Oct 25, 2022

Crowdfunding in Africa: Africa’s Leading Crowdfunding Platforms (Part 2)

Crowdfunding in Africa: Africa’s Leading Crowdfunding Platforms (Part 2)

During our eighth Tadamon Talks, our webinar series following the trends in alternative finance, we brought together several crowdfunding experts who shared their experiences from leading some of the most impactful crowdfunding platforms and organizations in Africa.

This is the second part of our blogpost about Crowdfunding in Africa. This section will briefly introduce Africa’s leading platforms, Backabuddy, Thundafund, and M-Changa. Additionally, we will share some tips and tricks for successful crowdfunding campaigns given to us by the CEOs and founders of these platforms - Patrick Schofield, Matt Robert-Davies, and Kyai Mullei. Read the first part of this blog series here.

Meet Africa’s leading crowdfunding platforms

M-Changa: Founded in 2012, M-Changa was designed with the family at its heart. CEO of M-Changa, Kyai Mullei, sought to facilitate existing familial crowdfunding endeavors (such as crowdfunding for weddings, educational needs, funerals, etc.) by, as Mullei puts it, “digitizing the spirit of Harambe”, or coming together to contribute to a cause. 

Today, M-Changa is Africa’s largest platform with over 1.3 million individuals donating to close to 60,000 campaigns. Most of M-Changa’s donations are made via mobile money (M-Pesa), followed by credit card payments. M-Changa was established in Kenya, Uganda, and Ghana, and is now piloting in Senegal, Burkina Faso, and Niger.

Thundafund: Matt Robert-Davies is the CEO of Thundafund. Thundafund is a leading rewards-based crowdfunding platform in Africa. Rewards-based crowdfunding means that in exchange for a donation, a person raising funds would offer either a product, service, or an experience to their donors. Thundafund operates mainly in South Africa but has recently expanded to Gambia.

Backabuddy: CEO of Backabuddy Patrick Schofield took over the platform from its late founder, Allan John Elrick Beuthin, around 2015. Backabuddy has raised more money through crowdfunding than any other African platform, totaling around 24 million US dollars.

Backabuddy, like M-Changa and Thundafund, have largely set the scene for crowdfunding in Africa. Nonetheless, crowdfunding is only just taking off on the continent. Like Elizabeth Howard, CEO of the African Crowdfunding Association, Schofield believes that this has to do with trust, and historically the lack of trust between regulators and entrepreneurs: “the platforms we have looked to answer that challenge [by] providing a level of trust through validation and vetting, and on the other side, an unusual or non-traditional form of crowd validation,” says Schofield.

Tips and tricks for successful crowdfunding campaigns

1) Fostering engagement:

Prioritize the active engagement of a community over the total amount of funds raised.

“Let's say you want to fund a hospital or community project. Even if someone from that community can support the equivalent of a dollar, it shows that they care about that project and they're going to look after it. If a project comes in as a pure donation, it's less likely that the community's going to look after it and take responsibility for it, compared to if the community's been involved even in a relatively small financial way,” says Robert-Davies.

2) Start with existing communities and existing projects:

For similar reasons, successful crowdfunding campaigns are often ones that have been built off of existing communities with existing projects, infrastructure, and participation and which have sought to use crowdfunding platforms as enablers in the digital world.

3) Leveraging Africa-based crowdfunding platforms:

Why is it so important to have Africa-based crowdfunding platforms? Well for a start, “the level of impact [a campaign has] is directly driven by the ease at which people can actually support or invest in businesses, organizations, or charities,” says Schofield. African countries largely use different payment collections than European ones. Africa-based platforms are able to facilitate these payment methods making crowdfunding more accessible to Africans. 

Moreover, these platforms actualize the gathering of impact evidence for individual campaigns which allows organizations to assess and demonstrate the impact their campaign has had. This creates transparency and shows that an organization is committed to sustainable and long-term success.

Indeed, “people who fund projects don't just want to feel good about themselves and move on. They want to be part of its future success,” says Robert-Davies.

4) Using matching funds:

For businesses with good credit records that have been through hardship, using matching funds can be a great way to build momentum around a crowdfunding campaign.

“In previous research, we've seen four or five times the level of the match being raised. We've used matching funds to build momentum at the beginning of a campaign. [This approach] helps to bring attention to the causes that really need the support,” explains Robert-Davies.

Organizations that use this tactic must first prove themselves by securing funding from other sources. This is a sustainable approach to alternative finance because it demonstrates a reciprocal commitment from all parties (individual donors and corporate donors) in support of a cause. The “bridging” effect between these parties tends to transcend future crowdfunding initiatives.

5) Telling your story:

“Crowdfunding is just as much about raising awareness as it is about raising funds”, states Robert-Davies, and rightly so. Storytelling is a huge part of what makes campaigns attractive to potential supporters – it helps to evoke emotion and empathy towards one’s cause.

If you are interested in learning more about storytelling, check out our article on tips and tricks for how you and your organization can use storytelling to build powerful crowdfunding campaigns!

6) Securing a lead donor: 

Finally, a relatively simple way to inspire your supporters to donate to your cause is by having a lead donor, who is willing to step into the limelight. This approach helps your campaign and your initiative look trustworthy, especially when your lead donor is an esteemed and well-known individual or organization.