Donors play an important role in assisting digital startup entrepreneurs, especially in developing countries. These donors could be individuals or institutions which provide access to funding, technical assistance, markets, and supportive policy environments.
Major global donor agencies like USAID (United States Agency for International Development), Foreign, Commonwealth & Development Office (FCDO), and the World Bank help startup technology companies build their businesses thereby creating jobs which contribute to economic growth and development.
They also recognize that entrepreneurs can help solve development issues like access to healthcare, education, and financial services.
Some of how these donors help startups are:
- Providing startups in developing countries access to startup funding. This can take the form of grants, loans, or other funding mechanisms to assist them in starting or expanding their businesses.
- Providing technical assistance to developing digital entrepreneurs.
- Mentoring, training, and other forms of assistance can be provided to help them build and develop their businesses.
- Facilitating access to global markets by connecting digital entrepreneurs in their home country with potential buyers and investors.
- Creating supportive policy environments, such as regulatory frameworks that enable innovation, intellectual property rights protection, and improved access to digital infrastructure and resources.
- Creating digital innovation ecosystems that foster digital entrepreneurship. This can include establishing incubators, accelerators, and other support systems to assist startups in developing and commercializing their ideas.
The focus of this write-up is USAID. USAID backs digital startups because it believes that technology and innovation can transform development in low- and middle-income countries (LMICs). USAID brings new ideas to scale, stimulates local economies, and improves the lives of people in developing countries by investing in digital startups.
Here are five USAID programs that help digital startups scale in LMICs:
Digital Invest
Digital Invest is a hybrid finance program that aims to raise private capital for digital connectivity infrastructure and digital financial services that strengthens open, inclusive, and secure digital ecosystems in emerging markets.
Digital Invest raises private capital for digital finance and internet service providers around the world, and it currently serves traditionally underserved consumer populations.
The program works with global investment fund managers, project developers, and other private sector partners to accelerate long-term market growth for internet service providers (ISPs) and financial technology companies (fintechs) that bridge the digital divide by serving traditionally underserved communities in developing countries.
There is currently a call for concepts which is open until April 14, 2023.
Development Innovation Ventures (DIV)
Development Innovation Ventures (DIV) is USAID’s open innovation program that invests in ground-breaking solutions to the world’s most difficult development challenges. DIV impacts millions of lives at a fraction of the usual cost by funding innovation.
DIV awards grants based on a tiered-evidence model that maximizes impact per dollar spent. Its model allows for early risk and later risk mitigation, ensuring that funding is directed toward the most impactful and cost-effective innovations.
DIV works with innovators and researchers all over the world to put new ideas to the test, take strategic risks, gather evidence of what works, and advance the best solutions.
DIV offers the following funding:
- Stage 1 Grants: Pilot (Up to $200,000)
- Stage 2 Grants: Test and Position for Scale (Up to $1,500,000)
- Stage 3 Grants: Transition to Scale (Up to $15,000,000)
- Evidence Generation Grants (Up to $1,500,000)
Find out more about DIV’s stages and how to apply.
Power Africa
Power Africa is a USAID-led initiative promoting affordable and reliable energy access in Sub-Saharan Africa, including off-grid solutions.
It was established in 2013 to bring together technical and legal experts, the private sector, and governments from around the world to collaborate to increase the number of people who have access to power.
Power Africa’s goal is to add at least 30,000 megawatts (MW) of cleaner, more reliable electricity generation capacity by 2030, as well as 60 million new home and business connections.
Its goal is to advance inclusive, low-carbon economic growth that improves lives and powers health, education, and prosperity.
All Children Reading
All Children Reading is a global innovation program that supports edtech research and innovation to enhance reading outcomes for underprivileged kids in low-resource environments.
The program has a collection of manuals, toolkits, and other resources that have been carefully chosen to assist in making decisions about the best ways to increase children’s literacy in environments with limited resources.
Early-grade reading materials and methods have already reached 841,941 children. So far, 1.7 million learning materials have been distributed, and reading materials have been created in 159 languages.
Prosper Africa
An initiative that encourages private sector participation, including digital entrepreneurs, to increase two-way trade and investment between the United States and Africa.
Prosper Africa brings together services from across the United States Government to assist companies and investors in doing business in the United States and Africa. The program provides options for exporting to African markets, investing in Africa, and searching for all opportunities and services on Prosper Africa’s website.
So far, 1100 deals have been closed between the United States and African nations with an estimated $65 billion of exports and investments made in 49 countries where the US government has supported the closing of deals.
