Nigerian-American Students Connect African Companies With Foreign Investors
Eighty-five percent of small businesses in emerging markets are stunted by lack of capital. Looking to stimulate economic growth in Africa, three Nigerian-American undergraduates founded a start-up to make investing in small companies easier.
The co-founders of Releaf, Uzoma Ayogu, Ikenna Nzewi and Isaiah Udotong, developed an online platform that uses big data to identify small businesses viable for investment. Their mission is to harness the economic power of Nigeria and the African continent, said Ayogu, the chief technology officer.
“If we don’t capitalize [on the Nigerian economy], there is either going to be a humanitarian disaster or it’s going to be the next frontier market,” said Ayogu, a Duke University senior who graduates in May.
In 2015, President of the African Development Bank Akinwumi Adesina took an interest in the prospective start-up — contributing a seed grant of $10,000. Two years later, Adesinh continues to act as a mentor to the young entrepreneurs, who work remotely from Duke University, Yale University and The Massachusetts Institute of Technology.
From the initial grant, Releaf has developed quickly from ideation to deployment, Ayogu said. The finished platform uses a multi-factor algorithm to produce ratings for small and medium enterprises — or SMEs. Investors looking to commit capital can browse these ratings, which are broken into nine quantitative and qualitative variables.
“In Nigeria, there’s a skills gap, but also a capital gap,” Ayogu said. “These companies are really capital deficient. We asked ourselves, why aren’t people investing? We realized it wasn’t a lack of capital — but lack of access to information. People who want to send capital to Nigeria don’t have the information to do so.”
Releaf’s primary clients are impact-investment funds, family-owned companies in Europe, successful African expatriates, and those looking to deploy capital to the African continent, Ayogu said. “Our role is to translate investment across cultural barriers.”
From media coverage to pitch competitions, Releaf has garnered attention from universities, angel investors and social entrepreneurs. The Nigerian-American undergraduates have won a cumulative $20,000 from competitions at MIT, Princeton and Duke’s Fuqua School of Business. Releaf raised an additional $6,600 through an Indiegogo campaign this past March.
Ayogu said a few potential investors have made offers that exceeded his expectations.
“There are some angel investors that have offered to give $200,000,” Ayogu said. “But we want to be careful of who we take money from — who we get in bed with. One woman has come up to me and said, ‘blank check, how much money do you need?’”
Deferring job offers from Microsoft and Bain & Company, Ayogu and his co-founder, Nzewi, plan to return to Nigeria after graduation to continue their work for Releaf.
Nzewi, the company’s chief operating officer, has identified his primary goals for their homecoming.
“We hope to raise $250,000, onboard 5,000 agri-businesses onto the platform, and facilitating five investment commitments,” Nzewi said. “That number may change after our accelerator.”
Ayogu said he is excited to pursue his passion project after graduation.
“I want to have no regrets,” Ayogu said. “I want to completely buy into what I love. I want to explain that because of the economic climate, there is no better time to go back to Nigeria. I’ve never been more sure of anything in my life. I have a true sense of purpose.”