A Recollection Of The African Startups That Bowed Out In 2021
As far as big moments go in African tech, the year 2021 will certainly go down in history. It was a year of many unprecedented feats – from huge funding deals in previously ‘quiet’ sectors to interesting acquisitions and the emergence of more tech unicorns than in all other years combined.
This year, African startups are on track to rip the record books in terms of funding with well over USD 4 B raised during this calendar year alone. It’s yet another testament to the remarkable growth on show in the ecosystem, and this is made even more impressive by the fact that economic uncertainties continue to linger amid the global pandemic.
However, while it’s been a breakthrough year for many founders, investors, and startups in the local tech scene, there have been a few failures along the way.
A famously infamous statistic has it that 90 percent of startups fail and 2021 did weigh in on that statistic with quite a number of shuttered startups globally – from Houseparty and Katerra to Loon and Chanje.
Back home in Africa, quite a few startups fell in 2021. Surprisingly, however, in spite of the fact that the global pandemic is still raging on, 2021 hasn’t seen as many high-profile losses in the startup world as the year prior. Whether this is down to the capital influx that kept many heads above water in 2021 or the fact that there was no hiding place in the previous year given it was the onset of the pandemic is up for debate. Now, a recollection of the African startups that bowed out in 2021;
HouseME
South African prop-tech startup HouseME shut down after failing to raise a funding round necessitated by the negative impact of the COVID-19 pandemic on its operations. Formed in 2015 and available to the public by the end of 2016, HouseME was a digital platform that connected prospective tenants to landlords with full automation of the letting agency process, and fair and transparent rental pricing – all for a fraction of traditional fees.
The startup had taken its total secured investment to USD 3 M with a funding round in late-2019 and took on some further capital in September of last year. Chief Executive Officer (CEO), Ben Shaw, had said at the time the new funding meant HouseME, which claimed to have over 150,000 users, was well-positioned to capitalise on the surge of interest in online platforms and had benefited from the switch to online caused by COVID-19.
But it turns out that wasn’t the case with HouseME closing down its business in the early parts of the year while awaiting the appointment of a liquidator.
KuBitX
Back in 2018, three ambitious entrepreneurs from Ghana, Angola, and Nigeria decided to set up a trading platform offering digital currencies services. These entrepreneurs were Eric Annan, Alex Amadeu, and Victor Akoma-Philips.
One of them reportedly resigned from a high-paying job at Dell in Canada. The entrepreneurs used their savings to set up the company. Their resources were initially limited and they had to be very resourceful.
Nonetheless, money started streaming in from friends, angel investors, and relatives. They created a token generation event, which is a crowdfunding strategy for cryptocurrency startups. The entrepreneurs were able to raise USD 600 K via the token sale and they named their company KuBitX. They would later raise more than USD 1 M.
In the next three years after they acquired the funds, the firm hopped from one ambitious project to the next: it started as a crypto exchange and then a blockchain payments network to be used in the whole African continent. Ultimately, those efforts yielded scarce success and the startup was shuttered in May after the CEO walked away.
MallforAfrica
There are indications that MallforAfrica, an Africa-focused e-commerce startup, has closed shop.
The difficulties that make it almost impossible for people in Africa to shop on global eCommerce platforms is the problem that Chris Folayan, MallforAfrica’s CEO and Founder, sought to address when he started the company to bridge the gap between African shoppers and these international e-commerce platforms.
Aided by an influx of Africans to the Internet, the startup grew steadily, gaining attention and support from investors and international media powerhouses like CNN.
However, the company has reportedly shut down its operations with talks of a rebranding being hinted at. According to Folayan, the company was shuttered due to the devaluation of the naira and some policies pushed by local financial regulators.
At the time the closure of MallforAfrica was reported, it was mentioned that orders are no longer being accepted on the platform, though it was claimed that orders placed before the shutdown would still be delivered, albeit over a longer timeline due to the staff cuts that came with the closure of the platform.
Featured Image Courtesy: Times of India
