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Funding options for startups in Africa are quite limited – Co-founder, Kinyungu Ventures

Tony Chen, Co-founder of Kinyungu Ventures chats about startups and venture capital in Africa.



Kinyungu Ventures, an east African advisory firm that invests in early-stage startups in Africa published a white paper that revealed the continuous wide misalignment between traditional venture capital models and the African market.

These mismatches influence how startups and funds maneuver as well as what results they expect and produce. The paper tackled the assumptions that drive venture capital (VC) investing norms and how well they apply in Africa.

Africa has a large market but it is also fragmented. These fragments consist of consumers with limited purchasing power who are likely to be a utility- and price-sensitive. These consumers are difficult and expensive to acquire and retain because they don’t tolerate fully digital modes of distribution.

Silicon Valley VC requires outsized returns that African markets can’t necessarily provide at the same scale due to the market dynamics. Startups are beginning to adjust their operating models to better align with market realities.

Nairametrics had a brief chat with Tony Chen, Co-founder of Kinyungu Ventures on how this misalignment is affecting startups in Africa. Speaking on the misalignments between the traditional venture model and the African markets, Chen responded by saying that since markets are potentially large and still very fragmented, solutions can differ given different locations.

“Traditional venture capital is taken from the Silicon Valley environment which has crucial assumptions that may be true in America, but are largely false in Africa (and really, in most markets around the globe). For example, the model assumes huge, global markets, easy/inexpensive routes to acquire and retain customers, and deep funding options at every stage of business.

“In Africa, markets are potentially large, but still very fragmented. A solution that works in Kenya doesn’t necessarily work in Uganda, or vice versa. Customers are hard to acquire and harder to retain, as many foundational, infrastructural elements (e.g. affordable data, efficient logistics) make reaching customers problematic and expensive. And oftentimes, funding options, even as startups grow, are quite limited.

Chen who has had over 10 years of investing in several start-ups in Africa also notes that investors must invest in companies quickly, spur them to grow and understand when to quickly sell.


“In addition, most funds are set up with a limited time window – you must invest in companies quickly, push them to grow as quickly as possible, and then sell quickly. This overemphasis on growth (and an underemphasis on profitability) often limit the start-up’s ability to withstand the many external shocks inherent in the environment, such as post-election chaos, new regulation, corruption, and increasingly unpredictable weather.

“This insistence on shorter time horizons is at odds with research that shows that much of the value creation in frontier markets happens over a longer period of time – perhaps more so in the second decade,” he said.

As people get new ideas every time, new startups are springing up every month. These startups will be on the lookout for funding. Since Kinyungu Ventures is also interested in investing in businesses, Chen outlined what he considers before investing in a startup

Chen said, “Different investors use different criteria to determine what start-ups are most investible. For early-stage ventures in particular, we believe the most important element is the character and personality of the founding team.

“Will they have the resilience to get through difficult times? Will they have the curiosity to keep learning from every success and every failure? Will they have enough shared common values and good communication skills to weather the inevitable disagreements that will arise?

“Business models are also important. Strategy, unit economics, and financials are important. However, many early-stage start-ups are currently still a pivot or two away from the ‘actual’ business they will build. The right team will have the characteristics to find a unique solution to solve big problems on the continent.”

After raising capital, staying successful will become a new problem for a startup as more competition arises. Chen insists there are numerous factors that impact the success of an African startup, but two are most important for him.

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Entrepreneurial energy and creativity are paramount. The market landscape is constantly changing. Unexpected shocks will occur. The best entrepreneurs will thrive in this environment, relishing the opportunity to keep solving problems and to keep innovating.

Team is also paramount. I’m not just talking about the org chart. The team also includes anyone and everyone who wants the venture to succeed – board members, family members, friends, and other stakeholders. The best entrepreneurs are able to draw people towards their vision, even if they’re not on the payroll. These people are often able to open doors, offer timely advice, and gently point out the entrepreneur’s blind spots.

Speaking on what startup sectors VCs should be paying more attention to Chen noted that the fintech sector has been gaining a lot of attention in recent times.

“There are certainly ‘hot sectors’ in Africa. For example, fintech has received a lot of attention and seems to be most likely to draw a broader set of investors. However, VCs will continue to pay attention to their area of focus where they can add the most value outside of the capital,” Chen said.

In concluding, Chen advised governments to support the digital ecosystem “by spurring entrepreneurship through policies that reduce the cost of capital, streamlines bureaucratic processes, and encourages foreign investment.”

“Tunisia’s start-up act largely seems like a decent model to follow,” Chen adds.

Janet John is a graduate of Chemical Engineering from the University of Uyo. She specializes in technical writing where she creates easy to read documentation, articles to clearly and efficiently explain highly complex processes. When she is not writing, she works as a freelance front-end developer

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Business Half Hour

How I rode on passion to win multiple-awards in a self-taught career – Shola Animashaun

Turning down an employment offer at 25, to take a gamble his passion seems to have paid off for Animashaun.



How I rode on passion to win multiple-awards in a self-taught career - Shola Animashaun

There tends to always be a bias towards motivational speakers, who give the “follow your passion, and money will follow” advice and they are mostly chided for giving advice that is not applicable to all climes.

But then comes Shola Animashaun, multi-award-winning visual storyteller, who proves that even in Nigeria, it is possible to follow your dream and make a lot of money out of it.

While serving out his youth corps year in 2002, Shola discovered his love for visual storytelling – an art that keeps memories and tells stories using still and motion pictures. He had gotten a camera while working in Ilorin, Kwara state before going for the service year, but then discovered that there were people willing to engage him to capture their memories in pictures and videos, and pay for it as well.

After the year in Ilorin, he abandoned the hobby which he regarded as a pastime and started the job-hunt, hoping to clinch some white-collar job with mouth-watering remunerations, but over the next three years, it became an endless search until he eventually got a job with an accounting firm based in Abuja.

Recounting his experience in the Nairametrics Business Half Hour show, Animashaun said; “I was offered employment and I was supposed to travel to Abuja to start work there. By the time I got home, I packed my bags to leave Lagos for Abuja. But one of my siblings held me back. He said if I don’t end up pursuing the passion I had in visual storytelling as a business, I may never end up doing it.

I listened to him, the next day I went to return the N5000 I had been given to take night bus to Abuja to start work as an accountant. At the time I turned down that job, I was 25 or 26 years old, and once you can’t get into a white collar establishment in your early 20s, it would be hard for you to do that. so when I was turning down the job, I knew that I had burnt my bridge literally. I knew that the decision would be difficult to take back, so I had no option but to be successful. ”

Turning down an employment offer at 25, to take a gamble on one’s passion is not what many would advise their siblings to do, but it did pay off.

Over the next few months, Shola focused on building a portfolio of editorials, documentaries, videography and related productions, and within three months, Animashaun’s income had quadrupled the offer he got from the accounting firm.


With referrals, he soon got his first big offer – the Globacom campus storm – which took him travelling around the country with the likes of Basketmouth, Jimmy Jatt, and Ruggedman.

“It is very important to have a portfolio because even when people refer you for the right jobs, they would always want to see what you have done before then. A little talking and more showing, and the results that you seek will come,” he said.

Animashaun also focused on building a good interpersonal relationship with his clients, to build more rapport and attract more referrals to sustain the business. He also got a deal as the in-house photographer for Nigeria’s number one urban lifestyle and music magazine, Hip Hop World; and has since then worked with several concerts, magazine covers, blogs among others.

At different times, Shola covered the Eyo Festival, Lagos Carnival, Nigerian Tourism Expo in Atlanta Georgia and Barbados respectively.

Any regrets?

None at all, Shola says.

“There was never a time I regretted my decision. I love the freedom of time, the freedom to take up a job I want. I am always excited but when I was looking for a job for years, that excitement died totally and I started feeling like I was not good enough. Returning to the camera brought back the excitement and that is what I need to fuel my energy.”


The accounting graduate, now turned visual storyteller, has churned out hundreds of productions over the years and gotten several awards and recognitions. Despite starting out as a neophyte and learning through multiple trials and errors, Shola has now become one of the most notable names in the industry. He has executed several jobs within and outside the country and continues to stun the world with better and better productions every single time.

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He was recognised Best Model Photo of the year, Nigeria Photography Awards 2011, and again in 2012. Shola also won the Best Wedding Photo of the year, and the Best Event Photo of the year, Nigeria Photography Awards 2012.

Shola Animashaun was 2nd runner-up, EyeEm We Are One FIFA14 World Cup Int’l Competition 2014; and the Visual Art Winner, Creative Industry Awards 2015.

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SeerBit is providing innovative technology solutions to bridge payment gaps in Africa – CEO

One of SeerBit’s strengths is our ability to scale and innovate within our current markets amidst distinctive government regulations.



SeerBit is providing innovative technology solutions to bridge payment gaps in Africa - CEO

As more people adopt the online method of running their businesses, processing payments has become a challenge. As an e-commerce or online business owner, if you’ve successfully gotten a customer to the point where they are about to purchase a product on your website, integrating a safe and secure payment process where the customer can complete their online purchase is very vital. Without it, you won’t be able to securely charge your customers when they purchase items from your website. 

Benefits of having a payment gateway 

Integrating a Payment Application Programming Interface (API) is the safest and most professional way to deal with financial transactions online because it enables eCommerce sites to: 

  • Process credit cards
  • Track orders 
  • Maintain customer lists 
  • Protect merchants from fraud and information breaches. 

Many startups in Nigeria have come up with innovative ways to solve the problem of payments during checkouts. One such company is Seerbit. In an interview with Omoniyi Kolade, CEO of Seerbit, he explained how they are bridging the payment gaps in Africa. 

What was the inspiration for founding SeerBit? 

Over the last decade, Nigeria’s payments services witnessed an evolution spurred by growing commercial activities and the digital boom (increased internet usage and smartphone penetration). According to a 2021 report published by Data Reportal, about 50% of Nigeria’s population are using the internet and approximately 90% have access to mobile phones. This is an indication that half of Nigeria’s population have been digitally included, which is the backbone of online and real-time electronic payments systems. Other African countries are seeing the same shift too.  

However, there is a huge gap in the market which doesn’t gain as much attention as it should. If 50% of Nigeria’s population have digital access, how are the majority of transactions in Nigeria and the rest of Africa still happening offline? 

This is the gap SeerBit was created to solve. To create a truly digital ecosystem, we chose to create payment solutions that bridge the gap between online and offline usage, with innovations that defy boundaries. For example, the majority of Nigerians still transact in cash; how can we make sure that digital products are still available to this class of people, with convenient payment options?  

This problem not only affects the cash-based customer but also the online merchants who could lose out on the billions of dollars happening in the offline market. SeerBit exists to plug these gaps, as our payments solutions are always geared towards creating opportunities for everyone to thrive.  

In a nutshell, what does Seerbit do? 

SeerBit is a pan-African enterprise payment platform developed for both online and offline businesses, banks and other marketplace companies. We enable fast, seamless, inclusive and secure payments for leading local and global companies present on the continent. 


Apart from acting as a payment gateway, are there other services you offer? 

SeerBit is more than just a payment gateway. We are in the business of using technology to address the fragmentations and frictions of payment on the continent. Our current service delivery is our payment gateway and we will soon release our payment solution targeted at offline merchants and customers. 

What makes you different from Paystack and other leading payment gateways in Nigeria? 

What sets us apart is our focus on the underserved and excluded segments of the market in Nigeria. We want to seamlessly connect the online and offline market in a way that removes friction for both consumers and merchants. As a consumer, SeerBit helps you to buy what you want and pay however you want, conveniently, and the merchant is empowered to reach a broader market because we have removed the barriers along the way. 

You are operational in Nigeria, has government regulations affected SeerBit in any way, and how did you adjust to this? 

One thing to note is that for every African country, there are unique sets of rules and regulations governing the sector of payments. There are 54 African countries, which means that there are 54 different rules for payments in Africa.  

One of SeerBit’s strengths is our ability to scale and innovate within our current markets amidst these distinctive government regulations. We tailor/model our solution to work within the country’s license requirements whilst still solving real problems. Regulation is everything in this business and we make it our utmost priority to understand the local payment rules and regulations.  

SeerBit has been in operation for over a year, how many merchants do you currently have? 

Within 18 months of operation, SeerBit has over 1,000 merchants spread across 8 African countries (Nigeria, Ghana, Kenya, Senegal, Côte D’Ivoire, Uganda, Tanzania and Burkina Faso). SeerBit’s decision to focus first on East and West Africa is because we understand the fragmentation in these regions. 

How successful has SeerBit been in other countries where it has a presence? 

Success to SeerBit is measured by the following: 

  1. Being able to scale/expand into new markets (in terms of merchants and office staff).
  2. Being able to understand the locality and customer type in each country to provide tailored solutions.
  3. Being able to innovate locally amidst the unique regulations in each country.
  4. Seeing the results of the SeerBit solution and how it impacts sales for merchants.

Looking at the aforementioned, SeerBit has enjoyed a good amount of success in the markets we operate in and are keen to add value to more merchants in our existing markets and also new markets as well.  

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Are there any future fundraising plans? 

At this time, SeerBit’s focus is to continue to build out our solution and grow organically. Our priority is to create the utmost value in payments for Africa’s online and offline commercial space.  

We are, however, open to the idea of fundraising and look forward to this happening somewhere in the near future. 

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