JOHANNESBURG – As the old cliché goes, money makes the world go round, but for many an innovative start-up lack of it brings their entrepreneurial world to a grinding and severely frustrating halt.
Any fledgling business needs money of some amount to jump-start and fuel their growth. In capitalist markets there are two stakeholders: the suppliers of money and the users of money. I use the lurid word "money" in this article just to drive home the key point I want to make and that is there's no separating money (liquid cash) from business success.
Commercial banks are an important source of funds for any business and also for small businesses. Other sources of business funding include grants from private, NGO or public sectors, angel investors, venture capitalists and fund managers of private or public sector funds, among others.
The suppliers of money literally hold the future or failure of many small businesses in the palms of their hands. There's a popular saying in the Igbo tradition that "whoever has the money has the key".
Recently, three African start-ups secured huge investment deals in the same week. Yet something left me gobsmacked - not a single African money supplier played any part in these deals or led these deals.
Tizeti received an investment of $3million (R44.76m). The company was established to tackle poor internet connectivity, not only in Nigeria, but on the continent at large, by developing a cost-effective solution from inception to delivery, for reliable and uncapped internet access for potentially millions of Africans.
Using solar-powered base stations, Tizeti is able to reduce operating costs. This, coupled with the company's extensive coverage reach, has given Tizeti a competitive edge in the ISP sector.
4DX ventures, a New York-based venture capital company that focuses on Africa, led the $3m in investments.
Paga received an investment of $10m. The mobile payment platform was founded in Nigeria in 2009 by Tayo Oviosu and publicly launched in 2011. Today it has more than 9million customers and allows its users to transfer money and make payments through their mobile devices.
Paga acts as a mobile wallet where any user equipped with a mobile device can conduct transactional activities using their device. The Global Innovation Fund, which is both Washington- and London-based, led the investment deal.
Yoco received an investment of $16m. The fintech start-up was founded in 2015 and is a South African-based point-of-sale payments provider that builds tools and services to help small businesses get paid, run their business better and grow.
In just its first year, Yoco processed some R13m, not an insignificant amount for a fintech start-up in South Africa.
Partech, a global investment firm based in San Francisco, led the investment. Just these few examples are solid proof that African start-up innovation can proudly compete with the best on the planet. Yet many of us wish our Africa institutions and suppliers of money would recognise the power in our young "up-and-comers" and give them the monetary muscle they need.
Africa is abundant with fantastic initiatives, which global investors are quickly realising, but sadly many of the money suppliers in Africa are not.
I think for every aspirant start-up with proven sustainability, the words of Tom Cruise and Cuba Gooding jr in the 1996 hit movie Jerry Maguire ring true: “Show me the money!”
Kizito Okechukwu is the co-chairperson of Global Entrepreneurship Network (GEN) Africa; 22 on Sloane is Africa's largest start-up campus.
The views expressed here are not necessarily those of Independent Media.