A new project was just launched in Ghana : SliceBiz, an innovative investment platform that will revolutionize financing for African start-ups! A few weeks ago, we were lucky to meet and interview William Senyo, CEO of this great social enterprise…
Will first started by explaining the “4 facts you need to know” to understand the story behind SliceBiz :
- Africa has a growing middle class, with very good disposable income;
- There are still many problems with the internet on the continent but mobile is well developed;
- More and more young, innovative Africans are doing amazing things;
- But most of these things are made in backyards, staying small and stagnant, even if they have great potential.
According to him, what is really missing in Africa is simple: funding. And this is where SliceBiz, who won the Accr Startup Weekend, wants to take action: by finding a way to apprehend those 4 previous things altogether in order to answer this lack of funding.
That’s for the – solid – theory.
Concretely? They will link the great mobile infrastructure and smart ideas, and create a strong framework of start-ups, making it appealing for the growing middle-class of Africa to invest small amounts of money to fund these businesses. Or to say it differently, they are adapting crowdfunding to the specificities of the African continent.
But it goes further than that: SliceBiz is actually a smart mix of crowdfunding and venture capital.
Because Africa is not culturally ready yet to give even small amounts of money online, it was not possible for William and his team to create a crowdfunding platform “the European way” (see KissKissBankBank, Ulule,…). “Here, he says, you have to know the person to give them a dollar”.
“That’s the only way we can nurture African growth. African projects funded by African people.”
So they came up with an innovative business model: the start-up entering the platform will give up part of its equity to investors, who will get share capital in return for their investment. By becoming part of the capital, these middle-class investors will be encouraged to truly take part into the growth and success of the company. They will become mentors and be able to donate time and competences in order to provide good advice on key specific subjects (marketing, law…). And after 2 years, they will be allowed to take out. It actually works like any venture capitals, the only difference being that existing venture capitals in Africa do not fund start-ups or small businesses. Targeting the investment force of the growing middle-class and attracting them with a model where they can both invest money and be part of the project, is a solution to this lack of interest or trust from classical financing organisations into start-ups.
SliceBiz will also be charging matching fees for every investment, and 10% of the start-up’s equity will go to the platform in order to finance the network. Indeed, an entire ecosystem will be created around these start-ups, providing them with offline activities, knowledge and connexions, equipments, legal advice… all of this being funded by the matching fees, ensuring that star-ups will not have to pay for these services in exchange for giving up part of their equity.
The platform will start with 10 start-ups, who will all have a strong technological component. SliceBiz decided not to focus on one particular area to begin with, but they might chose to specialize into one sector or another later.
Let’s see how it evolves… chances are, we will soon see many new start-ups booming in Ghana !