There are so many amazing ideas in Africa, but most times, there is no capital to fund these ideas. Entrepreneurs build solutions and develop ideas to solve problems faced by large sections of society. Fundamental problems. Before commercial capital can be brought to bear and to support these solutions and ideas, grant capital helps with proof of concept for the idea, testing and validating a business model and sustaining the entrepreneurs as they find fit (problem-solution, Product-market, Go-2-market).
One of the ways that African startups have raised funds for their operations is grant funding. Donors view the projects and decide to give these companies money because they believe that the solutions they offer will better people’s lives.
Grants, as an aspect of blended finance, enable more commercial capital to come into play after grants have de-risked investment ideas. This allows grants to be used as leverage and catalytic capital for the startups.
In this article, we take a look at twelve African startups that have raised the most funding using grants across Africa. Of the startups listed below, four provide solar energy products. In a continent where electricity is not stable, solar energy products are vital, which could explain the reason why solar energy startups are the most represented on this list. Fintech comes in second with three startups. Agritech and edutech are tied with two startups each.
The clean energy startups received their funding from organizations that are looking for sustainable renewable energy. Organizations like the Bill and Melinda Gates foundation, USAID, UNCDF, and the Shell Foundation. For the education sector, the Omidyar Network has provided funds for the two listed in this article. The Omidyar Network is a self-styled "philanthropic investment firm," composed of a foundation and an impact investment firm.
Below is the list of 12 startups that have raised the most in grant funding.
Founded in 2007 as a for-profit social enterprise, d.light manufactures and distributes award winning solar products designed to serve more than 2 billion people globally without access to reliable electricity. With operations across Africa, Asia and the Americas, d.light has impacted close to 100 million lives with its products and solar solutions. D.light first received $5M in grant funding in September of 2016 from the Shell Foundation, United States Agency for International Development (USAID), and United Nations Capital Development Fund. In 2017, d.light received an additional $5.5M from the Shell Foundation and Beyond the Grid.
M-Kopa (M for mobile, kopa is Swahili for borrow) was launched commercially in 2012 as a Kenyan solar energy company. Headquartered in Nairobi, the company has pioneered and built one of the world's most advanced Pay-As-You-Go platforms to upgrade millions of lives in East Africa (Kenya and Uganda). M-KOPA received $10M in 2014 in a debt financing round from investors: Department For International Development, Bill & Melinda Gates Foundation, and Shell Foundation.
O-Mobile Multimedia Ltd ($10M)
O-Mobile Multimedia Limited specializes in technology-based financial and agricultural services development. They secured a grant of $10 million from So.Sui.Ben Foundation, a Swiss-based non-governmental organization that promotes development in Africa. The grant was facilitated by Africunia Limited and was meant to promote the digital economy in Africa.
Sidai Africa Ltd ($5.1M)
Sidai Africa was founded in 2011 and is a social enterprise that has set up a network of centers to provide high-quality livestock services and crop inputs in rural Kenya. Sidai’s products and services are available at over 100 company-run stores. Each center provides quality crop inputs and animal husbandry and health services to farmers and pastoralists. Sidai was established in 2011, with the grant funding support of the Bill and Melinda Gates Foundation and Farm Africa, to help improve sustainable agriculture in Kenya.
Off Grid Electric ($5M)
Off Grid Electric (OGE) is a ground-breaking company based in San Francisco and Arusha, Tanzania, with the ambitious aim of powering off-grid homes across Africa with affordable, renewable energy. OGE currently provides solar systems to homes and businesses in rural communities through an innovative financial solution. OGE was given a $5M grant in 2015 by USAID. The USAID award, funded through the Development Innovation Ventures (DIV) programme, allowed Off Grid Electric to expand its services and power more Tanzanian households.
Twiga Foods ($2M)
Twiga is a mobile-based supply platform for Africa’s retail outlets, kiosks, and market stalls. The company is using a mobile-based, cashless, business-to-business (B2B) supply platform to access distribution into the millions of small and medium-sized vendors in African urban markets. Founded in 2013, Twiga is based in Nairobi, Kenya and received a $2M grant from U.S. Agency for International Development (USAID) in 2017
Bridge International Academies ($1.8M)
Bridge International Academies is an operator of scholastic academy services used to provide education to underprivileged children. Its services provide lessons based on national curricula, develop in-depth teacher training and programs, and use cutting-edge wireless technology that enables underprivileged children to get the right education, free of cost, for a brighter future. The Omidyar Network announced a $1.8 million grant to Bridge International Academies to expand its network of primary schools and educate more than a million impoverished children in Africa in 2011.
Kazang Solar ($1.6M)
Kazang Solar is Azuri Technologies’ official distribution partner in Zambia and is the largest provider of electronic vending services in Zambia. Kazang services more than 100,000 customers per day and have a nationwide footprint. Kazang Solar was awarded $1.6M from the Africa Enterprise Challenge Fund (AECF) under its Renewable Energy and Climate Adaptation Technologies (REACT) window in 2018.
African Leadership Academy ($1.5M)
African Leadership Academy (ALA) seeks to transform Africa by developing a powerful network of over 6,000 leaders who will work together to address Africa’s greatest challenges, achieve extraordinary social impact and accelerate the continent’s growth trajectory. To-date, they boast 1180 young leaders in their network. These come from at least 46 countries and have started a total of 177 ventures. The academy was founded in 2008 by Acha Leke, Chris Bradford, Fred Swaniker and Peter Mombaur. ALA first received a $1.5M grant from Omidyar Network in May 2011.
M-TIBA is a service on your mobile phone that allows you to set funds aside for healthcare. Funds stored in M-TIBA can only be used to pay for services and medication at specific healthcare facilities which carry the M-TIBA logo. Pfizer Foundation injected $1.5M in grant funding into M-TIBA in November 2015, helping to boost the service.
Zembo (Zero Emission Motorcycle Boda) is a start-up specializing in innovative and sustainable mobility solutions for Africa. Zembo’s electric motorcycle and network of solar charging stations have been revolutionizing the motorcycle taxi "boda boda" market in Uganda since 2019. In August 2019, Zembo received $1.5M in grant funding from EEP Africa, Agence de l'Environnement et de la Maîtrise de l'Énergie, French Facility for Global Environment, and Bond'innova.
Founded in 2017, Pineapple is a South African peer-to-peer insurance company with an application that allows individuals to insure their possessions simply by snapping a picture and uploading it to the mobile application. In 2019, Pineapple won the top investment award of $1.5M from Connecticut Innovations.