A group of individual investors whose aim is to promote Ethiopia’s economic development and sustainability has founded Addis Ababa Angel Investors Network.
The Network that will invest in small startups and entrepreneurs in exchange for ownership equity aims to build a robust startup ecosystem in Ethiopia that addresses the existing funding gap that targets early-stage innovative startups.
The Group was founded by Shem Asefaw, a serial investor in Canada, Ethiopia & Kenya. Other founding members included Addis Alemayehu, Chairman at KAZANA Group; Henok Assefa, Founder at Precise Consult; Adam Abate, CEO at PAGA Ethiopia; Joseph Kibur, Founder and CEO at YAYA Investment; and Levi Girma, Co-Founder at Nest Ventures.
The Group has already made its first investment in Across Express, a startup working to solve freight transport and logistics problems in Ethiopia. The startup aims to modernize the freight booking and fulfillment process targeting mid and long-distance trucking.
The Network is looking for visionary startups to work with an entrepreneurial spirit with a proven product and marketable product.
“We welcome crazy ideas and big dreams and want to help achieve the next big thing in Ethiopia,” said Shem Asefaw, the Network’s Founder.
The Network is also inviting other investors to get involved, either through funding, investing, being a community partner, or being a business associate that can help provide essential expertise to early-stage startups with seed capital, guidance, and support.
Except for bank and microfinance institution loans and few venture capital entities, Ethiopia does not have an adequate funding mechanism that targets early-stage startups.
The Global Entrepreneurship Index, an annual index that measures the health of the entrepreneurship ecosystem, ranked Ethiopia at 111 out of 137 in 2019.
With a view of addressing this problem, the government is drafting a new bill that proposes the formation of the National Start-up Council, which will be tasked with overseeing resource mobilization for entrepreneurs and startups.
The Start-up Business proclamation, which is being drafted by the Ministry of Innovation & Technology in collaboration with the Jobs Creation Commission for the past year, aims to remove the impediments to entrepreneurship by easing the procedures of establishing, running, expanding, and closing down a business.
The bill also proposes the formation of a National Innovation Fund that will mobilize resources for startups from the government, as well as loans, grants, and investment from private equity groups and angel investors.
The mobilized funds will be used to incentivize startups by covering the cost of fees for the registration of intellectual property and guarantees given to the startups to get funding from financial institutions.
Ethiopia has close to 15 startup incubators and 64 accelerators such as Iceaddis, blueMoon, and X-hub Addis.