Looking at the fundraise from African startups, you may struggle to see a clear trajectory. It goes up and down, though towards the end of 2020 and early 2021, a muted trajectory emerged. . Yet, while everyone likes to write on fundraise, the most catalytic thing is not funding, but unleashing human capital in ecosystems. Andela might not have raised tons of money recently, but Andela’s impact is HUGE.
How? When it released those young people, they moved into markets and started doing amazing things in companies. And the big one: Y Combinator is not extremely outperforming when you look at the data. Sure, it has got Paystack and Flutterwave, but there are other hot startups in Africa which are doing amazingly great which did not pass through it. Its batting average looks like others. So, do not make it look like YC is the only path.
Meanwhile, I am still waiting for a paper from an Economics professor in Africa who can pick the data, and quantitatively explain how these startups have improved human welfare and broad standard of living. (PhD Econs students, a good thesis topic.) That is the real deal, besides piping dollars from America into Africa.
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Measuring impact has always been a challenge here, just like spending money on things we can’t really know if any value is captured.
While announcements on fundraising always sound great, we also need to know where the money is going and number of lives touched; so that it won’t be just a case of raising money to make those who are already comfortable richer.
We will see how Mhagic (www.mhagic.com) performs in those twin goals of human capital development and improved wellbeing; of course massive community support is key to realisation of such lofty objectives.