership-based and rigorous. The objective is to better reflect the diversity of African tech ecosystems, from a geographical perspective, by ensuring that all the major regions of the continent are represented, and from a skills perspective, by bringing together entrepreneurs but also investors, representatives from training and research organisations, incubators and innovation policy experts.
Digital Africa’s CEO Stéphan-Eloise Gras said: "Digital Africa’s new organisation, redefined with our partners, allows us to reinforce our commitment to ‘made in Africa’ tech innovations and become a factory for future African unicorns. Start-ups need a ‘one-stop-shop’ combining training, research, project-structuring, support to pro-tech and pro-innovation reforms, and financing. From now on, thanks to the merger with Proparco, they will find in Digital Africa a partner capable of offering them support from ideation and seed to growth and hyper-growth. By putting tech at the service of transparency and efficiency in development aid, and by getting closer to the private sector, Digital Africa wants to make a long-lasting difference!”
Digital Africa has announced a roadshow scheduled for the end of this quarter and will stop in several African regions to strengthen connections with key partners and players in African ecosystems, promote the programmes and invite African start-ups to apply.
Gregory Clemente, CEO, Proparco, added, “Bringing together Proparco and Digital Africa will allow for creating a continuum of investment tools from the earliest stages to the most mature projects and create a kind of 'investment value chain' to support African tech entrepreneurs, their scaling up - and their pan-African or international ambitions. We look forward to benefiting from Digital Africa's on-the-ground expertise in this next phase, which will be positive for African digital innovation.”
Khaled Ben Jilani, Senior Partner, AfricInvest, “At AfricInvest, we are interested in projects that have already reached a certain level of maturity in order to support their growth. Of course, they cannot come to us if they have not passed the first stages. In 2019, more than 90% of African start-ups reported difficulties in financing their seed stage. By focusing on this segment and building new direct funding capabilities, Digital Africa will provide an effective response to a real need - and will impact the lives of African entrepreneurs at the start of their businesses”.
Juliana Rotich, co-founder of Ushahidi, an open-source software for information gathering and mapping, and Director of Mookh Africa, an online concert ticket sales platform, said: “The partnerships and activities of Digital Africa will help to share experiences, inspiration and knowledge across borders. The success of the Startup act in Tunisia is one such example that Kenya and other African countries look to. Thanks to Digital Africa’s convening power, we can meet the leaders who made it and learn from them - which would be invaluable.”
Bosun Tijani, Co-founder and CEO, Co-Creation Hub, added, “We need to create value from African tech innovations in Africa - and this will only be possible when the innovation ecosystems are strong and structured enough to retain talent and scale up tech solutions. The priority today is therefore no longer, as it has often been the case, to invest in isolated structures and the personalities that run them - but rather to scale the approach by investing in the systems that will create more high-potential projects and build a truly pan-African digital value chain. Digital Africa shares this analysis - and that is why we decided to work with them".