South Africa puts up a Six Weeks Crowdfunding Show to raise over $300k

South Africa puts up a Six Weeks Crowdfunding Show to raise over $300k

The past decade has seen crowdfunding in Africa receive a great deal of attention from startups. As an internet-based platform that uses the crowd as investors for personal, cultural or economic projects is ideally a flexible way of raising funds whether is equity-based, loan-based or reward-based. As African founders are usually plagued with financing issues due to lack economic means to foster credit, crowdfunding forms an alternative funding route.

Although the African continent is still lagging behind in this general trend toward crowdfunding (representing 0.06% of the global market and 7.6% of emerging markets), there is a growing understanding among business owners of the benefits of utilizing crowdfunding in addition to other forms of funding. In South Africa, this growing awareness was seen last week as two firms raised over $300k (R6 million) in six weeks through equity crowdfunding.

GoGetta, a recently formed equity-based crowdfunding platform that is solely dedicated to African enterprises, facilitated the fundraising. The KwaZulu-Natal-based Shuthuka Flagship Farm, which grows macadamia nuts, has raised R4 million for growth. Manufacturer of customized trailers, Trailored, based in Gauteng, raised R2.275 million. Within six weeks of listing on GoGetta, both businesses had raised their desired amount of money. GoGetta’s co-founder Sthembiso Zwane stated that equity crowdfunding is becoming popular on a global scale since it allows investors access to companies in exchange for shares. For entrepreneurs who meet certain requirements, GoGetta provides access to institutional and retail investors.

“Investors can take comfort that businesses listed on GoGetta undergo a robust due diligence process and are vetted by experienced startup and financing professionals. In fact, of the 256 businesses reviewed for a listing since January 2022, just four were approved for listing on the platform – which is a good indication of their quality,” stated Zwane.

While online crowdfunding has been recent in Africa, the practice of fundraising from family and friends for different purposes has a long history across Africa, particularly where formal banking or insurance products have been difficult to access or prohibitively expensive.

Shuthuka CEO, Warwick Blamey, says that the funding will be used to grow the business and increase exports. “GoGetta provides so much more than a platform to showcase the business and attract investors. The team has given us great advice and leveraged its extensive network. GoGetta did a lot of work behind the scenes to find the right investor fit.”

Hlanganiso Maluleke, Trailored CEO, added, “My father started this business in his garage. Together, we have driven significant growth and we are ready for the next phase of our expansion. The GoGetta team’s years of experience with startups has already added so much value in terms of sound advice and strategic direction including opening the doors for further capital.”

Overall, the crowdfunding market is still very young in Africa with huge untapped potential, it is a technique other startups can calculatedly attempt.