Small tech start-ups struggling to break even in Africa

by Trust Matsilele 0

African tech start-ups are struggling to break even due to big players and capital demands, according to Alpesh Patel, Founder and Chief Executive of Mi-Fone.

Mi-Fone is one of Africa’s first mobile devices brands.

Patel told CNBC Africa that huge capital demands was one of the challenges that start-ups face.

“We have been through a set of challenges as we were never funded by external parties when we started. We have been building our brand with our own money,” he said.

Africa’s mobile space has seen a boom in recent years and this has been spurred by need for speed.

“Increasing affordability of smartphones comes along with faster transmission speeds have led to Africa’s digital revolution,” added Patel.

Patel said start-ups were also competing with huge companies in the digital space adding, this affected their outlook. 

“We are fighting big giants in the sector like Huawei and Samsung in a business that requires capital and volume,” he warned.

“It has been very challenging for us especially in the last two years where we have taken some knock, but we are still surviving. We are coming back bigger, better and stronger.”

Patel said Mi-Fone was a distinctly African brand that was should get support from the government.

“Mi-Phone is a truly African mobile brand, as it has 100 percent African ownership,” he said.

“We have Pan Africa shareholder base with some shareholders in Kenya, South Africa and Nigeria.”

Patel warned prospective start-ups that the future in the industry was tough.

He also welcomed the entry of Chinese tech specialists in the mobile space saying Africa was poised to benefit from the relationship with China.

Patel added that China offers the much required smartphones at a lower price.

“The Chinese have created a fantastic ecosystem around mobile phones; it can’t be matched with anyone else in the world.”