In 2018, Immy Nakyeyune embarked on a transformative journey, founding Mkazipreneur with a single mission: to support women entrepreneurs across Africa. Through strategic funding and targeted partnerships, Mkazipreneur in Uganda has trained more than 10,000 women entrepreneurs and transformed non-tech-based, women-led SMEs into technology-capable enterprises. The organization has also played a central role in facilitating access to capital and markets, promoting the growth and sustainability of women-led businesses.
There are many similar stories of organizations driving the growth and sustainability of startups in sub-Saharan Africa. These organizations, often called Business Support Organizations (BESOs), act as incubators, accelerators and technology hubs. They provide invaluable and in-depth support that African entrepreneurs need to grow within and beyond their local markets. The region has over 600 active ESOs, a testament to the continent high rate of entrepreneurship.
In recent years, the ecosystem in sub-Saharan Africa has experienced unprecedented growth. Between 2018 and 2022, early stage funding increased by 227%, highlighting the rapidly growing startup scene in the region. Despite this increase in funding, significant shortfalls in capital and training remain, hindering significant progress in ensuring sustainable growth and development. Investor skepticism adds another layer to this challenge, as startups in the region are often overlooked and considered high-risk and lack the necessary infrastructure and support systems for scalability.
De-risking startups is therefore key to boosting investor confidence, and this means moving beyond directing funding to startups to investing in ESOs, the first line of support for early stage startups in the region.
Ecosystem Building: Strengthening ESOs for Sustainable Development
Despite their importance, only a small fraction of funding reaches ESOs. Organizations such as Argidius Foundation are at the forefront of ecosystem building initiatives, supporting the creation of effective ecosystems for small and medium-sized businesses.
Through Uganda Ecosystem Builders Programthe foundation partnered with Village Capital to support Mkazipreneur and 12 other ESOs to improve their strategy and sustainability.
“By supporting organizations that build business ecosystems and provide direct support to start-ups, the African Development Bank hopes to create a ripple effect that will spur the creation and growth of more start-ups, creating jobs and value for their communities and customers ».
African Development Bank
“After seven years of offering free services, the program challenged us to switch to paid services and we haven’t looked back. The beginning was slow, but we have attracted a new caliber of startup founders who are able and willing to pay. The beauty of paid programs is that participants are much more active in the program. They feel the pinch of their money. We also attract entrepreneurs who are more committed to growing their businesses,” shares Noeline KiraboIts Executive Director Kyusaa Uganda-based ESO that provides business development services for small and growing businesses.
“This move has helped us diversify our revenue streams and we are putting more emphasis on generating revenue gains. We are clear about how and who we target. Running the program was a real awakening for us. We are confident that we can remain risk-averse with our new business model regardless of the changing tides.”
E4 Impact is another example of a notable ESO that has benefited from ecosystem building initiatives. In 2021, ESO was among the few selected to join the O-Farms program created to scale the circular agri-business ecosystem in East Africa.
“We joined the O-Farms program to strengthen our support for emerging entrepreneurs and strengthen our overall business capabilities in the agri-cycle space», Isabella TenayAccelerator Manager at E4Impact, reflects on their experience.
“Through comprehensive program training and preparation, we significantly improved our program management skills and expanded our knowledge of agro-cyclicality. As a result, we have seen significant improvements in our ability to support entrepreneurs in the green economy and have successfully applied these learnings to other projects within our organization, for example, the E4Impact Accelerator and WONDER, among others. The program’s insights into the principles of circularity, last-mile market development and structured investment readiness have been invaluable, enabling us to drive growth and efficiency in our initiatives.
“Entrepreneurs and start-ups with innovative ideas and services play an important role in contributing to the Sustainable Development Goals. Today, such bodies are often denied access to funding and technical support due to a number of barriers.”
Development Finance Institutions (DFIs) They are also channeling their funding towards creating ecosystems to advance their broader initiatives that promote economic growth. In 2022, the African Development Bank (AfDB) launched the Innovation and Entrepreneurship Workshop as part of the Jobs for Youth in Africa strategy.
One of the strategies The Lab uses to promote youth innovation and entrepreneurship is to support ESOs. “By supporting organizations that build business ecosystems and provide direct support to start-ups, the African Development Bank hopes to create a ripple effect that will spur the creation and growth of more start-ups, creating jobs and value for their communities and customers», best moments the bank.
More recently, with support from Norway via Norad — the Norwegian Agency for Development Cooperation, Village Capital launched the Empowering Sustainable Entrepreneurship Africa program. This initiative, which aims to strengthen climate entrepreneurship in Ghana, Kenya, Malawi, Mozambique, and Tanzaniait has a double structure.
First, it supports ESOs by providing them with the tools and resources to build sustainable organizations, enabling them to develop initiatives that effectively support climate startups. Speaking about the launch of the program, Per Fredrik Ilsaas PharoDirector of Climate and Environment at Norad, shared:
“Entrepreneurs and start-ups with innovative ideas and services play an important role in contributing to the Sustainable Development Goals. Today, such agencies often lack access to funding and technical support due to a number of barriers. We hope that some of these barriers will be overcome by strengthening the business ecosystem through Entrepreneur Support Organisations.”
The connection between ESOs and entrepreneurs cannot be ignored. Founders need more than funding: they need an ecosystem that can fully support their unique needs. ESOs act as catalysts, providing critical support for the development of sustainable startups and cultivating an investment pipeline for impact investors.
Strengthening this vital partnership is key to creating a thriving ecosystem, especially in regions like sub-Saharan Africa, where the business landscape is vibrant yet challenging. Investing in ESO is not just a strategic move. it’s smart business.
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