The Global Entrepreneurship Monitor 2019/2020 ranked Uganda as one of the most entrepreneurial countries in the world. Statistics show 30 percent of Ugandans have started businesses. In the United States of America and Japan, that figure stands at 7 per cent and 11 per cent respectively.
However, insufficient financial resources, little or no innovation, and unawareness of business principles, are some of the reasons why many Ugandan startups fail to celebrate their first birthday. We talked to Takayuki , the Chief Representative at Japan International Cooperation Agency (JICA) Uganda Office, to give us insights about the Next Innovation with Japan (NINJA) Accelerator Uganda Program and how it will address some of the current challenges in the Startup Ecosystem.
- What informed the development of the NINJA Accelerator Uganda program?
In February 2021, we launched a project dubbed the “Survey on Start-ups Ecosystem Strengthening in Republic of Uganda” to understand the common barriers to growth for startups and find out how JICA can support them based on the key findings.
After interviewing over 10 start-up hubs and over 20 start-ups in Uganda, the JICA Task Force (JICA TF) found key challenges facing the growth of the Ugandan start-up ecosystem. The results from the survey indicated; inadequate accelerator program, unfavorable government policies, insufficient financial resources, NGO and “Grantpreneurship mindset, unattractive environment for investor, complacency of startups and poor quality of business ideas. These are some of the reasons why Ugandan startups fail to grow into sustainable and impactful businesses.
Based on these findings, the JICA TF sought partnership with Ugandan start-up hubs to run a three-month pilot Accelerator Program (AP) to prove the hypotheses drawn from these findings and propose ways to address these key challenges for JICA’s future long-term support of Uganda’s start-up ecosystem.
The Next Innovation with Japan Accelerator Uganda is the first-of-its-kind accelerator in the country and it is designed particularly for businesses with market traction and earning approximately $50,000 per year in revenue, although exceptions apply. The program slated to start on September 13, 2021 will run for three months. We are anticipating 200 applications from eligible startups. These applicants will be subjected to three critical levels of assessment before qualifying for the NINJA Accelerator Uganda program.
- What assessment criteria will be considered during the selection process that Start-ups should lookout for?
All applicants for the program will undergo the level one assessment. It is at this stage that we will look at whether the startup is a registered company and it must have been in operation for at least one year. It should be at a high growth-stage of development earning approximately $50,000 in revenue and ready for the next level growth. It should have an economically viable business model and be able to demonstrate a strong promise of building a sustainable and impactful business. We will also look at whether the startup has a full-time executive team of more than two people, whether it has expanded to other countries, whether it has positive cash flows or if its sales have been growing.
Fifty startups will be selected to proceed to the second level of assessment. We will consider four key aspects including relevance and impact, feasibility, readiness and traction, and innovation. As regards relevance and impact, the start-up must have a vision and purpose clearly defined within their business model and in the feasibility test, we will tackle the business solutions offered, team composition and market traction.
To measure readiness and traction, we will look at the business profitability, sustainable business models, future growth strategy and return on investment. Finally, for the innovation aspect, we will assess how the business is using technology to provide solutions and address challenges to give it competitive advantage over other startups in the market.
The top 15 startups from level two will proceed to the final assessment level. These will participate in our demo day where they will pitch their solutions to our taskforce, implementing hubs such as The Innovation Village, Hive Colab, Outbox as well as our investment partners like AAIC. Up to five startups will be selected and enter into a three-month custom-made accelerator program. The curriculum will support the businesses to get to the desired level of growth. JICA will fund proof-of-concept for each of the five selected startups with up to US$18,000. They will also have an opportunity to raise $0.5-1 million in investment. - How will the NINJA Accelerator Uganda program provide remedies to the challenges affecting Uganda’s start-up ecosystem?
We believe in a holistic approach towards the growth of startups. The program will offer established high growth stage startups an opportunity to access mentorship from a strong network of mentors both locally and internationally. These will provide advice on important business matters such as marketing, scaling, legal issues, business strategy and partnership pitches among other things.
We have planned to avail business support services so that startups acquire effective skills in various methods of company valuation, investment packaging, investment options, pricing strategy, financial projections, deal structures and structuring optimal offers.
Startups will have the chance to connect and chat with our corporate partners to discuss their business ideas and challenges faced. This will help them build their social capital, get insights from more established businesses as well as get opportunities to talk to potential financial investors.
Whereas we will do all this, we also know Ugandan startups struggle because of financial constraints. Therefore, the top five start-ups will get up to US$18,000 proof of concept funding and opportunities to raise 0.5 – 1 million dollars in investment.
- What opportunities should startups take advantage of in these evolving economic times?
With the impact of the COVID-19 pandemic and lockdowns still amidst us, startups need to look into their current circumstances and engage larger companies, leverage technology for effective service delivery and innovate because consumer needs and behavior are certainly changing. They must think big and get creative about their products and services, and how they deliver them to the last customer.
- What are your thoughts on Uganda’s startup ecosystem?
Uganda has a very nascent ICT and startup ecosystem. This ecosystem presents a lot of opportunities for the recovery of not just the economy but for the people at the grassroots. Now that we all know the struggles these startups face, we must work together right from the startups, government, private sector, investors and customers for whom we are innovating. Let us put in place incentives for startups to thrive. Let us facilitate startups to refine their ideas, to tackle the actual market challenges, to put in place the right teams to grow their cash flows, to raise capital like other African countries and get into the right partnerships with global and local companies. With this, the sky will certainly not even be the limit.
