Rethinking What it Means to Start a Business: Why Systemic Venture Building Matters for Africa’s Food Future

Here’s a reality that’s becoming progressively clear successful African business: The continent’s entrepreneurs are often seen arsenic risky investments not owed to immoderate limitations of their ain businesses, but because of nan risks successful nan systems astir them. As a result, if we want much African ventures to thrive, we shouldn’t only attraction connected de-risking individual businesses. We should put greater effort into strengthening and de-risking nan systems that support them.

At Enviu, we attack this situation from a systems perspective. Lasting alteration results from addressing gaps crossed full proviso chains alternatively than solving isolated issues. We truthful build ventures that target cardinal gaps crossed nan chain. Using a systems-first approach, these ventures tackle challenges ranging from fragmented worth chains and constricted infrastructure to analyzable marketplace dynamics.

However, addressing systemic barriers often demands important coordination, resources and patience. To return 1 nationalist example, Twiga Foods’ travel successful Kenya shows really moreover well-funded, visionary efforts tin brushwood structural limits wrong existing marketplace systems. Long seen arsenic 1 of Africa’s astir promising startups, Twiga has raised much than US $180 cardinal to digitize and streamline nan travel of caller nutrient from smallholder farmers to metropolis retailers. Their original imagination was ambitious: managing farming, warehousing, logistics and distribution successful 1 integrated system. But arsenic nan institution expanded, this capital-heavy attack proved difficult to sustain.

According to erstwhile labor and different insiders, nan task was spending excessively to negociate each portion of nan chain, and it has required repeated restructuring, layoffs and strategical pivots to enactment afloat. Today, Twiga has moved toward a leaner, asset-light model, but its travel illustrates a cardinal point: Even well-funded, innovative ventures struggle erstwhile nan broader ecosystem does not supply nan support, infrastructure and operational elasticity needed to thrive.

Ventures for illustration Twiga are precisely what Africa needs to fortify its nutrient systems: ambitious, locally driven businesses tackling profoundly fragmented worth chains. But erstwhile nan surrounding systems are weak, these ventures are forced to return connected excessively overmuch themselves: building infrastructure, logistics and marketplace entree each astatine once. This makes them acutely susceptible to superior shocks.

This article examines nan systemic challenges African ventures face, and presents a venture-building attack that originates pinch real-world problems and tackles them crossed nan system, helping entrepreneurs trim early-stage consequence and standard sustainable impact.

It’s nan System That’s Risky, Not nan Entrepreneur

While high-profile startups for illustration Twiga are impacted by these systemic challenges, let’s zoom retired and look astatine moreover smaller players: nan emerging businesses trying to participate proviso chains aliases service section markets pinch acold less resources. Most entrepreneurs deficiency entree to nan superior needed to scope impervious of conception aliases early scale, partially because investors comprehend early-stage African ventures arsenic “too risky.” Factors specified arsenic rate volatility, governmental uncertainty, regulatory unpredictability and constricted collateral amplify this perception. In addition, galore SMEs deficiency system financial records, often owed to constricted capacity, informal practices aliases assets constraints, which further reinforces nan bias that they are “uninvestable.”

AgTech task backing successful Africa peaked astatine astir US $500 cardinal successful 2022 but fell to conscionable US $200 cardinal successful 2024, according to Briter Intelligence. This waning momentum heightens perceived consequence among investors: Less backing past flows into some ventures and nan ecosystem that should prolong them, further weakening nan system. And so, nan rhythm of fragility continues.

At nan aforesaid time, improvement assistance is tightening, pinch awesome donors specified arsenic USAID, BMZ successful Germany, Sida successful Sweden and nan FCDO successful nan United Kingdom reducing budgets. This limits entree to concessional superior conscionable arsenic backstage investors are becoming much cautious. The consequence is simply a widening systemic backing gap, known arsenic nan “missing middle” aliases “valley of death,” which arises erstwhile early-stage ventures are excessively developed for mini grants but not yet fresh to pull larger investments, leaving them struggling to modulation from committedness to scale.

Fixing What’s Broken: A Systemic Approach to Building Ventures

But this rhythm of fragility isn’t inevitable. Across Africa, a caller procreation of builders is rethinking what it intends to commencement a business, focusing not conscionable connected azygous solutions, but connected fixing nan surgery systems down them. At Enviu, this reasoning has taken style done a systemic venture-building attack that we person refined for complete 20 years — 1 that is designed to de-risk early-stage invention and build ventures that last.

Enviu has applied this attack to place urgent systemic issues that are some analyzable and entrenched, specified arsenic post-harvest nutrient loss, eliminating textile and integrative waste, unsustainable shipping and recycling, and financial exclusion. These are problems that markets unsocial cannot lick because they span full worth chains, impact powerfulness imbalances and require coordination among aggregate actors to execute meaningful change.

Additionally, smaller and emerging ventures often look fragmented worth chains, constricted infrastructure and anemic marketplace linkages. No azygous task should beryllium expected to enarthrosis these systemic gaps alone.

Addressing systemic challenges requires a different attack to task creation. Instead of starting pinch a product, nan attraction originates pinch nan rumor itself. To alteration nan heavy study of an issue, our venture-building teams activity intimately pinch frontline actors, specified arsenic farmers and discarded workers, arsenic good arsenic different worth concatenation stakeholders, including input providers, section authorities and method experts. Through extended fieldwork, interviews and information analysis, we representation full worth chains to understand lived realities, structural barriers, bottlenecks and opportunities for change.

We past tally system ideation and validation sprints to create aggregate task concepts. These ventures are iterated and tested successful parallel, each designed to reside a circumstantial spread successful infrastructure, husbandman support aliases marketplace access. Once validated, ventures are built, funded and scaled, moving together to fortify nan wide worth chain. The process allows for iterative pivoting to find nan optimal approach, integrating innovation, building infrastructure, forming captious partnerships and processing highly scalable models.

A halfway constituent of this attack is utilizing thin methodologies to trim capital-heavy operations and promote collaboration crossed ventures and partners, making each inaugural much resource-efficient and resilient. This includes progressive engagement pinch husbandman organizations, cooperatives and discarded worker associations, and ongoing conversations pinch section governments astatine nan region level to understand really ventures tin champion support existing systems. Beyond building our ain ventures, our workplace actively supports broader strategy invention and ecosystem building, enabling solutions to beryllium adopted and scaled by others, including corporates and governments, and collaborating to thief style enabling regulatory environments.

A clear illustration of our thin attack successful believe is SokoFresh, an Enviu task tackling post-harvest nutrient nonaccomplishment successful Kenya. Our first mapping of nan situation revealed a fragmented worth chain, constricted infrastructure and anemic marketplace access. Based connected this, we first developed a exemplary that deployed mobile, solar-powered acold rooms astatine workplace clusters, allowing farmers to shop nutrient for a humble pay-as-you-store interest (around KES 1–2 per kilogram per day) while they searched for buyers. However, done early testing, we recovered that galore farmers preferred contiguous costs and did not want to return connected nan time, consequence aliases speech progressive successful trading their nutrient themselves. In response, SokoFresh evolved nan exemplary to see aggregation and marketplace linkage: pooling nutrient crossed farmers, connecting straight to buyers and paying farmers connected nan spot. This integrated attack combines storage, aggregation and guaranteed marketplace access, reducing post-harvest losses while relieving farmers of nan financial and logistical load of trading connected their own.

As nan exemplary evolved, we continuously tested, refined and experimented pinch pricing, customer segments and logistics to find nan astir effective solutions. The task expanded to a business-to-business leasing exemplary for exporters and agro-processors, customizing units for circumstantial proviso chains. Logistics were adapted to nan rhythms of nan harvest, pinch acold room units made semi-mobile and moved betwixt regions to maximize usage year-round.

Within nan venture-building workplace model, halfway functions specified arsenic ineligible services and finance management are coordinated and housed astatine nan studio, past shared crossed ventures alongside strategical advisory and business services, reducing costs and operational risk. For investors, this building de-risks superior by shifting from a single-venture stake to a diversified portfolio that delivers some financial returns and systemic impact.

A cardinal attraction is centered connected proving grounds earlier scale. Every task must show commercialized viability and societal aliases biology effect connected a mini standard earlier further finance is made. Over time, this creates a replicable, systems-led attack that strengthens nan broader ecosystem and delivers measurable impact.

Proof successful nan Fields: Lessons from East Africa’s Agrifood Ventures

We tie different illustration from our agrifood activity successful East Africa, wherever crossed our agrifood portfolio each dollar invested has a return of 5.6 times its value. Supported by catalytic funding, we were capable to creation and trial caller models that addressed inefficiencies successful nan worth concatenation and helped smallholder farmers preserve, shop and marketplace their produce.

What began arsenic early-stage support evolved into scalable, revenue-generating ventures specified arsenic SokoFresh and Shambani Pro, which tackles farmgate discarded by turning unsold aliases second-grade nutrient into value-added products done agrarian micro-factories.

These ventures each reside nutrient nonaccomplishment astatine different points successful nan worth chain, while improving nutrient and income information for farmers. Collectively these 2 ventures person served complete 17,000 smallholder farmers, arsenic highlighted successful our 2024 Impact Report. This early-stage support de-risked innovation, attracted follow-on investors, and sparked a broader ecosystem of funders and partners committed to building a much inclusive and resilient agrifood system.

While this portion highlights our activity successful nutrient and agriculture, our venture-building attack spans aggregate sectors, from mobility to textiles to information packaging and zero-waste solutions. If you’d for illustration to partner pinch us, study much astir Enviu’s activity aliases commencement a conversation, you tin scope Enviu’s Chief Programs Officer, Dieuwertje, astatine dieuwertje@enviu.org

Dieuwertje Nelissen is Executive Director, Eveline Jansen is nan Agrifood Domain Director, and Rachael Kirui is simply a Strategic Communications Consultant astatine Enviu.

Photo credit: JackF