"With the global economic slowdown trickling into 2023 due to inflationary pressures and tightening monetary policy, investors on the continent will maintain a judicious approach to investment and African startups will continue to find fundraising challenging," Bruce Nsereko-Lule, a general partner at Seedstars Africa Ventures, recently said.
Continuing with the trends from the previous year, ecosystem analysts say that there will be a surge in layoffs, scaling down of operations and business shutdown. "My 2023 prediction is that things will get worse before they get better — down rounds, layoffs, closures and bridge rounds will continue to increase in the African startup ecosystem," Abel Boreto, Novastar Ventures stated.
As the downturn slows down funding, African tech companies are looking for other options to raise funds for their operations, and one of those is crowdfunding.
About a year after closing a six-figure pre-seed round led by GreenHouse Capital, Nigeria-based VC crowdfunding platform, GetEquity is raising $100,000 from retail investors on its platform at a $10 million valuation. The company raised $1200 at the time of this report—16 hours after the announcement.
GetEquity intends to achieve what Herconomy did in 2021. The female-focused fintech raised 20% of its $600,000 pre-seed round in 24 hours via the GetEquity deal room. Gokada, an e-commerce logistics company, recently announced that it is raising $750,000 at a $10 million valuation via the platform.
Founded in 2021 by Jude Dike, William Okafor, and Temitope Ekundayo, GetEquity provides a digital platform democratizing access to venture capital. "GetEquity is challenging the status quo of startup financing and venture capital. We are democratizing access to startup funding and thereby expanding the pie for previously underfunded and underserved startups," Dike said in a statement obtained by Benjamindada.com in 2021.
Since its launch, the company is operational across seven countries—Nigeria, the US, the UK, Kenya, Rwanda, Tanzania and Uganda—with plans to expand to Egypt, South Africa and Dubai. Over 30 companies have crowdfunded more than $1.3 million.
With a revenue of $320,000 in 2022, GetEquity's revenue is forecasted to grow at a 328% CAGR to reach $23 million by 2025, according to an email sent to investors. The company has also recorded the exit of two listed companies—WirePay and Bridgecard—from the GetEquity platform at exit multiples of about 4-6x in excess of initial investments made by investors.
In 2022, GetEquity operations were referred to as a "regulatory misfit", according to an investigation by WeeTracker. However, the company, through its FAQs page, states that it "operates as a duly registered Syndicate by the Corporate Affairs Commission (CAC) we are also in conversations on getting the right license type. However, for now, we operate as a digital syndicate (group of investors) who pool money together to invest in companies".
The company is yet to respond to Benjamindada.com's request for comment on this report.