Rwanda is a landlocked country in the Great Rift Valley region of Eastern Africa. It has a population of 12.6m with 1m of them living in the capital, Kigali. According to Data Reportal 2021, it has 4.12m internet users or just 31.4% of the population. 79% of Rwandans own mobile phones, but only 1.6m own smartphones according to the Ministry of ICT.
Rwanda has a GDP of $10bn. Its economy has been growing steadily since the end of the 1994 Genocide and has averaged 7% per annum growth over the last decade. Rwanda ranks 38th (2nd in Africa) on the World Bank’s Ease of Doing Business Report. This is because of a deliberate and consistent effort from the Paul Kagame-led government over the last 20 years.
In Rwanda, it is possible to register a business in less than a day, usually, just 6 hours, and the process is done completely online. The government also has fiscal and non-fiscal incentives that attract entrepreneurship, for example, local and foreign investors are exempted from paying medium capital requirements for entry while SMEs do not pay for a trading license tax within their first two years of business. Rwanda also has low levels of corruption and crime.
There are a variety of stakeholders in Rwanda that offer financial and non-financial support like mentoring, workspace, and business support to startups. These include 250 Startups which was established by the ICT Chamber of Rwanda to promote entrepreneurship. It has a 6-month acceleration program where funding of the participating startups is accelerated. Another stakeholder is Impact Hub Kigali, a global network of entrepreneurs that works with companies at all stages.
Knowledge Lab (KLab) is a hub where students, fresh graduates, entrepreneurs, and innovators go to develop their ideas and projects into businesses. Westerwelle Startup Haus Kigali is another hub that offers co-working space and various activities like networking events, private offices, advisory services, and networking opportunities.
Other hubs in Rwanda are Norrsken Kigali, an office space founded by the Norrsken Foundation, where startups and VCs can work and connect, and Iris Hub, a hub that runs the Iris accelerator which is a venture-backed and sponsored accelerator.
Alphamundi headlines the list of investors that are present in Rwanda. It is an impact investing firm that offers debt and equity financing to SMEs at an inflection point. It pumps $250,000 - $2m into startups with annual revenues of $200,000 - $10m. Another active investor is Factor E Ventures which is a seed-stage impact investor providing capital and hands-on support to early-stage technology companies in emerging markets.
Zephyr Acorn is also an investor in Rwanda that invests in early-stage companies with innovative concepts. Its focus is on companies that are digitizing traditional business models. Vilcap Investments invests in early-stage companies that demonstrate environmental impact while Energy Access Ventures provides equity investments ranging from $100,000 - $8m in startups that solve the lack of electrification in the region.
The Most Funded Startups in Rwanda
The 10 most funded startups in Rwanda have raised a combined $28m across 27 deals which is an average of just over $1m per deal. The most common round of financing is the Seed round with 9 deals followed by Series A, Grants, and Pre-Seed with 3 deals each. The most funded round of financing is Series B with $8m raised across two deals which accounts for 29% of the total amount raised. Debt financing ($6m), Seed ($4.4m), and Series A ($3.1m) follow closely.
Only the Automotive sector has two startups (Ampersand Electric Motorcycle and Rwanda Motorcycle Company) in the top 10. Agriculture, utilities and telecommunication services, energy, renewables and environment, financial services, information technology, and education technology have one startup each in the top 10. Here is the list of the most funded startups in Kenya.
Jibu is a startup that equips entrepreneurs in emerging markets to create affordable access to drinking water through a franchise model. Headquartered in Rwanda, Jibu operates in 7 countries (Rwanda, Kenya, Uganda, DRC, Tanzania, Zambia, and Burundi) has 122 franchisees, and has distributed over 174m liters of water using its over 2,100 retail points.
Jibu has raised funding twice. It raised a $1.1m Series A in January 2015 from undisclosed sources. This was followed by a $7m Series B in February 2018. Investors in this round included Asia Africa Investment and Consulting The Danone Communications Mutual Fund, Stone Family Foundation, Segal Family Foundation, NRD Capital Management, and Conrad. N, JHilton Foundation.
2.Uzima Chicken Ltd ($6,000,000)
Uzima Chicken is a poultry producer that supplies day-old chicks to small, independent distributors who rear the birds for 6-8 weeks then sell them to smallholder farmers. The chickens are dual-purpose so they are ideal for rearing outdoors for both meat and eggs. Uzima currently supplies 59,000 households.
Uzima raised $3m in June 2017 from AgDevCo in a debt financing round. The same investor funded a second debt financing round of $3m in April 2021.
3.Ampersand Electric Motorcycles ($4,405,000)
Ampersand Electric Motors assembles and finances electric motorcycles that are cheaper, cleaner and better performing than the 5m petrol motorcycle taxis currently operating in East Africa. Ampersand Motorcycles produce 75% less carbon than petrol motorcycles and produce zero pipe emissions. It also builds and operates a network of battery swap stations that charge batteries faster than it takes to refuel a tank with petrol.
Ampersand raised a seed round of $8,400 in February 2014 from Startupbootcamp and Smart Technology and Energy Berlin. It followed this with a pre-seed round of $37,000 in May 2016 from undisclosed investors. Further funding followed in June 2016 with Factor E Ventures investing $20,000 in a pre-seed. It invested a further $500,000 in April 2018 in a seed round. In July 2018, the Department for International Development invested $125,000 in Ampersand through a grant. FONERWA also gave Ampersand a $215,000 grant in November 2018. Finally, in an undisclosed round, Ecosystem Integrity Fund invested $3.5m in April 2021.
4.Off Grid Box ($3,705,000)
Offgrid Box is a modular and compact unit that provides renewable energy and treated water in off-the-grid areas. The box is the size of a small shed and usually just a section of a small shipping container. It has a scaffold on top where solar panels are attached. Inside, it has the necessary equipment for storing electricity and distributing it to rechargeable batteries and lights plus a water reservoir and purifier. It costs $15,000 to build one box and $10,000 to deliver it.
The box is usually located near a power source. People come to the box to recharge their batteries and get clean water, paying $0.18 each time. For a small down payment, one can also get a power bank, 3 LED Lights, a phone charging set and a 5-liter jerry can.
Offgrid Box has raised funding 5 times. The first round was a $100,000 pre-seed in February 2017 from Techstars, RightSide Capital Management, and Techstars Boston Accelerator. It also received a $705,000 Angel round in May 2017 from Semyon Dukach, Ty Danco, Ground Squirrel Ventures, Troy Billet, Rob Stevens, Warren Katz, Mike Zelnick, and Marco Cecchini. It received a $100,000 grant in November 2017 from Mass Challenge. Good Energies, DOEN Participaties and EEP Africa invested $1.2m in Offgrid’s seed round in October 2018. Another seed round of $1.6m followed in December 2018 from Doen Foundation, Good Energies Foundation, and Banque Populaire du Rwanda.
Kasha is an eCommerce startup that sells women’s health and personal care products in Rwanda and Kenya. The company was started after its founder, Joanna Bischel, discovered that women lacked access to safe, high quality, and affordable health and personal care products as well as information surrounding those products. It has sold over 1m products to over 13,000 unique visitors of which 63% are low-income customers.
The Optimizer Foundation invested $150,000 in Kasha’s seed round in November 2018 before VestedWorld invested an undisclosed amount in its Pre-Series A in February 2019. It raised two $1m Series A in April 2020 from FinnFund and in September 2020 from the United States International Development Finance Corporation. SwedFund International also invested $1m in Kasha’s Series B in November 20202
Inyenyeri is a startup that provides high-tech gasifying stoves to customers that buy their fuel pellets. It sustains itself by selling fuel pellets at a rate that undercuts competitors’ prices. These pellets are produced using crowdsourced biomass. Inynyeri introduced a pilot phase in mid-2012 in 50 households and reached 3,000 households by the end of that year. It reached 25,000 households by the end of 2019 after building a new factory. OikoCredit invested $1.2m in Inyenyeri a Convertible Note Round in May 2018.
BeneFactors is a factoring company that provides working capital to businesses against confirmed invoices from reputable buyers. Factoring is a financial service where future payments from buyers are sold to a third party, the factor for cash. It operates only in Rwanda but plans to cover the whole of East Africa by 2023. BeneFactors emerged in first place at 2018 Seedstars Kigali. It raised $150,000 in a seed round in September 2018 from undisclosed investors. It raised another $400,000 seed round in December 2018 from Seedstars, Silverback Capital, and NISK Capital.
ARED is a B2B deep tech company that uses solar technology to bridge the digital gap. It is known for its “Smart business in a Box” solar-powered kiosks. These kiosks known as Shriki Hubs have Wi-fi, intranet solutions for offline users, and phone charging services. They are run by women and people with disabilities using a micro franchise business model. It raised a $250,000 equity funding round in July 2018 from undisclosed investors.
9.Rwanda Motorcycle Company ($150,000)
Rwanda Motorcycle Company is a startup that produces assembled motorcycles in Rwanda. It was founded to provide a solution to the growing issue of people’s transportation in Kigali and other East African cities. It raised $150,000 in its seed round in November 2018 from undisclosed investors.
10.BAG Innovation ($150,000)
BAG Innovation is a digital platform that applies gamification to offer real-time access to experience-based learning for university students. It delivers interactive assessments from employers so that students can build up a skills profile and personalized career guidance from year 1 of their studies up to graduation. It raised $150,000 in a seed round in October 2019 from undisclosed investors.
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