According to a paper by the venture capitalist firm Illuminate Ventures, technology firms led by women experience a 35% higher return on investment than those led by men,. That means investors and other venture capitalists lose out by not providing financial support for women-led businesses.
On the surface, sub-Saharan Africa boasts the world’s highest rate of women entrepreneurs, at 27%. Back in 2017, the MasterCard Index of Women Entrepreneurs listed two African countries, Uganda (34.8%) and Botswana (34.6%), as having the highest percentage of women entrepreneurs globally. However five years on, if you were to zoom and look deeper into the matter you’ll find that in many countries in Africa, most female-led enterprises are small businesses with little opportunity for growth. Also, female entrepreneurs are not evenly spread across the continent.
Changing this narrative one edition at a time is the Tech African Women program – a program led by BetaCube and supported by UNECA dedicated to building a strong female-led tech startup pipeline and community in Africa.
With an aim of getting an inside scoop on female-led tech startups in Africa, Capital’s Metasebia Teshome reached out to Ahmed Hadhri, Program Manager for the Tech Africa Women program, to discuss the first edition of the competition amongst other pertinent insights. Excerpts;
Capital: Tell us about Tech Africa Women (TAW) and the overall competition?
Ahmed Hadhri: Tech Africa Women is a program that was launched by the United Nation Economic Commission of Africa in partnership with BetaCube. It is an entrepreneurship program that focused on women led startups in Africa.
One of the objectives of this program was to transform ideas that these women have in to valid business models helping them to change their idea in to reality. Moreover, we wanted to create a connection between different entrepreneurs from different countries and ecosystems. All in all we wanted to harbor a community of women lead startups in Africa.
This was the first edition of TAW, and we started this edition on August stretching to December which was a five month run. For our inaugural program, we targeted countries such as, Ethiopia, Senegal, Tunisia and Tanzania, which of course are two English and two French speaking countries from all of the four regions of Africa.
We started with a call for application on August for women led startups which formed the ideas stage which was centered on at least one of the SDGs of the United Nations. To this end we received more than 331 applications from all over Africa which is 80 percent from the four countries. We selected the best 16 teams from each four selected countries and we invited them to come physically for a three day training on entrepreneurship planning, marketing and business planning and so on.
On the third day, there was a pitching competition from the 16 competitors and we worked with local judges and local trainers in selecting two best teams from each country. So each winning team form each country received a prize of 2000 dollars and then these 8 teams went on a three month incubation program from September to December.
During the incubation program we helped them to; define their models, pin the problem they were solving, develop MVP or prototypes, design their branding logo and the overall platforms including finance administration. We worked with local and international experts to advise them and they had one to one experience sharing sessions. Following the end of the incubation program we had a final ceremony to which we announced the winner on December 21.
To elaborate further, before the end, we took them to a startup tour in Addis Ababa to engage them with different local entrepreneurs which helped them to see the Ethiopian startup ecosystem and assess the overall challenges and opportunities they are facing. We also met with people who are really doing amazing and successful business endeavors.
On the last day, that is, December 21, we had a demo day where these 8 startups presented their ideas in front of four new judges. Their project was evaluated on four elements which are; impact, team, market size and competitive advantages. Based on these, the judges selected Ujana, a Tanzanian e-commerce platform for Sexual-Reproductive health supplies, as the winner of the first edition of the Tech African Women program.
The Ujana platform, which received an injection of $7,000 to help kick start the business will allow youths to be in a safe environment to practice a healthy sexual lifestyle using contraception without judgment of the community.
Capital: Since this was the first edition, what were the learning points from the program? The success stories, challenges and the plans for the next edition?
Ahmed Hadhri: Since the first edition started with four countries, with the help of UNECA we target to involve 16 countries in the next year’s competition. We are planning on having the same program for each region as North, East, West and South Africa, and from each region we will take the best one and pool them in one competition for the final.
There were numerous learning and success stories from the first edition. For instance whilst building the capacity of the participants we realized that we had founders who at the beginning of the programme didn’t know some basic concepts of business like business models, making a brand, learning how to promote their product on social media, and how to craft a business plan. After getting the relevant know how, the participants were more confident to showcase their product and had real life business plans to drive their craft.
As part of the success stories for this year, we were able to turn eight ideas in to business prototypes which can easily be demonstrated or showcased to prospect investors.
Capital: What do you expect from these startups in the near future?
Ahmed Hadhri: We expect them to be up and running as a business. It is great for startups to be supported by incubator programs but this is not the only way to make a successful startup. Entrepreneurs should take the lead even before coming to an incubator or an accelerator program, and should not wait for these programs to propel their business. Startups ought to be aware that they need to launch their business after a few months when we help them find the capital and connect them with investors.
Capital: Are you an entrepreneur yourself? How did you join this project?
Ahmed Hadhri: Actually I started my journey, my professional experience as an entrepreneur. I studied business administration and just after finishing my study I launched a startup that was facilitating seamless book sharing. If you wanted to get a hand on a book(s) that you were interested in reading my startup had your needs covered and I used a website to search for the name of the book and the list of the people that had the book, so I can borrow from them.
Even from my student days, I fell in love with entrepreneurship and this is what I did after finishing my studies. I kept working and was up to date with the startup ecosystem in Tunisia. I participated in funding of two incubation spaces in Tunis. I also managed a national program which is one of the biggest student competitions all over the world.
Similarly, I have been working as a consultant for startups where we have gone from the initial idea stage to investment to then polished business ready for the market. For the last two years, I’ve been working as consultant with BetaCube.
Before this program, I was a program manager for another incubation program which had ten participating startups in the fintech sector which was powered in partnership with the European Union. I worked with them for one year from idea to the market stage. I joined this project after finishing the former project.
Capital: What is your view of the overall start up ecosystem in Africa, and women led startups too?
Ahmed Hadhri: When we evaluate the startups founded by women, the stats will show, it is at about 15 percent. This is very low for Africa, however the big positive from this is there is room for expansive growth.
A fun fact is that women are the most interested in business and entrepreneurship studies. But there is gap. They need more incubation programmes that allow them to make these ideas into reality and give them more confidence on their self. So this is something that we want to empower and encourage.
Regarding the challenge of the ecosystem, it is different depending on the countries. For example Tunisia is more advanced in terms of legal framework, because since 2018 there was a law of setup that was approved by the parliament and gives a lot of advantages for the startups and investors. This allows many startups to strive to have some money to succeed etc.
Now in Tanzania and in Senegal they are working to adapt a legal framework for the same. Similarly, Ethiopia is working towards that although there are some hurdles with regard to investment. For example you should have at least 200,000 dollars for foreign investors to invest which is a barrier to entry.
Moreover, mobile and internet penetration is also a challenge. There are some barriers too but the potential is big. The framework is there and when more international companies and competitors are present there will be a thriving market filled with more ideas and potential.
I think it will be a huge growth and Ethiopia is characterized by being the youngest population with an average age of 19 years, which is amazing. This means that the future of Ethiopia is better than the present.
Capital: What should countries do to increase startups?
Ahmed Hadhri: I think we should work more on legal frameworks to attract more investment. In some countries for example when you see the startup, most of investments are going to Nigeria, Kenya, South Africa and Egypt rather than other African countries. This is because the legal framework of the other countries is not encouraging. For example you pay a lot of tax in your country when you have foreign investors but cannot take out the money invested, so this doesn’t encourage investment.
We should thus work more on the legal framework and also capacity building skill which is also missing. African countries are suffering from many social and environmental problems. What is missing is how to turn these ideas or these problems into solutions in to startups. Countries are not focusing on it very well so there is a gap to fill in here. And if we work on these, more startups will pop up to provide solutions.