Traditional venture capital players often overlook businesses led by women and people of colour. Entrepreneurs who identify in either or both of these groups cannot wait for the system to right itself. They find ways to get the capital that they need to make their vision a reality. Fatima Dicko, the founder and CEO of Jetpack, recently tweeted, “Here’s an idea: VC is initially not the only way. After pitching to 100+ VC’s with little luck, I launched a crowdfunding campaign on @joinrepublic that raised $250k+ from 800+ ppl that allowed me to keep building the prototype, gain initial traction, then raise $1.5M. Reflecting… ”Crowdfunding is filling the gap and benefitting from the opportunity left by venture capital.
Despite having graduated from prestigious programs like Techstars and the Google Launchpad Accelerator and winning Slush, Eversend, “a neobank for Africans, anywhere in the world,” was not getting the traction with venture capitalists that they needed to grow their business. The company was founded by Stone Atwine and Ronald Kasendwa, two Ugandan men, and Emma Smith, a white American woman. Kylie Naughton, the Director of Marketing at Eversend shared, ”[Investors] weren’t familiar with the African market and that was the reason that they weren’t investing. That is something we were hearing over and over again. And you can’t really blame the VCs, because it’s true. Their portfolio companies are all American or European and they themselves are European and American.” Then Eversend launched a crowdfunding campaign on the European platform Seedrs and their fundraising success did a complete turnaround almost overnight.
We’d be missing half the story if we just focused on Eversend’s challenges with venture capital. They started a crowdfunding campaign because they wanted to raise money from their customers. Eversend exists to bring more Africans into the formal financial market. Their pitch often starts with the fact that 66% of Africans are unbanked. As a fintech-focused on financial inclusion, they gave their customers the opportunity to buy into a high-growth startup for as little as €10.
Once they opened up the opportunity to investors who really understood the pain points of the moving money within, to, and from Africa, there was no turning back. They hit their goal of raising €550,000 in 2 days. By June 17, they had raised over 134% of their goal and still have over two weeks to raise.
This money came from 731 investors meaning the average investment size was around €1000. According to Naughton, only 6 people invested over €10,000. “The kinds of people who are investing in this platform come from all kinds of backgrounds. And I think the average person is looking at more factors outside of just a financial return. They are looking for diversity, social good, and limiting environmental harm,” said Naughton. Even though they overshot their goal, Eversend does not plan to strictly limit the number of people who can participate in the round. They will keep the campaign open until it expires or they hit €1M.