Venture Capital: The Togolese Startup Financing Trend in 2022

(Togo First) – After raising $5.5 million in 2021, two deals completed exclusively by Gozem, the Togolese startup ecosystem has mobilized at least $10.1 million in 2022.

The main beneficiary of venture capital funds earmarked for Togo since 2020, Gozem managed to sign a financing agreement worth US$10 million in the form of a loan with the IFC, the arm of the World Bank that supports the private sector. A vote of confidence for the young shoot launched at the end of 2018 in Lomé, which, through this facility, intends to finance the acquisition of 6,000 motorcycles for its drivers in Togo and Benin.

Selected for the final of the International Afri-plastic Challenge Award, supported in particular by the Canadian government, the Green Industry Plast (GIP-Togo) of the young Togolese eco-entrepreneur Bemah Gado, obtained a scholarship estimated at more than 100 $ 000 during the year. Since 2019, GIP-Togo, which in its start-up phase was funded by FAEIJ, claims to indirectly support 5,000 people in Lomé, Aného and Tabligbo, in their various waste collection, sorting and recycling chains.

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If we add to this total, the US$20 million raised by M Auto, a company specializing in the assembly and sale of electric motorcycles, which first set up shop in Benin and Togo, amounts to more than US$30.1 million in business identified to start -ups, having its main operational base in Lomé.

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A young ecosystem under construction in an Africa in progress

Overall, African startups raised $4.85 billion in 2022, up from 2021. This funding is concentrated among four countries, the Big Four, made up of Nigeria, Kenya, Egypt and South Africa. Other countries such as Ghana, Algeria, Senegal or Tunisia were able to raise more than $100 million in funding from venture capitalists during the year.

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The fundraising dynamic in two of these countries (Senegal and Algeria) is driven by start-ups with Togo as one of the main potential targets. This is the case of fintech Wave in Senegal, which had already shown its Togolese ambitions for 2020-2021, even opening an office in Lomé for a few months before cutting back.

This is also the case for the Algerian urban mobility start-up Yassir, which raised US$ 150 million in November 2022. To set sail for the Togolese capital, where Gozem reigns supreme, the hitchhiking start-up was launched in the middle of the year in search of a CEO, before compromising on their short-term ambitions.

If it is one of the few ecosystems whose name appears on the venture capital scene, “the startup ecosystem in Togo is still young, under construction”concludes Founders’ Guide to fundraising in Togo, a report on the sector, published later in the year.

“The equity financing of small companies or start-ups, even with high potential, is still very underdeveloped, no doubt due to a perception of very high accumulation of risks: political, business, legal, fiscal… innovative entrepreneurship, which would pave the way. Funds interested in the country have no business flow”analyzed this document produced by Energy Generation, in partnership with the Make-IT in Africa program of GIZ and Briter Bridges.

The study estimated just $5.9 million in funds raised between 2015 and 2022 by Togolese start-ups, excluding debt and M Auto. Most of these resources were captured by Gozem, which is in urban mobility.

E. Kakpo carriage

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