Accelerators backed by or focused on corporates are the way of the future on the continent given the mutual benefits to be had.
That is the view of Kofo Sanusi, chief operating officer (COO) of Founders Factory Africa, who was speaking on the latest episode of Disrupt podcast.
Founders Factory, which originally launched in London in 2015 and has already built 70 startups, launched African operations in Johannesburg in 2018, from where it plans to design, build and scale 140 disruptive tech startups across Africa over the next five years.
The company brought its model to Africa in partnership with Standard Bank, which made a multi-million dollar investment into Founders Factory Africa, and the pair made their first investments in April of last year. It has since secured backing from Netcare, which operates South Africa’s largest hospital network, to provide a platform for entrepreneurs to build and scale e-health startups across Africa.
Sanusi said 15 startups had so far gone through its Scale programmes, and it had launched two companies via its Build programme.
“We help these entrepreneurs really understand how to scale their businesses. We are putting in place repeatable methodologies – everything from product thinking to improving their growth capability, or their partnership strategy,” she said.
“We’ve also helped our startups secure large partnerships; pilots that will hopefully convert to commercial agreements.”
Corporate partnerships are central to the accelerator’s offering.
“Just for a startup to be able to accelerate access to the likes of Standard Bank is so important,” said Sanusi.
There are many benefits startups can gain from corporates, not least the ability to access expertise and work through regulations, but also access to customers.
“They open their doors and their channels to our startups,” said Sanusi.
Meanwhile, there are also a number of benefits to corporations.
“Just being able to have visibility to these small businesses that are incredibly fast and nimble in the way that they work, and being able to access what is coming onto the market, and being able to partner with them,” Sanusi said.
“Sometimes startups are able to reach that corporations can’t, and we’ve certainly seen that with some of our businesses, and the alignment has been really important.”
Founders Factory also uses corporate insights on pain points to inform the type of businesses that it puts together via its Build programme. More and more accelerators are becoming corporate-focused, and Sanusi thinks this will continue.
“Corporate support is so important for startups, in terms of the access and reach across the continent that these companies have. The sheer fact that these businesses have existed for centuries in some cases means a startup just does not have that same leverage,” she said.
“Corporates are key, and the collaboration between corporates and startups is what is really going to drive development on the continent.”
The impact of COVID-19 on startup-corporate collaboration is yet to be seen, with corporate budgets likely to be negatively affected by the pandemic. Sanusi said, however, that she did not expect engagement, at least in the long-term, to decline.
“I wouldn’t be surprised if in the short term corporates were playing their cards closer to their chests in terms of the level of engagement as a result of COVID. But I think corporates that have been engaged have seen the tremendous value that it adds to their business. So whilst one might expect to see a slowdown, the desire to engage with startups is still there,” she said.