There was a time when every week you’d get an announcement of a fintech that just raised funding. Fintech was the hot sector attracting the bulk of African startup investment. So what do you do when you are solving a different problem, and even more so when you’re not a software company? How do you get the attention of investors and attract the funding you need to grow? That’s the story of Kubik, a company that’s turning hard-to-recycle plastic waste into low-carbon low-cost building materials for the African market.
We caught up with Kidus Asfaw the Co-founder and CEO of Kubik, a company that was recently named the 2022 African Startup of the Year. He details what it’s like fundraising for Kubik and the tools that helped make the journey a little easier. Let’s dive in:
Unless you’re working on things that are known by the broader investment community, especially outside the continent, it’s tough to be appealing or investible. In our case, we’re working on the really dirty, hard stuff. It’s not software. It’s not fintech, and it’s not Web 3, but it’s super impactful and profitable.
By working with Pariti for example, we’ve actually been able to expose ourselves to a network of investors who understand and appreciate the kind of work that needs to be done on the continent and that made us feel a little more trusted and trustable to that community. That is one thing that has made our journey toward growth a little easier.
Our fundraising journey as Kubik started when our company started, which was last year in 2021. We were very fortunate to have a community of angel investors who knew my co-founder Ndeye Penda and I. They knew the work we did prior to starting Kubik with Unicef. We used similar technology to build over 300 classrooms in Cote d'Ivoire. Understanding that impact, our ambition, and the vision that we had to transform not only our continent but the world to end challenges with plastic waste, tackle climate change and also address a massive affordability issue in the emerging markets, just made sense to them. So we were able to close our angel round quickly.
But as we started to scale, and build traction we needed more capital to grow. We really needed partners that could get us up and running fast. When we started fundraising for our seed earlier this summer, the beginning was really difficult. We thought it would be a matter of making phone calls the way we did in the past to get the money that we needed. But lo and behold it’s not how it works when you get to that level. So we engaged Pariti. Through Pariti we were able to get feedback on our deck, highlighting what investors would like to see and what we should really be emphasizing as our value-add to be an investible company. This helped us to accelerate our round. Through Pariti’s venture marketplace Grove, we were able to get in front of quality investors and this helped accelerate the close of our seed round.
We are at a place where we are very close to closing our investment round. But more importantly, we’ve been able to build meaningful relationships in the investment community through Pariti. We’ve matured enough to understand that it’s not just about raising capital but getting partners on board that can make this company strong, which could ultimately make the continent that we are trying to build for even stronger.
We wanted to get connected with investors who had similar convictions as we did with what we were doing. And asides from capital, complimentary skill-set to help with what we are building. Being a small team of 8 also played a role in our decision. We have to do a lot of things. Anything that can make our work more effective and efficient is going to be important. For example with me being responsible for fundraising, if we are able to be plugged into a community of well-vetted startups, we are also going to get a number of quality investors reaching out. This has definitely been a testament, today we’ve been able to get really good investor engagement through Pariti and that has made our journey to building meaningful investment relationships possible.
We did this because we understood that if we wanted to get high-quality talent in Africa it would be much more efficient to work with people who understood that market already. For a startup, asides from experience it’s important that the people you bring on board have a conviction about what you’re doing and understand the messiness of building a startup. Pariti Talent understands this and was helpful for us.
Note: Pariti has a growing network of thousands of professionals and start-up operators in Africa that help refer quality talent to companies.
As a founder, it’s really important to understand that it’s not going to be a smooth ride. You have a company that you believe in, but you still have to make others believe in it as well. In our case, we of course knew what we had done in the past and we had a lot of confidence about what we could achieve, but there was a process of explaining to people why this is the business that would transform the real estate and recycling market. So one of the pieces of advice that I have for African founders that are starting a company now is: Have north star, remember why you are doing this. This is the only thing that would guide you through this journey.
Always remind yourself that what you are building today should be something that you would buy, if you are not a customer of your own product or your own service maybe there are some things that you need to change.
Now, it would be very challenging when you are talking to investors who would be naturally skeptical about whether this is the business they are going to want to invest in. What you should keep in your mind is that there is meaning in your work, and you should be convinced about why they should be your investor as well. The best way to do that is to have the right types of matches, it’s being in front of the right types of people that have a similar conviction, similar vision, and complementary skills they can bring to the table to make your company better. We are very fortunate to have worked with Pariti to get that type of opportunity. But as Africans, we should feel that if there is a continent worth building, it should be ours and it should be done by us.
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