The year 2020 has posed many tough times for people and businesses have not been left out of the many challenges that the COVID-19 ridden year has brought to the table.
In all these, some startups have been able to weather the storm, putting in all efforts to continue scaling.
A good number of these startups attracted Venture Capital (VC) investment while others are almost achieving the same feat.
Going forward into 2021, it is necessary to take an understudy of what enabled these startups to secure funding from these investors, not forgetting that in times like this, investors are also looking for ways to cut down their financial activities.
With this in mind, it would take a few extra qualities for startups to secure funding.
Thus if these qualities are noted, then they will be in high demand moving forward to 2021by investors.
It must get noted that these qualities definitely vary regarding different markets, however, there is always a common ground for all emerging and existing markets.
Adaptability
It appears to be true that investors would be highly interested in firms that survive out 2020, however, their interest would further increase in the ones that not only thrived but adapted in 2020.
For the startup ecosystem, pivoting has always been the name of the game, however, for the year 2020, pivoting has been a defining factor for how well they can survive.
For instance, YeboFresh in South Africa made a successful adaptation to the COVID-19 challenge.
The startup which commenced operation as a township-based e-commerce grocery delivery company, developed into a solution player in grocery to a larger market.
In Nigeria, PlentyWaka, a ride-hailing startup that was barely 6 months into operation before the pandemic had to make swift changes to its operation, adapting to the pandemic while still serving its users.
Solving real-world problems
Before 2020, there was the emergence of another wave of “tech bubble”, such that investors were financing startups solving what appears to be non-existent challenges in developed markets.
Founders on the African startup scene appear not to be immune from this line of thought, even when the continent is filled with visible challenges that technology can deal with.
The pandemic ridden year has shown us the necessity of being able to deal with real-life challenges as they are presented.
Moving forward into 2021, VCs have a filled up mindset that innovative technology is not for superficial problems.
Resilience
On average, VCs tend to sign up with startups showing high growth potential. After all, the basis for committing funds is to get a return on investment.
This is no doubt is a strong indication of quality most likely to get considered in 2021, VCs will also look at startups that passed through the COVID-19 ridden year unscathed.
2020 has demonstrated that resilience is a pointer to reaping success in business, especially in tough times.
Local viability
Some VCs prefer that the companies they invest in move out of the African continent, with a belief that there is a high chance of them succeeding than in their locality.
There might be a basis for this action, however, for a country like Nigeria, a very good testing ground for emerging markets.
If a company can hold up a survival mode while showing adaptability, viability and scaling, then it is most likely it will succeed anywhere in the world
New VCs on the block might show great interest in startups that proven success in being locally viable.
In conclusion, startups would still have to pitch to VCs, however, a show of these qualities pushes them up the ladder among their competitors.
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