We were invited to work with the UN’s World Food program and the Elon Musk funded XPRIZE Foundation on their efforts to democratise access to the resources they have available to agritech founders across the world. The context of our invitation was this, how do we get more African tech founders engaging with our resources?” As program organisers working directly within the African tech ecosystem, we are providing the organisations with our insight. Our secret sauce or primary methodology is co-creation. With that in mind, ahead of the visit to meet the teams of both organisations in Munich, we asked some of our founders to give their views on the topic as well. A couple of the Afritech XYZ founders and our team are heading to Munich to discuss these insights in detail.
The UN’s World Food Programme has been tasked with delivering the Global Learning XPRIZE; a $15 million competition sponsored by Elon Musk which challenges teams from around the world to develop technology created to support children’s education in the world’s poorest and most remote places.
For those of you that don’t know, XPRIZE uses large-scale global incentive competitions to crowdsource solutions to global social challenges and strives to inspire and guide innovators to create breakthroughs for a world “where every man, woman and child can access all the energy, clean drinking water, shelter, education and healthcare they require”.
The AfriTech XYZ team asked some of our founders what barriers they faced within the African agriculture ecosystem, particularly when applying to large-scale, international startup competitions. While our founders strive to solve a range of problems in different parts of the continent within the agriculture space, their struggles as African entrepreneurs are very much shared across contexts.
The challenges of having a solid “proof of concept” and proving sustainability
This is a very real issue for many entrepreneurs worldwide - but fundamentally more challenging for African startups who tend to not be gifted with easy access to capital.
According to Luna Bawa, CEO of EveryFarmer, “a real challenge for us in the African agriculture founder community is being able to demonstrate return on investment. I find the level of data that international large-scale competitions require in order to prove viability can hinder our ability to progress through to final rounds. This is often through no real fault of our own as the data for elements such as governing laws, regulations, land ownership, insurance, agronomics, and price volatility are just not available. Our inability to evidence profitability because of these gaps in our documentation can inevitably lead to rejection.”
While not being able to obtain data to prove business sustainability hinders progress in applications, some founders express an added challenge of not having the capacity to pull the needed data together to a standard that would be suitable for large scale competitions.
Apprehensions around intellectual property and business readiness
Joash Bwambale, CEO of IRRISOL tells us:
“One of the key challenges I’ve come across is startups’ lack of understanding of Intellectual Property. A lot of African agricultural founders haven’t patented their solutions and also don’t really know the legal steps to take in order to protect their ideas. The fear of their idea being stolen or copied by other people often puts them off applying for international startup competitions. Those that do apply sometimes worry about disclosing too much information about their business for this very reason”.
Not giving enough information about the startup’s true capabilities immediately puts it at a disadvantage and in some cases can cause its elimination from the process. This highlights a real need for startups on the continent to be part of a support network that not only provides information on every area of business growth but also access to people that can help them understand the complex entrepreneur landscape.
With so little funding available to pay professionals to effectively protect the startup’s rights during the process, vague language about the way information submitted will be used during and after the competition is a hindrance. The burden should be on the side of the international organisations running the competitions. Providing a webinar or two about the way their information will be used, the rights of the startups and the expectations on both sides of the table would help ease apprehensiveness and encourage more African startups to trust that they are not ultimately being taken advantage of.
One of the things we did in building the AfriTech XYZ application and recruitment process was to recruit a selection committee of figures the startups were already familiar with and could trust. We effectively traded on the trust the startups already had with our brand and borrowed the trust they have in the members of our selection committee (as approachable experts within a small but thriving ecosystem).
Competitions need a more inclusive measure of financial success
Cynthia Aveh, Founder of Trusteefarm, thinks that the requirements to advance through these competitions are almost insurmountable:
“A typical example of the requirements in a competition states that the startup must have $100,000 in annual sales or revenue, must have raised about $500,000 or more in investments and must have a team with some professional backgrounds and so on. A lot of African startups have yet to have this level of capital in their business so it becomes a real barrier for founders to feel confident in applying.”
When developing criteria for the application process, are the competitions that seek to engage founders worldwide actually inclusive of those founders experiences? A simple example is currency exchange rates. A highflying early-stage startup in an African country could be making very impressive revenue, but when put in context of the criteria of some competitions and that revenue is converted to USD or GBP, it pales in comparison to the revenue being accumulated by startups already in those regions working primarily in that currency. It forms a bias immediately. It sacrifices high potential African early-stage startups for late-stage startups and puts them in competition with early-stage startups from wealthy countries with more favourable currency conversion rates.
The way we sought to tackle this in AfriTech XYZ was to create an “up to” barrier rather than an “over and above” barrier. That means our language clearly expresses the criteria we apply doesn’t discourage startups that have not yet made that level of finance from trying to become part of the cohort. What tends to happen is that if a startup is not yet making $100,000 in annual revenue but does fit the majority of the other clearly laid out criteria, they are not discouraged from applying. In most cases, the revenue barrier is used as a proxy for an assumption that program designers are making. However, it is rare for assumptions to work in a global context. Instead, fill the application with yes or no and multiple-choice questions that can be used internally to develop a rich scoring system that will put all the applicants on a level playing field.
Issues with infrastructure, bias and network
The need for a better infrastructure across Africa continues to be a topic of discussion - and for very good reason. Poorly built roads, frequent power surges, and underdeveloped transportation can challenge a company’s ability to produce and deliver services on time, to the point of inhibiting growth and incurring losses, our founders tell us. Founders also feel that international investors hesitate to fund companies in the agricultural space in Africa because the risks can be deemed too high.
“Apart from underdeveloped infrastructure, the wide range of confusing political, regulatory, and trading laws and trading in multiple currencies can limit the expansion of an agricultural business within the continent,” explained Cynthia Aveh. Founders’ awareness of these issues puts them off applying for growth funds because they are acutely aware of the environmental shortcomings such as infrastructure and existing working capital.
High-tech isn’t always the best tech
While more and more startups are adopting technology to help solve problems within the agricultural space, some of our founders feel that high-tech solutions aren’t necessarily always the best solutions. Angie Madara, founder of Growd Global, who previously ran a startup in the AgriTech sector explains:
“While high-tech solutions are highly sought, smallholder farmers in most of the developing markets are low-tech or even non-tech users. Lack of the necessary infrastructure in these areas can mean that high-tech solutions are impossible to adopt by farmers. The solutions can be impractical and unworkable due to lack of required understanding and resources to implement the technology.
“What chances do we have when most competitions these days only pick solutions that are extremely high-tech? I also think that most investors in these competitions don’t understand the end-users and therefore what help or solutions can they offer for problems they don't understand themselves?”
This sentiment is one we have heard a lot as we speak to investors across Europe and the UK about barriers they face when it comes to investing in African tech startups. The solution that most seem to agree on is the need to identify strong partners in individual countries who understand the local landscape and have them choose the best of the best on behalf of the competition, fund or grant body. Rather than imposing assumptions on the African tech landscape of shirking it off altogether, identifying partners who understand the landscape, know how to run competitions and scout startups ought to be the most effective way to create a more inclusive system for including the world in a global competition such as the Global Learning XPRIZE. While the competition has done made a commendable effort so far we are encouraged by their effort to double down on their learning to find ways to become even more inclusive in their outreach.
Founders in the African agricultural tech space truly face an uphill task in progressing in large-scale, international startup competitions. Listening to what our founders have to say, it is clear that they all face similar challenges. Barriers to taking their ideas to the next stage include having mentors, business know-how, issues with infrastructure and regulatory conditions and adequate data. There remains so much more to be done in order to support the continent’s innovators in finding solutions to Africa’s development, progress and growth.