The African Catalyst

Measuring What Matters - A Bane or a Benefit

Author

CatalyzU Team
May 21, 2024

Hello African Catalyst,

Startups with a solid understanding of financial metrics are significantly more likely to secure funding from VCs. In fact, 80% of VCs prioritize startups that can demonstrate a clear grasp of their financial health. 

  • Startups that effectively manage their burn rate are 3x more likely to achieve long-term sustainability.

  • Your runway acts as a barometer of your startup’s financial resilience. Startups with a longer runway have been shown to attract 50% more investment compared to their counterparts with shorter runways.

  • Unit economics plays a pivotal role in assessing the fundamental viability of a business model. Getting it right means you’re 2.3x more likely to achieve profitability within the first few years of operation.

In the third webinar of our Startup Metrics series, we're delving into the financial health metrics that serve as the lifeblood of any growing startup - from calculating and optimizing your burn rate to understanding the concept of runway and the intricate details of unit economics.

Reserve your spot here. 

See you there,
Anthea
Head of Platform & Community

P.S. Stay tuned for the final installment in our series, focusing on Industry-Specific Metrics and learn how to interpret metrics relevant to your specific sector.

CatalyzU Venture Capital Fellowship
Cohort 3 - Fundamentals Showcase

We’re in the final stretch of our third CatalyzU Venture Capital Fellowship. With every cohort, we’ve seen an increase in the quality, experience and talent of our fellows. Our C3 cohort is no different, which is why we’re so excited to share them with you. 

Meet the group of 12 fellows in the third CatalyzU Venture Capital Fundamentals Fellowships, who graduated in May 2024. Many of them are in the market for a new role, so if you want to learn more about our talent pool, click this link.

In March, we hosted  Dolapo Morgan of Ventures Platform, Calvin Rupango of Ajim Capital, and Adeshina Adewunmi of TradeLenda when we kicked off a webinar series: Understanding VC Metrics for Startups. 

The conversation was packed with useful insights for African founders looking to build sustainable and venture-backable startups.

Five core metrics VCs  prioritize when evaluating a potential investment: 

• Growth of the startup 
Metrics to measure: gross margin and growth rates 
• Revenue
Metrics to measure: monthly revenue (not topline revenue)
• Market 
• Metrics to measure: A relatively huge market (say a billion dollar-market) 
• Technology 
Indicators: Proprietary technology and strength of technical team 
• Team 
Indicators: Technical depth and a credible track record

Vacancies

👉To find out more, email Benjamin Udokwu.

Who is Lucia Wambua?
I am a certified investment and financial analyst (CFA level 1) with experiences both in corporate finance and venture capital. My most recent engagement involved playing a role as an Investment analyst at Zephyr Acorn.

One career highlight since completing the CatalyzU fellowship?
Collaborating on a groundbreaking research project that led to the development of a new technology aimed at addressing a pressing global challenge.

What's one trend you're currently obsessed with?
The rise of impact investing, where investors prioritize both financial returns and positive social or environmental impact. It’s exciting to see the growing interest in businesses that aim to make a meaningful difference in the world while also generating profits.

Any lightbulb moments during the Fellowship?
Realizing the power of collaboration and diverse perspectives in tackling complex problems. I made an intentional commitment to work closely with industry participants from various backgrounds and gained valuable insights and solutions that I hadn’t considered before. It underscored the importance of teamwork and interdisciplinary approaches in driving meaningful change.

A project/topic/company you’re currently obsessed with?
The development of sustainable alternative protein sources, particularly plant-based and lab-grown meats. The increasing concerns about the environmental impact of traditional animal agriculture, and exploring innovative ways to produce protein sustainably have the potential to revolutionize the food industry and address pressing global challenges such as climate change and food security.

One piece of advice for incoming fellows?
Fully immerse (yourself) in the experience and embrace every opportunity for learning and growth. Take advantage of the diverse perspectives and expertise of your fellow participants, mentors, and instructors. The best part is to be open to new ideas, challenge your assumptions, and actively seek out opportunities to make meaningful contributions to projects and discussions.

Lucia is currently looking to explore new challenges. If you would like to connect with her or other excellent talents like her, fill out this form.

  • NBA Africa has opened applications for Triple-Double, a startup accelerator that will provide early-stage African startups with cash prizes and other support. Learn more here.

  • South African AI startup, Spatialedge raised $3.1 million in a recent funding round. More on the story here.

  • Kenyan Agritech startup, iProcure, enters administration due to debt woes after securing $17.2 Million in funding. Read the full story here.

  • From 26 to 27 June, FinTech Summit Africa 2024 will be taking place in Johannesburg, South Africa. More details here.

  • On 16 June, Tech in Ghana will take place in London, United Kingdom. Details here.

  • From 26 June to 29 June, TPM Events will be hosting Big Tech Africa & Middle East in Tunis, Tunisia. Details here.

  • Europe will host several African-focused tech events. For a full list, check out this post.