News coming out of Nigeria is that Interswitch, an African payments company based in the West African country launched a $10 million growth fund for African startups that are at any growth stage.
According to Techcabal, Interswitch believes that the fund can contribute to “innovation and disruptive business concepts” within the African payment industry and business space. Its Interswitch’s bet on African payments being the future.
All of this is coming after the payments company invested $2,6 million into the Nigerian logistics startup African Courier Express (ACE). This investment, which is being headlined by an initial $850,000 commitment, is the first commitment from the Interswitch ePayment Growth Fund.
ACE, which was launched in late 2013, managed to attract the funding because of a presence in 5 cities, deliveries to 100,000 customers to-date and a reputation as one of the more agile and visible e-commerce logistics companies in Nigeria that leans on a strong tech infrastructure.
What chances do local startups have with this fund?
Interswitch clearly outlined this $10 million pot for any African startup at any stage of growth that can come up with disruptive concepts within the payments industry in Africa. That pretty much sounds like a list of requirements that a Zimbabwean e-commerce or payments startup can meet. In other words, yes your startup can qualify, provided it can impress the investors.
It all comes down to how relevant your startup idea is and how dedicated you are to “..breaking barriers for e-commerce in the African market.” This is one characteristic of ACE that Mitchell Elegbe, Group Managing Director of Interswitch, attributed to ACE which represents the sort of business they want to invest in.
The age old questions that any startup faces in attracting funding and investment apply here actually. How big is the problem you are solving? How relevant is your solution to the market? Is it scalable? Is it a strong business case or just a flash-in-the-pan science project?
These issues are even more accentuated for Zimbabwean startups that may have figured out how to solve a problem for our very small market and need to look throughout the region to carve out numbers that justify six figure investments.
On that basis, it seems like Zimbabwean startups have a bigger case to prove against Nigerian or Kenyan startups that have large in-border potential markets. However, a pursuit of investments in solutions that break down barriers for African e-commerce pretty much says its open to all countries.
We have several fragmented African markets that can be integrated via e-commerce and payment solutions. The challenges faced across the African terrain when it comes to payments are fairly homogenous, so an innovative and disruptive solution can be replicated in multiple markets.
If you still have doubts, just look at M-Pesa and how it has been a huge inspiration outside Kenya.