Entrepreneurs and startup founders face a whole lot of problems with their business. One very pronounced one is the issue of capital/funding. In this present day, it is quite hard for a new founder to get the required capital for his/her business. This is exactly where Guanxi Invest comes in.
This is a platform that enables startup founders to crowdsource funds for their venture. The Cameroon based startup tackles the dreaded problem of funding for entrepreneurs.
In this chat with the CEO and co-founder, Cedric NGONDI, he shares how Guanxi Invest is complementing the stock exchange market, how the startup is currently being funded, their business model and many more. This might just be the beginning of the end for this long standing problem of funds for entrepreneurs.
Pitch your startup to us in just a sentence.
Guanxi is a crowdinvesting website that enables entrepreneurs in Africa to raise funds online for their activities.
Does your model not conflict with that of the stock exchange in Cameroon? Tell us more.
At Guanxi Invest, we enable fundraising for startups/companies within a limit of 50 million FCFA. In accordance with article 81, 82, 83 of the OHADA law, this activity is not referred to as an initial public offering.
The companies in the stock exchange market being referred as undergoing public offering; our activities are not in conflict with the stock exchange market.
Henceforth, I’ll rather say that our platform comes as a complementary role to that of the stock exchange market by focusing on companies seeking for lower funding who may find an interest in this type of financing.
How well has Guanxi Invest grown since launch? Would you say to have made significant progress?
First of all, I want to say that, in just less than a year of existence, our company has experience a dazzling progression. Despite all the challenges we faced at the beginning of our operations, we gain considerable recognition for your initiative both at the national level (Startup Weekend and Seedstars Douala) and at the international level (Bridge for billion special prize at ESSCA Digiprize & Top 100 most promising fintech companies at the African Fintech Awards 2017).
Secondly, our platform has been operational since March and the first fundraising campaigns started in April. Till date, our platform has over 320 users with 52 active investors that account for around 7 million FCFA invested in 2 fundraising campaigns.
Considering the context and the environment in which we operate, I think we have made a lot of progress in our few months of existence. However, we are conscious of the fact that a lot still has to be done and we are working day and night to make sure we meet our objectives.
Are there any competitors in this market? Tell us about them.
Crowdfunding in Africa is still at its infant stage. There is still little competition today compared to the market potential. Also, most of the the crowdfunding website that exist are not based in Africa and we are fortunate to be among the few that are actually based here.
The most common form of these platforms are donation based and reward based crowdfunding websites as compared to other forms. Some of these African based crowdfunding websites include Cofundy, M-Changa, Thundafund (donation based); Iroko project (crowdlending); Waalam (royalty crowdfunding), Realty Africa (Property crowdfunding) and of course Guanxi Invest (equity based) just to name a few.
What is the business model of the venture?
Our business model is simple. We charge a commission fee on the amount raised via the platform. We may also charge additional fee due to some counseling (finance, management, marketing) services to help increase the chances of success of a campaign.
How is Guanxi Invest funded? Bootstrapped or otherwise?
We started the company with just 2 million FCFA raised form friends and relatives which was mostly used to build our Minimum Viable Product (MVP). Later on we increase our capital to 5 million FCFA in other to start our penetration of the market with the first version of the website. Now, we are looking forward to raise another 75 million FCFA (150 000$) to accelerate our penetration in the market and our establishment in other countries.
In your own view, what do you think is the biggest challenge of the FinTech industry in Africa?
I think there are 3 main challenges faced by the fintech industry in Africa right now which include: payments methods, culture and behavior of the local population and regulations.
However, these challenges are been rapidly turned out into opportunities by both companies in the sector and out of it. Some example for instance include WeCashUp with its universal mobile payment solution.
Also, regarding the behavior of the local population and the positions of the local authorities, we realized that there has been a growing enthusiasm about fintech solutions. People don’t see the fintech industry again as a threat but as an immense pool of solutions that would improve day to day lives of the population.
In 5 years, how big do you envisage Guanxi Invest?
In 5 years from now, we are aiming to breakdown all the barriers to raising funds and investment in sub-Saharan Africa and enable companies to raise more than 3 billion FCFA by 2022 via our platform. In other to achieve this, we are planning to rapidly scale our business to other countries and also add more functionalities on our platform that are going to completely changed the way crowdfunding is been done today.
How do you encourage the populace to invest their funds in companies, given how weary Africans usually are with their money?
We use many tools to encourage the local population to invest in companies, but I think what really makes a difference is the values and vision of our company. Today a new generation of Africans are arising, as some of them would say: they want to put Africa back in the game. They have this wonderful ability to inspire each other even when they end up shuting down their activities as Tonje Bakang from Afrostream demonstrated to us some weeks ago.
We are glad to be part of these rising generation and to share this common goal and unique value. Fortunately, it turns out that the local population and members of the diaspora also identify themselves to this common vision and thus identify themselves in our company.
Complete the sentence.. “The African FinTech industry would be worth……… In 10 years”.
“The African fintech industry will be worth 1 billion users in 10 years”.
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