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.