Fund Raising for your Startup in Nigeria ( Part1)

Raising Funding

Shout out s’awon goons
awon eruku mi
awon loni kin ma para toni keeping cool mi

~ Olamide, Awon Goons Mi~

So you have built an amazing startup, you have survived on garri and epa or cereal  or indomie ( insert austerity food of choice here) , you have a small team, you have brought a new meaning to the word bootstrapped, BUT you are seeing growth, you are earning revenues, you have customers who love your product, if you are super ambitious you have built a brand and are killing things online in your sector in Nigeria. But now you need to grow, you need money, so you create a killer investment pack, and off you go to the jungle that is “Nigerian FundRaising Scene”!

So whats it like trying to raise as a Nigerian Startup in 2015?!

First of all, things have changed since 2008-2010 which when I hear of the deals then, essentially there was a lot of “shafting”going on. However maybe “shafting” is not fair term. Some people made money, some people gave up significant percentage of their company for what some may consider little amounts. However there were winners and losers, such is life!

In 2010, something great happened though, Tiger Global ( Huge VC based in NY) and invested some of the very early startups, great news they essentially created the very first solidly financed tech companies in Nigeria.

Then they LEFT.

They have not been back since.

Apparently everyone is too small.

Class of 2012: Made notably included Konga and Jumia those guys are different from class of 2010 because they raised before they even started , funded by Rocket, Kinnevik. They started with a pile of cash. Do not compare yourself to those guys if like class of 2010 you are bootstrapped.

 

Then theres class of 2013 and 2014. well theres a lot of us in the class, but then there are  guys who are the top of that class. How can you spot a class leader?. They are probably allready category leaders, so Fashpa today is a leader in Online Fashion category, they are are past idea stage, they have a concept that works, traction, growth stage ventures, they probably have a CV which looks investible, probably littered with Google, McKinsey, HBS, Jumia,  Konga, JP Morgan and in some cases all 5!, they are probably bootstrapped and focusing on growth and building a team, can be found at tech cabal round table and maybe bottles on wednesday  (am joking oh) ( disclaimer startup maybe top of class without this attributes also)

Ok, so you get the picture, everyone thinks its easy for those guys to raise.. WRONG! its bloody difficult for everyone to raise ,for the following reasons!

1) There is a lot of focus on very early early stage funding:  Companies who need between 10k-50k. idea exploration. There was a flurry of accelerators and now also Tony Elumelu fund promising 10k. They will all say they have space room for growth stage startups but they are really not structured in that way. But they are great for the ecosystem they create a great pipeline and their valuations are getting there, better than class of 2010 for sure. So Today, if you have an idea, you should be able to get enough funding to get you to concept stage this is is progress!

2) There is no”angel scene” in Nigeria : Well again there are various makings of one, but not quite there, I have met a few members of the Lagos Angel Network but I dont know of anyone who has raised through them I could be wrong. There are lots of HNIs for sure but most people do not get tech or internet companies YET.. they will be soon but for now most HNIS prefer to put money in property or private jets, where they are guaranteed returns or enjoyment at least!

3) International VCS are not interested in “small deals”: Most startups at this stage are typically trying to raise between 250k and 1million and unfortunately this is too small for most global billion dollar funds. They are watching though and may or not be back when it times for your series A. I have generally been surprised with the quality of  high profile VCs who have reached out to me re:fashpa, so some myths are true, if you are doing something good, you will be found!

 

Its not all doom and gloom.  it is still possible to raise in Nigeria, start small, be creative, start within your network, reach out to family and friends,  again start small and you be surprised to see the puddles create an ocean, have a playlist that helps you through those long nights ( I recommend Olamide- I imagine its just me with my goons and we will make it much to everyones surprise) and be prepared to hear your fair share of NOs!

Some crazy guys I know ( am so happy to be your classmate), one startup I know raised $2 million from Nigerian “Angels” in Nigeria and another two have raised north of $1 million too for their growth stage startups, so it is possible, its just difficult, time consuming and heart breaking.

 

But hey nobody promised that it would be easy!

 

P.ssssss

There is so much to say on this topic, I didnt even touch on valuations- Nigerian style or Chasing Investors, look out for for future posts.

 

 

 

 

 

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LOOKU LOOKU.. Fashpa.com and Startups to Watch

DISCLAIMER

Here is what I think of lists, if am not on them, then I think they are just lists and the market decides, but If I or my company is on one, then I think they are just awesome!

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Seriously it was great to make the list of 8 startups to watch in Nigeria by the leading tech blog in Nigeria ..TechCabal alongside some pretty great startups as well.

Fashpa.com is seriously killing the game in fashion online retail, first movers in the space and no one does it quite like we do! so hell ya, we need to be watched!Congratulations to the whole team at Fashpa.com we have worked so hard this year and really proud of recognition that is now coming our way, the road is still long and paved with lots of kuru kuru but we are just the team to win. We really exist to please the customer, the day their fashion needs are solved, then we will go away.

If your looking to Invest in tech in Nigeria…it would do you good to check out these 8..Thank me later!

 

1. Fashpa

In the age of a billion e-commerce websites, Fashpa stands out for its commitment to becoming Africa’s primary online fashion lifestyle brand. Where many sites tend to focus on the nuts and bolts of e-commerce, Fashpa is trying to create excitement and loyalty around their brand. It will be a challenging journey but we think ex-Googler Honey Ogundeyi can deliver the goods.

www.fashpa.com

 

2. Delivery Science

Easily the most impressive new startup in Nigeria today, Delivery Science is everything we look forward to in a company – an experienced and competent team solving a real problem with real customers and local context. DS is bringing much-needed big data to the business of e-commerce logistics, serving the fastest-growing sub sector of the consumer tech industry. We’re expecting great things from them.

www.deliveryscience.co

 

3. Printivo

Printivo was started by the young yet experienced advertising entrepreneur Oluyomi Ojo and has quickly become the leading online print shop in Nigeria. Printivo’s dedication to customer service have endeared them to their customers and with the right support, it’s easy to see them becoming Nigeria’s default printer. What’s next?  Launching a new version of their web application and a designers’ marketplace to create opportunities for creatives to make money from the platform.

www.printivo.com

 

4. Hotels.ng

Hotels.ng is not a new startup per se, but they’ve defied gravity to maintain a solid position in the hotel booking space. Founder and CEO Mark Essien has continued to show incredible tenacity and leadership in spite of a robust challenge from Rocket-backed Jovago, ensuring that his company will continue to serve his market for the foreseeable future. We think the only place for this startup to go is up.

www.hotels.ng

 

5. Prepclass

Winners of TechCabal Battlefield 2014 have continued to impress. After pivoting from an online learning platform to a tutor marketplace, PrepClass have continued to grow, telling TechCabal that ‘demand is outstripping supply’ and trying to scale to keep up with the market. Wezam & Olumide may be young, but they are fiercely determined to make that business work and are succeeding.

www.prepclass.com.ng

 

6. Andela

Part-business, part-crusade, Andela aims to fill the world’s needs for developers by training them in the most ‘unlikely’ of places – Africa. Andela trains developers for free and then offers them as contract workers to companies from around the world. If they can make the model work, it will probably transform the startup landscape in the next 4-5 years. Fingers crossed.

www.andela.co

 

7. Truppr

Bosun Tijani, co-founder of the Co-Creation Hub started this project to find people to play sports with but it has quickly taken on a life of its own. What makes Truppr special is the community of fitness enthusiasts that has developed around it and the events it holds, making it a real phenomenon and actually touching people’s lives. We’re very excited to see what they’ll do next.

www.truppr.com

 

8. ChopUp

A late addition to the list, ChopUp Games have interestingly attracted angel investing from individuals such as Tayo Oviosu. ChopUp makes mobile games for Africa, most recently releasing Sambisa Assault. It will be interesting to see if they can unlock the mystery of gaming in Africa.

www.chopup.me

 

Photo Credit: Walt Stoneburner

 

First appeared on Tech Cabal, story by @seyitaylor

Startup Life is Hard .. BRUH

 

My last day at Google, I was very excited..startup life here I come!

Startups are hard, everyone says this, I remember before starting Fashpa, reading this post by the Igwe of Nigerian Startup scene and thinking Bwah just how hard can it be, isn’t everything in life hard anyway. I mean I didn’t expect it to be super easy walk in the park, but I just thought everyone overused the whole “hard life” startup thing. Maybe its was a really good shield to try and prevent other eager beavers like myself from quitting our comfy jobs and diving in. I have a good product, i have relevant experience, heck, I even worked in a few startups, I understand my consumers, there is clearly a large market, I have a team in place, I mean just how hard can hard be?

1 year later, am like scratch that, this thing is difficult bruh.

I dont think tech founders, especially Nigerian founders talk about in real tangible terms what hard means, and am not sure I will do it justice myself in this blog. But the closest thing I can describe it is like a big roller coaster ride. You experience high highs and low lows sometimes in one day, sometimes in 5 minutes. The bad part, it only seems to get harder.

If you are a solo founder then its even more difficult because you are carrying all this alone, (memo to anyone reading this find a cofounder if you can) especially if you have long used up your talking about your startup credits with friends and your partner ( I have exhausted mine, need new friends) so sometimes it is a hard and lonely journey

Reality Bites: Fashpa HQ, some ungodly hour, everyones left, in the kitchen crunching numbers

Another thing that makes it harder, is everyone is constantly asking you, how is it going? and rather than saying “bruh, this thing no easy oh” you probably find yourself saying some version of its going great, swell, fantastic, all our metrics are up, VCs are banging on my door, customers dont stop talking about us, all of which maybe true, but all those things could also be the reason why you have not slept properly in months! You ever ever heard of mo’money mo’problems?

Next the famous question work/life balance… you have a startup? you probably dont have one.. your life is just work and the occasional time you spend with other people trying not to think about work. In a place like Nigeria, as a solo female founder people will also make judgements on what that working hard should mean for you, sometimes this people will include members of your own family who will say “dont work to hard on this thing oh” as if  one is expected to treat this as a side hobby and quit and become a housewife at the first sign of difficulty and other statements that are just specially created to make your startup life even harder .

Finally startups are hard because they are violent places, not ray rice violent, however building a team under the auspices of hyper growth, bootstrapping, below market conditions pay and promise of a brighter tomorrow, means you will lose some people along the way. Sometimes this will be good people. I was on linkedin yesterday and the amount of people Konga has lost to Jumia and the other way round is just as I said, violent.

Perhaps all this happens to really test your mettle to really make sure you are ready for success when it comes knocking or maybe they are just hard because they are hard things.. I dont know, sway I dont have the answers…

 

 

Star Search

I Ngozi Edozien, Hakeem Belo Osagie, Me, Audu Maikori and Omoyemi Akerele. aka Me with SLA judges after I found out I lost.

Mostly because I am beyonce stan, I now understand how Beyonce felt at age 12, right at that moment when you realise that all your efforts has not culminated in gold!

In 1993, when she was 12 years old, Beyoncé Knowles took the Star Search stage with five other girls as part of the act Girls Tyme and performed a breathy song and dance routine. It was impressive, considering their ages. But they wound up losing to an all-guys rock group called Skeleton Crew, a moment that now lives forever as a soundbyte in “***Flawless,” one of the best songs on Beyoncé’s new album.

“In my mind we would perform on Star Search, we would win, we would get a record deal and that was my dream at the time,” Beyoncé said of the experience. But ultimately, facing Skeleton Crew helped her “realize that you could actually work super hard and give everything you have and lose.” It was “the best message,” she added, because it made her more determined than ever.

SLA was a good journey and lesson, that can applied to startup life. Now working on being Beyonce and I am even more determined.

Huge Congratulations to Cherae Robinson, who is bridging the gap between tourism and development with #rarecustoms and the She Leads Africa team, for a putting together a great platform to showcase the best of Africa’s Women entrepreneurs.

 

Making the “Forbes” List

So this happened on friday along with the other SLA finalists, I made the forbes list of emerging women entrepreneurs list in Africa. On the same friday, I I spent the better part of the day with my tech team in search of the holy nirvana of power and internet.

With no working generator at Fashpa HQ and impending deadlines, I and the tech team literally fled the office, in our case in the first yellow cab to the nearest hotel/restaurant in search of power. We got there and their internet was also out! It took like three hours to get both POWER and INTERNET and be up and running.

So I guess I am not quite forbes ready or the EMERGING title is very well justified! Great thing I was wearing my sneakers, one needs to be comfortable of startup life in Nigeria!

Starting Up!

Its been five months since I made the transition from paid employee to startup CEO/Founder.  It took me at least ten years  to make this move and a some additional treacherous months of over thinking and analysing on how/when/if I should bite the bullet. Today I decided to make a Top Ten list, of what I would have told myself in Jan 2014. Its amazing how far I have come and for those thinking starting up, my advice is simple. just do it!

1) You will not miss your old job even by a day. Nope as much as you think you love it now, you will strangely not miss it.

2) You will miss the free food though, the fresh juice and the friday small chops conversations while arguing over which YT video is we love that week!

3) You will love building your dream, you will work till 3am and still be excited to be up at 9am in time to go in the office! yes Crazy

4) You will find that the hardest part is building a solid team, but you will find a few awesome people who think your company is pretty dope

5) You will get upset when your first hire leaves, it will feel like you were dumped when you were 13, everyone will tell you this is silly !

6) You will find People Management and finding talent much more difficult that you thought and wonder why no one talks about it, you will discover a new found respect for your manager and wish you hadn’t given her/him such a hard time

7) You will obsess about your company day and night, all conversations about anything can be linked back to life at fashpa

8) You will wonder how your friends and family put up with you, because you work all the time and you will forget birthdays. Shoutout to YF! I love you sorry for forgetting you and pampers bday this year!

9) You will stretch the truth at interviews about work life balance, because the truth is you dont have one, but that just sounds bad, so you will say you manage the two well!

10) You will genuinely be happy  about starting the F***k up and  building your dream, even on those bad days when you just want to run home and hide