Crowdfunding viable seed funding option for startups – 1%Club

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Crowdfunding is partially viable as a tool for startups in Africa to raise seed funding, research by crowdfunding platform 1%Club finds.

1%Club launched a trial across 21 African countries, asking 100 social impact startups in need of seed funding to try to raise the investment through crowdfunding campaigns on the 1%Club platform.

Each startup was challenged to raise 30 per cent of the required funds within 30 days.  By way of incentive, the Holland-based Cheetah Fund promised to match the funds raised by successful participants.

75 of the startups were successful in meeting the challenge, crowdfunding EUR175,000 (US$196,000) in total.

According to Bart Lacroix, director of 1%Club, the research suggests the future of impact funding will move towards local crowdfunding -backed by impact funds – as opposed to top-down investment.

“The new generation of African pioneers will no longer wait until the money floats to them. This generation has innovative ideas and are enthusiastic and driven to kick-start their projects themselves. They want to show that they themselves can build their own country,” Lacroix said.

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Inspired and excited by the African tech entrepreneurial scene, Gabriella spends her time travelling around the continent to report on the most innovative tech startups, the most active investors, and the latest trends emerging in the ecosystem.

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