Kubik, an Ethiopian startup that recycles plastic faces funding challenge. The startup has won many laurels in the past due to its potentials.
Kubik takes in bundles of discarded plastic and sorts them into piles. Selected plastics are mixed, melted and combined with additives, and then moulded into the desired shape.
The result of this is the construction of a pilot project in Addis Ababa, the Ethiopian capital. Lack of funds has greatly hindered their activities as many equipments which are necessary for operations are missing from the site.
Recounting his struggles, Kidus Asfaw, 36, said he battled to get seed money for his company. He received a lot of knock-backs from wary investors, he says, before catching a break. The Ethiopian previously worked for Google, the World Bank and UNICEF after studying in the United States.
Startups in Africa face myriad of hurdles, from laws and regulations and lack of infrastructure to a fragmented continental market. But funding, in a continent that lacks intrepid individual investors to provide support, is a persistent and major headache.
According to Sergio Pimenta, vice president for Africa at the Societe Financiere Internationale (SFI), a private-sector unit of the World Bank “there are very few ‘business angels’ in Africa.
Lamenting the absence of risk capital in Africa, Pimenta said that Out of $415 billion in risk capital deployed around the world, just over one percent — $5.4 billion — goes to Africa. And of this sum, 80 percent goes to just four countries: South Africa, Kenya, Nigeria and Egypt.
Founder of Nigerian insurance startup, Curacel, and a fellow winner of the AfricaTech award while recounting his struggles said he floundered when he first tried to raise capital a few years ago. According to him, the bane of contention is that Africa is suffering from bias of western investors, Without timely funding, many African startups withered, he warned.