For a few years now, African startups have been funding themselves with very large investor fundraising. These funds allow them to accelerate their development on the continent and internationally. Alex Perrier, an investor and entrepreneur, explains how these other means of financing work for start-ups and SMEs.
African start-ups, particularly in Côte d’Ivoire, have managed to raise very large sums to boost their growth. The financial technology sector attracts most investors. How it works ? Explanations of Alex Perrier, French-Australian investor and entrepreneur in this interview?
Who is Axel Perrier?
Hi, I’m Franco Australian, now based in Dubai, and I wear two hats: a businessman and an investor. On the entrepreneurial side, we operate and operate automotive classifieds websites in all French-speaking African countries, called the Afrikar Group. We want to add trust and transparency to the transactions of used cars in these markets and to solve the difficulties faced by buyers and sellers of this type of vehicle. On the investor side, I invest mainly in emerging market startups, particularly in Asia and especially in Africa, with over 30 companies in my portfolio, such as Appetito in Egypt, ImaliPay in Kenya, Treepz in Nigeria, Julaya in Côte d Ivory, TopUp Mama, Termii and others.
Explain to us the mechanism of fundraising?
It is simple, entrepreneurs, to evolve, they need funds to accelerate their growth, and this is where the mechanism comes in.
Why do you think SMEs and startups use this type of financing?
In order to go faster, to gain time, to accelerate its growth. To do, thanks to the capital raised, what they can do in a few years, but only in a few months.
What criteria must be met for a small and medium enterprise or start-up to raise funds successfully?
It is a meeting between an entrepreneur, a company, its business model, and an investor, whether it is a business owner or a fund. It is therefore essential that the two coexist with each other, as in any relationship.
Who are the main investors, particularly in Côte d’Ivoire?
The ecosystem is becoming more mature, becoming more professional, with increasingly serious players. Pour les investisseurs, j’ai travaillé sur le classement en Côte d’Ivoire, le plus gros investisseurs en tant que fonds est Investisseurs & Partenaires, qui a investi dans plus de 5 startups sur Abidjan, comme Keiwafrik, Anka ou Lega autres, mais aussi Launch Africa, un fonds anglophone qui est présent sur le continent, avec des investissements ici dans Julaya et Djamo par exemple, et aussi Saviu Ventures, BPI France ouity54, le fonds du groupe Toyota Mobilité quis investit principal In Africa. Then there are about two dozen other international funds that have already invested in Côte d’Ivoire.
What are their motives?
Like all funds, look for companies that, over time, will generate capital gains from their equity investments.
What sectors have succeeded in raising the most money? why do you think?
Today in Africa, fintech companies are fundamentally revolutionizing the means of payment and finance, and this is where there is a huge gap to be filled across the region, because that is what is needed. and evolve.
What are the advantages and disadvantages of a startup or SME to using this type of financing?
If it is done well, there are only advantages. This allows them to grow faster, and to gain an advantage over their competitors. Now, the entrepreneur will have to exchange a part of his capital, the shares of his company, for this financing, that is the principle.
What is the total amount raised by SMEs and start-ups in French-speaking Africa and especially in Côte d’Ivoire?
In Côte d’Ivoire, for more than 6 years, we have raised about $30 million, and throughout the French-speaking African region, several hundreds, in particular due to large start-ups like Wave Mobile Money that raised for example more than $200 million in 2021 .
What do you think of the startup ecosystem in Côte d’Ivoire?
It’s getting more and more dynamic, and there are some nice gold nuggets that can’t be seen often. The ecosystem is becoming more mature and if local startups think from a sub-regional perspective more than just a single market, the potential is greater. It is not easy for start-ups from English-speaking countries to establish themselves in French-speaking countries, so it is a good competitive advantage.
In addition to financing, what actions should be taken to boost SMEs and start-ups in the region?
In the long run, there must also be support from public authorities, and this support must come over time and not bit by bit. I was at SASEN recently in Abidjan, politicians are becoming aware of this and are becoming more and more involved in the ecosystem, which is a good thing. Another action to take is about visibility and communication. To be seen, you have to be heard, and the media is asking for stories in these markets.
Do you think it is possible to bridge the gap between French-speaking Africa and the rest of the continent?
Demographic mechanisms will not change, and Nigeria will always be larger in this view than the countries of French-speaking Africa. The important thing is not to make up the gap, but to see the emergence of major players in French-speaking Africa, who will eventually join the English-speaking players wanting to establish themselves in the region.