Understanding Accelerator Programs in Africa
Last week we wrote about Y Combinator’s (YC) investment into Africa, breaking down their investments by industry over the years and highlighting their focus on early-stage FinTech.
YC has invested in over 100 startups in Africa, and is often perceived to be the gold-standard for early-stage startup accelerators. However, a new generation of African focused, and in some cases African-born, accelerators are sprouting up, with a handful more established programs gaining significant global interest.
These programs are pivotal in nurturing early-stage startups, offering them the support, mentorship, and financial backing needed to thrive. But what exactly are these accelerators, and how are they shaping the startup landscape across Africa? Let's dive in and explore the transformative role of accelerator programs in the continent's burgeoning startup ecosystem.
What Are Accelerator Programs?
Accelerator programs are intensive, short-term bootcamps that aim to fast-track the growth of early-stage startups. They provide a blend of mentorship, funding, and networking opportunities to propel startups to the next level.
How Do They Differ from Incubators?
Unlike incubators, which often focus on nurturing ideas from inception, accelerators are designed for startups ready to accelerate growth and scale quickly. This distinction is crucial for founders considering which path to take.
The Role of Accelerator Programs in Africa
Boosting Startup Growth
In Africa, accelerators are more than just launchpads for startups. They are vital in overcoming the unique challenges faced by African entrepreneurs, from market access to operational hurdles.
Facilitating Access to Funding
One of the biggest barriers for startups in Africa is securing early-stage funding. Accelerators bridge this gap by providing capital and connecting founders with potential investors.
Providing Mentorship and Networking Opportunities
Beyond funding, accelerators offer a wealth of knowledge through mentorship and access to an extensive network of industry leaders, potential partners, and fellow entrepreneurs.
The Landscape of Accelerator Programs in Africa
Notable Accelerator Programs Across the Continent
From Egypt's Flat6Labs to South Africa’s Grindstone, Africa is home to numerous accelerators supporting a diverse range of sectors. These programs are at the forefront of the startup revolution, each with its unique approach to fostering innovation.
Here’s a high-level overview of some of the top accelerator programs in Africa:
Antler Kenya:
- Antler Kenya is part of the global network of Antler accelerators. With offices in 27 cities across six continents, including Austin, New York, London, Berlin, Stockholm, Bangalore, Jakarta, Singapore, Seoul, Tokyo, and Sydney, Antler is one of the more established programs operating in Africa.
- Antler programs in Kenya range from seven to 12 weeks for the venture-building track where founders join the community to build a brand new startup from scratch. They also offer acceleration for early-stage startups.
- Following the program, investments of around $150K for 10% equity are sometimes offered.
The Baobab Network
- One of Africa’s leading accelerators, The Baobab Network is an intensive 12-week accelerator with hands-on, albeit remote, support from their expert team to problem solve, build, and get investment ready.
- With investments into startups like Triply.co, who form part of YC’s winter batch in 2024, The Baobab Network has proven it’s ability to help startups get ready for subsequent investment.
- The program includes a $100k investment into startups at the beginning of their program.
Founders Factory Africa
- One of the largest programs in Africa, the Founder’s Factor Africa was established in 2018 and has invested in a portfolio of over 60 ventures across 10 countries in East, West, North and Southern Africa.
- Through very strategic hands-on support across all aspects of a startup’s business, Founder’s Factory support by investing up to $250,000 in ventures at idea, pre-Seed and Seed stage.
Flat6Labs
- Annually, Flat6Labs invests in more than 100 innovative and technology-driven startups and is one of MENA region’s leading seed and early stage venture capital firms.
- Having recently raised a $95 million Africa Seed Fund investment vehicle that will mark its first venture outside MENA into East and West African startups, it’s clear that their focus on Africa is increasing.
- In terms of early-stage accelerator funding, every 6 months, Flat6Labs Cairo provides seed capital to 10 startups, each company receiving up to $50 000 upon joining the 4 month program.
techstars Nigeria
- Part of the much larger techstars accelerator ecosystem that plans to invest in 700-800 companies through 50+ accelerator programs in 30+ locations around the world, the accelerator takes place in Lagos, Nigeria over 3 months and is in-person.
- In addition to hands-on support, techstars Lagos invests up to $120,000 in each company at the time of the accelerator program: a $20,000 equity investment for the right to 6% in common shares, and an optional $100,000 convertible note.
Startupbootcamp South Africa
- An intensive, 3 months accelerator, Startupbootcamp South Africa happens in-person and provides startups with office space in Cape Town.
- Their investment is a combination of resources, including: €15.000 in cash per team, a free residency in a co-working space (up to six months), and more than hundreds of hours of 1 on 1 mentoring. In return Startupbootcamp obtains 6-8 percent equity in the startups they invest in.
In addition to the African accelerator programs listed above, there are numerous other options for early-stage startups and founders looking for support, including Accelerate Africa, MEST Africa, and 500 Startups. What’s important is ensuring you choose to apply to the right accelerator program for you and your startup.
How to Choose the Right Accelerator Program
Aligning Goals and Expectations
Startups must carefully evaluate potential accelerators, ensuring their goals align with the program's offerings and expectations. Research into industry or model-specific versus general accelerators, and the personal network and reach of key individuals within said accelerators, are crucial for founders considering which programs to apply for.
Evaluating Mentorship Opportunities
The quality and relevance of mentorship can significantly impact a startup's trajectory, making it a key factor in the selection process. An understanding of the support provided considering what the founding team actually needs is something to pay attention to. Unless dealing with a very experienced founding team, the structure and nature of founder support should be viewed as equal value to the capital injection from the accelerator’s investment.
Understanding the Equity and Funding Structure
It's crucial for founders to understand the equity requirements and funding structure of the accelerator to ensure a mutually beneficial partnership. It’s always worth having a second pair of legal eyes boxing from your corner when it comes to reviewing the fine print.
The Future of Accelerator Programs in Africa
Trends and Predictions
As Africa's startup ecosystem continues to evolve, we can expect to see more specialised accelerators, increased collaboration between programs, and greater emphasis on sustainability and social impact.
We forecast that an increasing number of incubators will gear towards becoming accelerators, while this natural progression stems existing accelerators towards becoming fully-fledge venture builders. By growing internal teams, or acquiring service providers specific to startup growth, accelerators can strengthen their support of portfolio companies and subsequently de-risk investments.
Typically, a venture builder accompanies its young ventures until they exit the venture, whereas accelerators and incubators only accompany ventures for a shorter time of their development journey.
Here’s a high-level illustration of the differences between accelerators, incubators, and venture builders:
Conclusion
Accelerator programs in Africa are more than just a trend; they are essential catalysts for innovation and growth in the startup ecosystem. By offering funding, mentorship, and networking opportunities, these programs play a pivotal role in shaping the future of African entrepreneurship. For founders and early-stage startups, choosing the right accelerator can be a game-changer, providing the tools and resources necessary for success in the competitive global marketplace.
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FAQs
- What exactly is an accelerator program?
Accelerators are time-intensive and highly focussed programs for early stage startups focussed on growing quickly. Accelerator programs more often than not include investment into the startup and hands-on support and mentorship for founders.
- How do accelerator programs in Africa differ from those in other regions?
Startups operating in Africa face unique challenges when compared to startups globally. Many of the accelerator programs focussed on African startups with provide specific support, structuring, and mentorship to founder to overcome these hurdles. The right programs will also offer African startups access to international opportunities they may otherwise have struggled to find.
- Can any startup apply to accelerator programs in Africa?
For the most part, yes. Each accelerator program in Africa has it's own selection criteria so it's worth taking a look at the programs suggested above to ensure your startup qualifies. Due to the early-stage focus of accelerators, they're usually open to most startups that can prove traction.
- What are the key benefits of joining an accelerator program?
Joining the right accelerator program will provide founders with mentorship, hands-on support, and a small amount of investment to rapidly validate and grow the business. Most accelerator programs also help startups prepare for larger rounds of investment.
- How can startups find and apply to accelerator programs in Africa?
African accelerator programs, particularly the ones mentioned above, usually have a minimum of 2 cohorts per year, meaning there are applications open more the most part of the year for the next cohort. The best way to find accelerator programs would be to research the ones listed above, alongside additional research across the web.
