The most of 2020 was a perilous time for most businesses on the African continent, particularly for small and medium scale enterprises. Despite the challenging year, some businesses did not only survive the pandemic but thrived in it, rethinking business models and quickly positioning themselves to take advantage of a negative situation.
Based on a resilient 2020 and the opportunity/ potential to tap into an entire industry, and in no particular order, we take a look at the top 10 small businesses in Africa to watch out for in 2021.
Africa loses millions of dollars in potential income by exporting raw material (non-value-added commodities) such as unprocessed cocoa and coffee beans. Africa then spends millions of dollars in importing chocolate and cocoa beverages from chocolate and beverage making companies from the Americas and Europe.
Africa is thus losing out on an industry that is said to be over US$171 Billion industry by 2026. Most cocoa farmers in Africa still living in abject poverty.
Graciously, this narrative is gradually witnessing a new chapter with the establishment of Fairafric, a chocolate-making company that is focused on making made in Africa organic chocolate bars from cocoa beans harvested and processed in Ghana. FairAfric’s chocolate bars are largely targeted in Europe with a varied range of organic chocolate brands.
In 2018 alone, the business made and exported over 250,000 chocolate bars, and raised about €50,000 from investors on Kickstarter.
Thanks to the crowdfunding platform, Kickstarter, and the German development finance institution, Fairafric has established a solar-powered factory in Suhum, in the Eastern Region of Ghana. The plant has a maximum production capacity of almost 4 million chocolate bars per month.
Sendy is a Kenyan on-demand platform that connects clients to drivers and vehicles for the delivery of goods in Africa. The company had over 30,000 business customers, including bigger brand names like Unilever, Toyota, and DHL by the early months of 2020.
“Using Sendy’s technology, businesses have been able to lower the cost of logistics by up to 40% and dramatically shortened the time it takes to deliver products to their customers,” says CEO, Meshack Alloys.
The company raised US$20 million in funds to expand its reach in other countries in the West African sub-region.
mPharma is a Ghanaian startup that was founded in 2013 to improve access to medicines by providing innovative financing and inventory management solutions to hospitals, pharmacies, and patients. It is the companies mission to provide safe and affordable medicines across the African continent. The company is currently operational in 4 other African countries namely: Nigeria, Zimbabwe, and Zambia.
The company has been able to raise funds over the past years to expand its distribution channels.
In January 2019, the company raised US$12 million in funds, US$13 million in January 2020, and an additional US$17 million in May 2020. Since its inception in 2013, the company has helped over 400,000 patients gain access to quality drugs which they could otherwise not afford.
Swipe, a small business in Africa, is all about creating easy access to credit. Swipe is like having a bank account, without fees, limits, or waiting in line. You can get an account number, routing number, and credit cards within minutes. Swipe offers small businesses to better control their spending, manage payroll, among other things. The company has offices both in Ghana and Nigeria.
Sokowatch, a small business in Africa was launched in 2016 in Kenya to enable informal retailers order their products at any time via SMS or mobile app, and receive free same-day delivery to their store. According to the company’s website. “this makes it easier for shopkeepers to source goods and helps manufacturers ensure that their products are consistently available to consumers.”
The company raised US$15 million in February to expand its services to include analytics for smaller businesses in Africa as well as credit services. Sokowatch is a must-watch in 2021.
Helium Health provides healthcare providers with cutting-edge technological solutions that are dedicated to managing all aspects of the healthcare delivery system such as providing Electronic Medical Records, and electronic billing.
The company is trusted by 5,000 health professionals, who manage over 165,000 patients monthly. The company raised US$10 million to expand its reach in its current markets, Nigeria, Ghana, and Liberia. The funds raised is also to take on new territories in North and East Africa.
Flutterwave enables businesses to make and receive payments from anywhere in the world. Think of Flutterwave as Stripe for Africa. Paystack which is like Flutterwave was acquired by Stripe in October of 2020 for US$200 million.
This speaks volumes of the possibilities investors are beginning to see in the African FinTech space.
In January of 2020, Flutterwave raised US$35 million in funding.
3. Smile Identity
Smile Identity is all about ID verification via an Application Programming Interface (API). The company provides Identity (ID) verification and Know Your Customer (KYC) compliance services for Healthcare institutions, banks, telecommunication companies, among others.
This is one company to watch out for in 2021.
Small-scale farmers are constantly faced with the challenge of accessing financing from banks due to the banks wary about mismanagement of the funds and inability to pay back borrowed money. Crop2Cash founded in 2018 is a small business startup in Nigeria that is seeking to bridge that financing gap between small-scale farmers and the banks.
Cash2Crop is one of the few startups in Africa selected for the #Africa4Future 2020 cohort.
This startup company is a must-watch.
1 XY Analytics
XY Analytics is an agri-tech start-up from South Africa that focuses on herd management tool. The services enable the monitoring of health, movement, reproductive status, and location of livestock. XY Analytics is working to capture cash in what the Food and Agriculture Organization of the United Nations (FAO) says to be a projected USD 1 trillion agriculture economy in South Africa by 2030.