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Africa’s next unicorn: coming soon to a country near you?

For the continent’s startup culture to thrive, venture capital needs to be unlocked.

One of the biggest impediments for startups is easy access to funding. Picture: Primedia

Growing startups in Africa isn’t easy. One of the biggest impediments is easy access to funding. Last year, American startups received 62 times more venture capital than their counterparts on the continent - a startling statistic considering the need for opportunity and growth required in Africa.

South African-based incubator Founders Factory Africa is trying to help develop solutions for African consumers, by African startups. It has already invested in five startups in Ghana, Kenya, Uganda and Nigeria, and it aims to build and scale 135 more over the next five years to transform the continent’s startup economy.

But for startups to scale effectively, they need appropriate tech-enabled solutions. With proper funding and the right technology, businesses can offer customers better products delivered more quickly, which are simpler to use and come at a better price.

The trend that we definitely seeing is that customers want ease of use. So whatever payment tender type they have in their hands, they must be able to use it [everywhere].

Ecentric Payment Systems’s Hassen Sheik

Founder of business loan provider Merchant Capital, Dov Girnun, believes if SMEs are better funded, economic activity can be increased in South Africa. “And that should, indirectly or directly, solve systemic issues [related to] unemployment, job creation, crime and education.”

By working with corporates and investors, FFA wants to change the perception of entrepreneurship in Africa so that hopefully, in the next few years, we can see Africa’s next unicorn emerge.

Click here to read more from the Driving Africa’s Development archive.

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Listen to EWN's WEF Africa correspondent Arabile Gumede in conversation with Founders Factory Africa's Alina Truhina, Ecentric's Hassen Sheik and Merchant Capital's Dov Girnun.