Founders Factory Africa: Partnerships are key to building successful startups

Pan-African early-stage investor Founders Factory Africa (FFA) aims to propel the continent's most exciting tech entrepreneurs through funding, guidance and putting their over 60 ventures in touch with the right partners so their businesses can thrive.

Launched in 2018, FFA's portfolio now spans ten countries in East, West, North and Southern Africa.

FFA's portfolio extends to fintech, healthtech, agritech and more, with startups like Envisionit Deep AI, Zindi and Foodlocker on its books.

The startup accelerator invests up to US$250,000 in ventures at idea, pre-seed and seed stages, and also invests $150,000 in non-dilutive funds into all its portfolio companies. This capital is designed to give founders an additional runway to pursue growth and catalyze other investors.

Connecting Africa spoke to Ayotunde Aladejana, global head of partnerships at FFA, and Wangui Kahumbi, who takes care of commercial partnerships, about how having the right partnerships is key to the success of its ventures.

They said that partnerships also help FFA scale its model to keep serving founders across the African tech ecosystem.

Partnering right

A key part of FFA's success formula is finding the right way to create positive collaborations within the African startup ecosystem.

"The mark of a positive collaboration is if it turns out to be a win-win for both sides, and both parties can achieve their goals," said Aladejana.

FFA believes it is important to really think about what a startup wants out of a partnership – whether it's access to a new network, access to potential investors, strategic collaboration or help with distribution.

Currently, FFA's business is set up for collaborations between companies, startups and investors to bridge the gap between established companies and entrepreneurial initiatives.

Investors will contact FFA to bring startups to investor showcases and corporate partners will ask FFA to recommend startups that can solve specific issues for them.

Ayotunde Aladejana, global head of partnerships at Founders Factory Africa. (Source: Founders Factory Africa)

FFA's power also lies in contextualizing a specific strategy for each region to ensure that strategies are aligned.

"There is always a lot more that we can do. Collaboration is becoming more and more known in this space, but there is more that can be done, especially with corporates – opening their minds up as to what problems startups can solve and how they can work together," said Kahumbi.

"The [startup] space is too big, and we cannot revolutionize and digitize Africa without the support of other ecosystem players," she added.

Bridging the gaps through empathy

One of FFA's niches lies in being a bridge between corporates and startups. Initially, startups would reach out for corporate partnerships, but more recently there has been an increase in corporates reaching out to FFA for an innovation partner.

The accelerator's role marries two separate entities that would otherwise have never been in the same room. It facilitates introductions, being a network aggregator that can connect the dots and ensure that everyone is getting value from the deal, and from FFA.

Its success is attributed to FFA's internal team culture and the notion of empathy in business – something that is often overlooked in the venture capital (VC) space.

"Being able to empathize, to understand what everyone else does and what makes them do their job better and achieve their goals is just as important in the FFA office as in external partnerships," said Kahumbi.

Wangui Kahumbi, commercial partnerships at Founders Factory Africa. (Source: Founders Factory Africa)

When brokering a large partnership, FFA believes it is important to consider how a certain venture leverages a solution, and how smaller companies can help managers at corporations achieve specific goals.

"It's important to go out into the world and talk to as many people as possible – as you engage with people you understand different perspectives and a better understanding of people's needs," explained Aladejana.

"If you're scrolling through LinkedIn – you might think this could be interesting for someone, building that layout of empathy through just engaging and talking to as many people as possible," he added.

The current macroeconomic situation has been tough for startup funding, and FFA is no exception. It emphasizes focusing on building businesses that are solving major problems, and who understand the problems they are trying to solve with the right product-market fit as well as truly engaging with customers.

"As long as we are building businesses with the right impact story and right impact objective, building products that customers love and use, with the right value propositions – as long as we continue to do that in our own little corner and continue to support business, we can also continue to extend that to the wider ecosystem," Aladejana said.

Despite the tough macroeconomic environment, he believes FFA can gain traction and continue to focus on the right things.

In August 2023, FFA raised US$114 million in additional funding from the Mastercard Foundation and J&J Impact Ventures, providing FFA with an extra pool of funding to help support ventures.

The Founders Factory Africa global team. (Source: Founders Factory Africa)

Aladejana highlighted how FFA helps de-risk ventures through equity and debt investment.

FFA has five key impact priorities so when money is invested it supports: dignified and fulfilling work livelihoods; improved healthcare access and outcomes; enhanced climate adaptation and resilience; enhanced financial inclusion; and enabling entrepreneurship and what it calls "business hood" which is more about cultivating an inclusive environment beyond just the individual.

Future steps

Going forward, FFA's main goals include diversifying its portfolio into logistics, e-commerce, mobility and climate tech, while still keeping a focus on fintech, healthtech and agritech.

The accelerator is also looking to expand geographically, having made its first investment in Egypt in 2023, and aims to grow further into Francophone Africa.

Aladejana said that FFA's goal over the next five years is to invest in 21 businesses each year – scale those ventures and continue to support its portfolio businesses, while searching for positive partnerships.

"That's how we want to be felt on the African continent – achieving those things, creating jobs, ensuring people have access to healthcare and improving climate resilience," he said.

"We strongly believe that entrepreneurship is going to play a key role in how the African continent is going to grow and develop over the next years and decade, we want to be a key part of that," Aladejana concluded.

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— Maeve de Bordóns Álvarez, correspondent, special to Connecting Africa