The growing demand for talent from Africa, and specifically from Nigeria, poses a huge opportunity for the evolution of venture capital funding towards start-ups. Start-ups are an innovative evolution of venture capital financing. Traditionally, venture capital is provided simply to develop a business concept or start-up idea. A business builder, on the other hand, invests their resources, infrastructure, networks, experience, and capital to equip the founding teams and bring their vision from idea to reality, and then maintain said investments for cash flows or output. .
Since start-ups require much less start-up capital, “the concept is ideal for taking advantage of the huge technology start-up opportunity in Africa’s innovative but capital-strapped frontier and emerging markets,” says Adebayo Adewolu, Director interim executive of Trium Limited. Starting companies also “presents significantly less risk, both for investors and for the start-ups themselves,” adds Adewolu.
Trium, an SEC-registered venture capital fund manager and leader in digital start-ups, was built on a vision to find and solve big challenges in emerging and frontier markets in Africa, harnessing the transformative power of technology-enabled by smart capital and experience. The start-up model provides experienced business builders to work alongside the founding entrepreneurs of each startup, “managing the basics of operations, systems, human and legal resources, and compliance,” says Adewolu. This frees entrepreneurs from having to deal with what they are not good at, are not trained to do, or do not have the resources to manage.
With the business builder managing the basics and the business, “Entrepreneurs are free to maximize their innovative value to disrupt and create, while experienced business builders, backed by established financial and management networks, build and scale winning business operations.” Adewolu explains. In addition to requiring less up-front capital and ensuring higher rates of initial success, the start-up model also “sees concepts coming to market and reaching maturity faster while achieving the scale and value required for cash-generating businesses.” adds Adewolu.
Trium, for example, as part of the larger Ecosystem, can draw on a wide range of experienced investment, capital, asset, risk and insurance managers, as well as experienced business builders supported by world-class legal and compliance teams. “Overnight, home-based technology concepts are suddenly fortified with the resources and expertise of a world-class global financial services business,says Adewolu.
The growth implications of applying this type of advantage to African start-ups are enormous, especially as they become viable technology champions at the national, regional and global levels. In exchange for giving start-ups such a big advantage, the founding teams give up a larger share of the companies. As such, investors and founding teams are aligned on what each party brings to the table and can jointly achieve larger equity stakes and earnings as new companies grow. This alignment also “helps both parties to focus on joint capabilities that support generating higher returns for companies, over a comparatively shorter period of time,” he adds.
Trium’s start-up successes to date include supporting a paid start-up from concept to approval in principle, and now, a full license in just 18 months. This innovative payment gateway business is already operating in Nigeria and is currently contemplating cross-border expansion. Trium is also currently helping to build a working capital financing startup, which is set to launch in Nigeria in Q4 2022. The platform solves liquidity challenges for SMEs by:
- Creation of a virtual market for corporate invoices.
- Suppliers to large companies, which typically take 30-60 days to pay, list their pending invoices on the platform along with proof of authenticity and payment commitment.
- Licensed third-party financiers then bid to provide immediate liquidity to bill holders at a nominal fee.
The ingenious concept is solving the supply chain trust challenge of emerging markets in Africa. “We hope that this extends to all
With 19 target markets, this transformative business build will have a notable impact on the financial health and agility of African SMEs,” says Adewolu.
While Trium is currently funded by a major family office, the startup builder is also creating a funding club. This is expected to widen the circle of risk management venture opportunities for African capital. Trium’s immediate call is for African companies to “bring us your biggest problems and challenges and enable us to unlock the power of technology and capital to solve Africa’s future growth”, concludes Adewolu.
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