Africa and its unique markets are ripe with investment opportunities for those willing to take risks and consciously collaborate with entrepreneurial talent at a grassroots level.
This message was delivered by Bongani Sithole, Managing Director of Founders Factory Africa (FFA), to over 300 people at the Startup and Scale Summit at Leaderex in Johannesburg, on Wednesday, 14 September.
“We [FFA] invest early at a time when most people would rather not look because it’s risky…There are not a lot of players who take a risk at the early stage. Our thesis, the why we exist, is that Africa is a huge geography with ‘investable’ businesses…How can we create ‘investable’ businesses in Africa?” Bongani said.
This question has been at the heart of FFA’s work since it was founded in 2018, with the company intently focused on identifying and working with entrepreneurial tech talent at the pre-seed and seed levels. According to Sithole, this talent is often ignored because investors are unwilling to look or put in the work to make their ideas a reality.
FFA is intent on working with early-stage startups that can positively impact their communities through solving pertinent, local pain points.
“As an African, I am passionate about building scalable startups whilst delivering on social impact. That’s how we started at Founders Factory Africa. Our portfolio is beginning to prove our work,” Bongani said.
“We believe that Founders in Africa need hands-on support. The reason for that is at a very early stage in building a business, the talent you need to build further, faster is expensive. To bridge that gap, Founders Factory Africa puts in capital and employs 5 to 7 people from our team to essentially build these ventures.”
The people deployed to work with Founders within FFA’s Build and Scale Programs have decades of accumulated experience in building startups in Africa’s national and regional markets. When ventures graduate from FFA’s Venture Programs, they have typically gone from “zero-to-product with paying customers” or improved their product and market traction to enhance their chances of long-term success.
COMMERCIAL SUCCESS IS ONLY THE BEGINNING OF REAL IMPACT
Beyond the impact FFA has in helping Founders solve local problems, Sithole is consistently excited by the ripple effect startups can have on their communities. Relating his own experience as a Founder, Bongani recounted that 2 to 3 years into founding his first business, he was employing around 20 people.
Having built his first business from the ground up, the realisation that he was responsible for the livelihoods of up to 20 people, and those his employees supported, weighed heavily upon Bongani’s shoulders. This feeling of responsibility and the catalytic effect startups can have on the lives of those closest to them keeps Bongani focused on FFA’s core mission and vision of building investible African startups so that they can go further, faster.
While FFA is headquartered in Johannesburg, it currently employs teams in Lagos, Nairobi, Accra, and Cape Town, with further expansion on the horizon. Bongani noted that FFA’s model of deliberately working with locally-based Founders meant that as an accelerator, venture builder, and investor, FFA is always close to its core constituency: in situ African Founders.
“We literally work with these Founders on the ground, hands-on, with our team. The way we are spread allows us to collect information across major geographies in Africa to build businesses in a way that allows them to scale,” Bongani said.
“[Our] various teams…Product, Growth, Engineering, Partnerships etc…are coordinated according to the needs of the business. We co-create with a Founder to understand what it will take to get to the next milestone.”