Tech: Digital Africa publishes its white paper entitled ‘Supporting Made-in-Africa digital innovations’

Digital Africa publishes its white paper entitled ‘Supporting Made-in-Africa digital innovations’. Building on recent successes such as its Bridge programme, Digital Africa is looking to move away from its initial non-profit model with a refreshed governance structure, a new business model and the ambition to get closer to the private sector. As part of its white paper, Digital Africa also releases its updated roadmap for 2022-2025. 

By the editorial staff

After 3 years of existence, Digital Africa_a €130 million pan-African, European and French public-funded organisation committed to boosting African start-ups_ is reinventing its model to support the growth of its activities and better serve the needs of African tech entrepreneurs. To do so, Digital Africa is looking at joining forces with Proparco (investment arm of the Agence Française de Développement – AFD), bringing additional expertise to their existing investment programs. Digital Africa would be positioned as the continuum to Proparco, focusing on early stage startups. The objective would be for Digital Africa to be able to deploy direct seed financing capabilities for high-potential start-ups across the continent. Thanks to this unique model, Digital Africa will have the potential to become a one-stop shop for the African tech scene, acting like a super-aggregator of data, policy knowledge, capabilities, and funding opportunities.

Digital Africa also reinvents its governance with a new partnership-based model. A strategic committee will be deployed bringing together ‘doers’ from key African tech ecosystems to guide Digital Africa’s actions. In that regard, a call for candidates will be launched on March 1^st. The objective is to better reflect the diversity of African tech ecosystems from both a geographical and skill perspective, by bringing together entrepreneurs, investors, training, and research organisations, incubators, and innovation policy experts from key tech ecosystems across the African continent. 

This new business model and governance structure will strengthen Digital Africa’s bottom-up approach, enabling the organisation to constantly update its programmes, based on calls for projects and direct interactions with African entrepreneurs and partners on the ground.  

Stéphan-Eloise Gras, CEO of Digital Africa, declared “After three years of existence, we are more than ever convinced that Made In Africa Technology is key for a more inclusive and sustainable growth.  This is exactly why our goal is to boost African start-ups and tech ecosystems. And the best way to do so is to reinvent our model, becoming a public-private entity guided by  Strategic Committee, with a diversified business model and extended capabilities.”

An updated roadmap for 2022-2025

As part of its white paper, Digital Africa also releases an updated roadmap for 2022-2025 together with a refreshed set of objectives, with the ambition to support 200 high-impact African start-ups. To achieve this ambitious objective, the white paper clearly outlines a set of renewed objectives and 17 programmes organised in 3 focus areas: 1) Equipping high-impact and digitally enabled start-ups, 2) Sourcing African and Global Finance to scale up projects, and 3) Developing research and policy recommendations in support of Made-In-Africa Digital Innovations.

Bridge Fund by Digital Africa, a successful response to pressing issues for African Tech

BRIDGE is a five-million euros fund, launched by Digital Africa and deployed by Proparco to address both short-term and long-term financing challenges for African start-ups. It aims to support African start-ups that are impacted by the Covid-19 crisis and those in their seed phase or between two fundraising rounds by giving them access to venture debt, a form of financing currently lacking across Africa. 87% of African start-ups don’t have access to any financing, and only 20% of SMEs have access to bank loans. This is a stark contrast to the fact that Africa is the continent with the highest number of investors, and where SMEs generate 90% of formal jobs.

In a few months only, over 230 start-ups applied from across 40 countries in Africa, and €3.4 million out of the fund’s €5 million budget have already been allocated. The first loans were signed with ten start-ups from all over Africa with tickets ranging from 150,000 euros to 600,000 euros per company. Three of the ten start-ups subsequently raised Series A, B and C equity rounds on the back of BRIDGE financing.

Stéphan-Eloise Gras, CEO of Digital Africa, declared: “We designed Bridge fund to provide responsiveness to African start-ups’ needs in the time of a global pandemic. But we also saw its utility beyond. Our intuition was that more can be done to address the funding gap, especially with debt mechanisms. There is an opportunity now for Digital Africa and its European partners to scale-up and accelerate innovation “made in Africa”

Grégory Clemente, CEO of Proparco declared “Nearly a year and a half after its launch, the success of the Bridge Fund confirms that it concretely meets the needs of entrepreneurs on the African continent. Thanks to the complementary approach proposed by Digital Africa and Proparco, Bridge Fund is a real tool for accelerating the growth of startups and responding to the increased financing difficulties linked to the COVID-19 crisis. With Digital Africa, we share the same ambition: to be alongside entrepreneurs!”

Agility and responsiveness, the guiding principles of Bridge Fund 

The large number of start-ups funded in a short time frame was made possible by the agile process implemented by Digital Africa and Proparco, targeting high-potential start-ups that are at least 18 months-old and have already received funding from an investor or a recognized structure.  Another key criterion to secure support is dedication to the African tech ecosystem. Candidate companies must achieve 75% of their turnover (minimum €200,000) on the continent or have at least half of their teams based there. In line with this ambition, the sectors targeted by BRIDGE are strategic for African economies: agriculture, energy, internet access, education, health, financial inclusion, logistics and green mobility.

To read the White paper ‘Supporting Made-in-Africa digital innovations’