Investing in Africa’s Tech Start-Ups

A common problem for start-up companies to become successful is their lack of available capital to create and develop their business. Often, they have trouble finding investors or acquiring loans because of the risks involved in starting a business from scratch. In the developing world, these problems are greatly magnified, especially for tech companies. However, despite the odds, tech companies have formed in the most unlikely of places.

In Africa, only about a sixth of the population have access to the internet. Additionally, loan interest rates by banks can be as high as 28% according to the Globe and Mail. These hurdles didn’t stop Abasiama Idaresit forming Wild Fusions, now worth $20 million and growing.

In the developed world, start-ups have significant advantages in funding, available technology, and human capital, resulting from the abundance of investment firms, more access to higher education, and existing infrastructure such as access to the internet.

As Africa becomes more developed, we will see more businesses start up and more overall prosperity, like many emerging Asian and Latin American markets have seen, and tech start-ups such as Wild Fusions will be among the companies driving this development.

http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/african-tech-startups-held-back-by-lower-internet-penetration-scarcity-of-early-stage-capital/article15424220/

http://www.internetworldstats.com/stats1.htm

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