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    African startups face funding issues

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    KUBIK, an innovative startup based in Ethiopia, takes pride in its groundbreaking technology that converts plastic waste into construction blocks, contributing to a more eco-friendly approach to building. However, the journey to success has not been an easy one for the award-winning company. Its CEO, Kidus Asfaw, revealed that securing funds has been an uphill battle.

    At Kubik, the process begins with sorting discarded plastic into different piles. The selected plastics are then mixed, melted, and combined with additives before being molded into the desired shape. The outcome is a range of black beams and interlocking blocks, which are currently being used in a pilot project to construct a daycare center in Addis Ababa, the capital city.

    What sets Kubik’s construction process apart is its simplicity. The workers at the pilot site assemble the blocks like Lego without the need for glue or cement. The beams are bolted together to form the walls of the building. Hayat Hassen Bedane, a 34-year-old structural engineer overseeing the project, stated that the aim is to simplify the construction process and enable inexperienced workers to build structures quickly. In just five days, they can complete a 50-square-meter building, a remarkably fast pace compared to traditional construction methods. Bedane also assured that the durability and strength of the structures have been thoroughly tested.

    In addition to the speed and efficient use of plastic waste, Kubik’s recycling process significantly reduces carbon emissions compared to cement production. The company estimates that by processing 45 tonnes of discarded plastic daily, it can prevent the release of 100,000 tonnes of carbon dioxide annually.

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    Not only does Kubik’s initiatives benefit the environment, but they also have positive social implications. The company’s recycling efforts support many informal waste pickers, especially women, creating a trickle-down effect that boosts their livelihoods.

    However, despite the company’s ingenious solution to plastic waste and its positive impact, Kubik faced challenges in securing seed money. CEO Kidus Asfaw mentioned encountering numerous rejections from cautious investors. Fortunately, after securing a round of funding worth several million dollars, Kubik’s production capabilities are set to expand. The success coincided with the company receiving the prestigious AfricaTech award, which helped raise its profile.

    Kidus Asfaw, who previously worked for Google, the World Bank, and Unicef, explained that although he had a vast professional network, fundraising was still a daunting task. Out of the approximately 600 people he met over two years, only around 20 became investors.

    African startups face numerous obstacles, including legal and regulatory hurdles, inadequate infrastructure, and a fragmented market. However, the lack of funding remains a significant and persistent challenge, as Africa lacks sufficient individual investors willing to support budding entrepreneurs. Sergio Pimenta, vice-president for Africa at the Societe Financiere Internationale, noted that out of the $415 billion deployed globally in risk capital, only 1% goes to Africa, with the majority focused on four countries: South Africa, Kenya, Nigeria, and Egypt.

    Henry Mascot, the CEO of Nigerian insurance startup Curacel, another recipient of the AfricaTech award, experienced difficulties raising capital in the past. Western investors, he claimed, often exhibit a bias towards the familiar, investing in individuals they have personal connections with. He highlighted the need for investors to spend more time in Africa and demystify the continent to overcome this bias.

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    Fabrice Aime Takoumbo, a Cameroonian entrepreneur and co-founder of Cinaf, a streaming platform featuring African content, added that non-African investors are often deterred by concerns of fraud and corruption. Without timely funding, many promising African startups fail to materialize.

    In conclusion, Kubik’s innovative plastic recycling technology has the potential to revolutionize construction practices while addressing environmental concerns. However, securing funding in Africa remains a significant challenge for startups, highlighting the need for increased support and investment in the continent’s entrepreneurial ecosystem.



    Credit: The Star : Business Feed

    Wan
    Wan
    Dedicated wordsmith and passionate storyteller, on a mission to captivate minds and ignite imaginations.

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