A wave of innovative transport start-ups is helping to keep Africa’s heartbeat sector growing. In the past year, the transportation sector achieved an impressive record of 21 start-up companies, the majority of which were aimed at unlocking new growth opportunities through software, internet-enabled solutions, and alternative e-mobility solutions.
With roads being the arteries through which the African economy pulses, the ongoing challenges have been key hindrances to sustainable economic growth and global competitiveness and trade. However, the spark of positive change being driven by recent start-ups in markets like Nigeria, South Africa, and Kenya has the potential to continue being driven by global trends/shifts but will require the continued support of innovators by both the private and public sectors.
Furthermore, this startup wave is one step closer to achieving the estimated jump of $16 billion in intra-regional trade that economists and trade experts expect to be possible through the African Continental Free Trade Agreement (ACFTA).
Though plagued with several challenges, including an infrastructure investment shortfall of US$67 billion and US$107 billion annually, according to the IFC, a look at recent start-ups and their funding avenues in Africa points to a growing attraction of the continent as the last growth frontier for investors.
In 2021 alone, the continent attracted about 564 start-ups (Figure 1), with fintech accounting for the majority share. For transport start-ups specifically, the records show a proactiveness by innovators to help solve Africa’s connectivity predicament, where supply chain challenges and limitations in physical infrastructure network limitations amount to about 40-60% surcharge costs on goods on the continent.
The record of companies included in Figure 1 also points to an industry gearing up for global trends that are likely to leave lasting changes in the industry. These trends as recognised by the Association of African Exhibition Organisers (AAXO) were likely noted to be around technology and automation and Environment Social Governance (ESG). In the African context, these have already been adopted and are surfacing through a rise in the e-logistics and e-mobility sectors.
2022 is expected to follow the growth trajectory seen in 2021, through several ongoing joint efforts to support innovators. Among these are incubation and accelerator platforms like the Baobab Network (which raised funding worth $200 million in just eight months); private sector participation like Toyota’s Mobility 54 venture unit and several more new financing options offered to solutions targeted at reaching the untapped markets in Africa, particularly in the key markets highlighted in Figure 2. South Africa saw an impressive 7 start-ups in 2021, with the ‘WhereisMyTransport’ company raising about US$14.5 million.
With Africa’s population expected to nearly double by 2050 (to 2.5 billion), achieving efficiency in the connectivity of goods and people will be critical, which begs the importance of supporting current business avenues that are proving to work well. The transport start-up industry is evidently one of them, particularly in Nigeria, South Africa and Kenya, and the North African countries.
Moreover, with the ongoing challenges around fuel hikes, and disruptions caused by the Russia-Ukraine conflict, African nations have a keen opportunity to strengthen their networks through forward-thinking solutions, but also to leverage the potential of the AfCFTA through collaboration.
Nigerian Autotech Startup, Fixit45, Secures $1.9 Million for East Africa Expansion
Nigerian autotech startup Fixit45 has successfully secured $1.9 million in equity and working capital to fuel its ambitious expansion plans into East Africa.
The funding round, spearheaded by Launch Africa Ventures, witnessed significant participation from notable investors, including Soumobroto Ganguly and Dave Delucia, alongside a diverse group of angel investors.
In a press release issued on Wednesday, Fixit45 underscored the significance of this capital infusion as a substantial stride towards broadening its footprint and influence within Africa’s thriving automotive aftermarket industry.
The company revealed that these funds have been earmarked to fuel its strategic expansion initiatives, with a particular emphasis on fortifying its automotive repair business.
Fixit45 also shared its unwavering commitment to enhancing its spare parts distribution capabilities through its online-to-offline platform, xparts.africa. With a keen eye on the East African market, Fixit45 has set its sights on Kenya and Uganda.
Co-founded by visionaries Chioma Ahueze-Okochukwu, Goodluck Ikporo, and Pankaj Bohhra, Fixit45 offers a unique platform that empowers car owners to seamlessly connect and engage with a vast network of aftermarket stakeholders.
This extensive network encompasses automobile service providers, specialized technical teams, spare parts suppliers, and end-consumers.
Pankaj Bohhra, one of the co-founders of Fixit45, expressed his enthusiasm, stating, “This funding represents a pivotal moment for Fixit45. We are profoundly grateful to our investors for their faith in our vision and our unwavering commitment to revolutionizing the African automotive aftermarket sector. With this capital infusion, we are well-positioned to advance towards our expansion objectives.”
Fixit45’s strategic move into East Africa holds the promise of ushering in transformative developments in the automotive industry across the region.
As the company intensifies its efforts, the future of automotive repair and spare parts distribution in East Africa appears poised for a remarkable evolution. Stay tuned for more exciting updates as Fixit45 continues to make waves in the autotech sector.
Payday’s $3 Million Seed Round: From Hope to Headaches
Six months after securing $3 million in a seed round led by Moniepoint, Nigerian fintech startup Payday finds itself embroiled in controversy and uncertain about its future.
Founder and CEO, Favour Ori, confirmed that the company is actively engaged in discussions with potential buyers.
In March, reports surfaced that Moniepoint was in talks to acquire Payday, with an expected deal closure within three months. However, the deal fell through, reportedly due to Moniepoint’s board’s lack of enthusiasm. Despite this setback, negotiations to sell the company continue.
Payday faced a wave of negative publicity in August after suspending access to customer accounts following fraudulent activities that resulted in customer losses. The company was accused of misappropriating customer funds before acknowledging the account restrictions.
Internal issues further marred the company’s reputation, especially after Payday implemented contentious salary reductions for some Nigerian staff in July and failed to issue promised stock options to affected employees.
This led to dissatisfaction and several employee departures.
Payday’s COO, Ogechi Obike, also departed, citing goal misalignment and clashes with Favour Ori.
Accusations arose that Favour marginalized Obike in crucial meetings and decision-making processes.
Favour Ori’s management style came under scrutiny, with allegations of impulsiveness and a lack of transparency.
Employees claimed that he hired top talent but stifled their input, resulting in customer disruptions, including difficulties creating virtual cards and accessing accounts.
Amid these controversies, Favour Ori has reduced his involvement in the company, focusing on external work with GitHub while the co-founder, Elijah Kingson, is employed at Revolut.
Payday’s future remains uncertain, with the potential sale of the company and the need to regain customer trust and employee satisfaction hanging in the balance.
The company faces the challenge of restoring its reputation and stability while navigating a tumultuous period in its young history.
Nigerian-American Nurse Turned Millionaire Entrepreneur: The Inspiring Journey of Courtney Adeleye
In the world of entrepreneurship, there are tales of rags to riches, and then there’s the remarkable journey of Courtney Adeleye, a Nigerian-American nurse who transformed herself into a millionaire entrepreneur. Her story is one of determination, innovation, and a relentless belief in herself.
From Nursing Scrubs to Business Suits
Rewind to 2013, and you’d find Courtney Adeleye in the role of a dedicated registered nurse, tirelessly caring for patients. But she had a different passion simmering beneath the surface. Courtney was on a quest to find the perfect product for treating natural hair, and her search proved to be a turning point in her life.
“I realized there were not many brands that used natural ingredients and specialized in healthy hair growth at the same time,” Adeleye recalls. Undeterred by the lack of suitable options in the market, she took matters into her own hands. Armed with a vision and just $500 to her name, she began mixing her own hair care products at home, infusing them with vitamins, nutrients, and healthy ingredients.
From YouTube to Entrepreneurship
Courtney’s journey took an unexpected turn when she decided to document her homemade hair care routine on YouTube. What started as a personal project soon attracted a devoted following of individuals eager to discover her secret for beautiful, natural hair. Not only did they seek knowledge, but they also wanted to purchase her products directly.
This grassroots movement led to the birth of “The Mane Choice,” Courtney Adeleye’s hair care solution for healthy locks. Her formulas were distinct, boasting ingredients that were free from mineral oil, petrolatum, parabens, sulfates, and formaldehyde, setting her brand apart in a crowded market.
The Mane Choice quickly gained momentum, and within the first three years of business, Adeleye sold a staggering $10 million worth of products from her own home. But she was far from finished. In just two more years, she had partnered with over 60,000 retailers across the United States, achieving the remarkable milestone of $100 million in sales and even launching an IPO in 2019.
However, Courtney Adeleye’s entrepreneurial spirit knew no bounds. In a testament to her commitment to health and wellness, she launched Olbali, a health-focused direct-selling company. Under this umbrella, she housed her private brands, including The Mane Choice, Cool Coffee Clique, Foolproof Body, and more, expanding her entrepreneurial empire even further.
Breaking Stereotypes and Inspiring Diversity
Courtney Adeleye’s journey hasn’t been without its challenges. Like many Black entrepreneurs, she faced the limiting perception that her products were exclusively for Black women, despite her extensive and diverse marketing efforts. This stereotype is a pervasive issue, as highlighted by research from McKinsey & Company.
Adeleye’s response to this challenge is simple yet profound: “My goal has always been to be diverse and inclusive.” She strives to be intentional about displaying diversity across her brands, aiming to realize her business’s full growth potential on a mass scale.
10 Secrets to Success
Courtney Adeleye has distilled her entrepreneurial wisdom into 10 key guidelines for those ready to take their businesses to new heights:
- Be authentic.
- Don’t meet your customer expectations…exceed them.
- If you don’t think you have a great product, try again before releasing it.
- Informal content can be more powerful than formal content.
- Be a walking billboard for your brand.
- Engage with your customers on all platforms.
- Show up consistently on social media.
- Bring your brand to life through grassroots events and activations.
- Invest more in your customers and micro-influencers versus macro-influencers.
- Fix the brand before you start spending money on marketing. Great branding can exceed great marketing.
Belief in Oneself
Throughout her remarkable journey, Courtney Adeleye holds one piece of advice above all others: “You have to believe in yourself before anyone else will.” Her unwavering self-belief has been the driving force behind her accomplishments, proving that with determination, innovation, and an unshakeable belief in one’s abilities, even the loftiest dreams can become reality.
As we celebrate the accomplishments of entrepreneurs during National Black Business Month, Courtney Adeleye’s story serves as an inspiring reminder that success knows no boundaries when passion, hard work, and self-belief lead the way.
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