Outlining the Successes and Trials of African Businesses
A report from TechCrunch found that African startup companies had a turbulent year amid the rapid spread of COVID-19, but the businesses still managed to make significant gains.
For starters, investment in African startup businesses slowed. A report from the venture capital firm Partech Africa found that African startup companies’ investments stood at $1.43 billion in 2020 (down from $2 billion the previous year.)
But the thing is, we knew it was going to be a challenging year for beginning startup businesses. The global economy was in rough shape when the pandemic rolled around, and the economy that would normally be supporting these companies is still not back to 100%.
Nevertheless, Partech Africa’s survey of startup companies found that although investment decreased in the previous year, the baseline support for innovative ideas on the continent is still strong.
“Yes, the numbers also showed the effect of a crisis that grounded global investors, drove uncertainty in macro trends, and froze frenetic African cities,” the firm wrote. “In some respects, there was a slowdown as Investors’ processes were disrupted, as founders delayed rounds for better times, as betting big tickets became harder. But a few months into the crisis, it’s become clear that not only is the ecosystem resilient, but it is even getting a boost.”
PricePally – One of Africa’s Many Startup Businesses
Take Nigeria-based startup business PricePally. The startup company allows users in a region to collaborate and purchase a bulk order of food for a lower price. More people in the country get more food, and they’re supporting the other businesses while doing so.
The startup company recently received a sizable investment from GreenTec Capital Partners — a critical step in the growth of the business and a signal that venture capitalists are eager to give regional companies the money they need.
PricePally Chief Executive Officer Luther Lawoyin told Startup Savant that being an African startup is both rewarding and difficult.
“Starting up in Africa is both exciting and tough because we are grappling with a lot of basic problems,” the business owner said. “There is an abundance of opportunity that could be incredibly rewarding at scale. Africa is the future, and technology now makes seemingly impossible solutions possible very fast, so possibilities are endless, that's exciting.”
The Future of African Businesses
This forward-looking confidence isn’t misguided. With an annual gross domestic product (GDP) growth of nearly 5% from 2000 to 2016, the future of business in Africa is bright, and there are many great opportunities for a startup business like PricePally.
Whichever way you slice it, an investment in African business is an investment in the future — and African startup companies are leading the charge.
About the Author
Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.