A few months ago, we came across a tweet from a Zambian startup founder inquiring about funding for Zambian startups. After 10 years of supporting entrepreneurs, this is a conversation we are familiar with because we frequently receive similar versions of this question. The questions we are asked range from whether we provide funding to startups, if we link entrepreneurs to people, to whether we work with organisations or institutions that provide funding for them. Even our most popular Google search queries are usually from searches for “funding for startups in Zambia”. Given this, we thought it might be useful for us to share our insights on sources of funding – for a Zambian startup.
For any startup, in or outside Zambia, raising funds can be quite challenging. Disrupt Africa shared a report on African Tech Startup Funding (2020) which found that Kenya, Nigeria, South Africa, and Egypt had the most funding transactions in comparison to other African countries over the year. One of the reasons for this is that significant amounts of funding are more likely to be given to areas with more developed startup ecosystems. Startup ecosystems are ranked globally based on the quantity and quality of the startups, supporting organisations, and the business environment (Business Insider Africa). In 2020, it is reported that only 4 Zambian startups received notable funding, totaling up to US$3,850,000. These were: Good Nature Agro raising US$2,100,000 from a variety of funders; Lupiya (US$1,000,000) and PremierCredit (US$650,000) who both raised funding from Enygma Ventures; and WidEnergy who raised an undisclosed amount from ShEquity.
By the end of 2021, African startups had raised over 2.5 times the amount of the 2020 performance, according to a report by Max Cuvellier from The Big Deal. In December 2021, Zambian startups were reported to have raised between US$1million and US$10million of investment. To mention a few; Union54, a FinTech founded in 2021 off another local FinTech Zazu, secured a US$3million seed fund from Tiger Global after their participation in the prestigious accelerator, YCombinator. Lupiya, another FinTech startup was also a recipient of funding from the US$5 million Google for Startups Black Founder Fund. There are other deals that took place that were not publicly announced.
So, where should Zambian startup founders look for funding? There are various sources of funding available, depending on the type of business the startup is in, the industry, and the size of the business – which we will cover in our upcoming articles about funding for startups.
We hope you found this article useful. For resources to assist your entrepreneurship journey, visit our Entrepreneur Resource page on our website.